For those trying to get their feet wet in the crypto world, the challenges may be many. At the same time, beginners do not want to give up simply because the thought of investing in crypto coins appears intimidating. There are some easy-to-follow strategies that first-time Bitcoin traders can use to make successful trades.
Another useful strategy for beginners is taking the help of crypto trading bots. These are automated software programs that can conduct trades on your behalf. Understanding and implementing trading strategies is never easy for novices when they start out.
Bots can also teach them about the ways in which the market works so that they become better traders. They will learn how to understand factors like market sentiment, price swings, trading volumes, basic indicators, chart patterns, etc. Read through the bitcoin pro review to learn about automated trading.
Strategies for Bitcoin trading beginners:
- Long-term holding or HODL: This is perhaps the easiest trading strategy for newcomers because it demands limited technical expertise. It means buying crypto coins that are likely to have a promising future and holding onto these for the long-term. You need not check the prices constantly; rather, you should check only after a long period of time whereupon you can sell the asset if you are satisfied with the prices.
- Day Trading: This is the opposite of HODLing because you sell and buy assets within 24 hours. You may make multiple trades in the course of a single day to take advantage of minor price changes. Day trading is good for beginners because crypto coins are inherently volatile, and when performed correctly, this strategy can bring in good profits. However, you must invest what you can afford to let go off and implement stop-loss orders.
- Scalping: This is a fast-paced trading strategy and can assure impressive returns. It is even quicker than day trading but it is also far riskier. Traders get to enjoy profits on the micro-fluctuations that a coin experiences within a short time period. Scalping can be done on all crypto coins as they are all highly volatile; exceptions are stable coins like True USD and Tether. It is advisable to scalp on the larger cryptocurrency exchanges and popular trade platforms. The downside is that traders can incur big losses through a single bad trade.
- Swing Trading: This is done over a slightly longer time-period than day trading, usually a week or a couple of weeks at the most. It focuses on capturing big gains over longer time periods and this is why it is suited for beginners. As a beginner, you will focus on weekly and daily price charts and use both technical and fundamental analysis to find out whether a coin will undergo a major price change. Both positive and negative press reports can influence the coin’s momentum. So, you must be updated with all the latest developments around you.
- Relative Strength Index or RSI Strategy: This is a popular beginner’s strategy and very effective under the right conditions. RSI indicates momentum and calculates the change and speed of price movements; this helps to identify the oversold or overbought markets. When RSI falls below 30, it indicates the coin has been oversold and prices will recover soon.
- Shun Pump and Dump Groups: Such groups will offer their viewers substantial profits based upon misleading or false statements. Pump groups seek to organize multiple buy orders on a specific asset to increase its price. Then the asset is dumped on casual investors keen to invest.
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This post was last modified on February 3, 2021 6:20 PM