Bitcoin trading can be a risky way of making money at first, but over time Bitcoin traders typically pull that knowledge and experience and then begin to branch out into new trading strategies that are more advanced and that have the potential to increase the positive outcomes that are achieved whilst also optimally reducing risk in the process.
Inevitably by selecting better Bitcoin trading strategies, traders open up the potential for themselves to be able to achieve better results in the market, and that can often be a significant difference in the kinds of levels of success that can be attainable with some of the better strategies compared to some of the more basic and commonly used strategies.
This guide takes a look at the best Bitcoin trading strategies to get better results in 2021, starting with a look at how new strategies have been emerging as the market evolves, then moving on to look at what are some of the older and more basic Bitcoin trading strategies, and then finishing off with a look at some of the best Bitcoin trading strategies to get better results in the market.
Newer Strategies Emerge as the Market Evolves
Crypto markets have certainly evolved over time but so have the trading strategies used by those hoping to carve themselves out a piece of the profits created by this decentralized and fast-paced market and from copy-trading to margin/shorting there are many trade types available to cryptocurrency traders.
New strategies emerging as the market evolved is common in markets of all asset types as even stock markets have seen their share of new investment styles and techniques emerge over time as people and investors try to find new-and-improved strategies and methods to leverage markets for profitability.
One of the newer crypto-trading strategies being used by more investors now than ever before is the technique known as ‘copy-trading’ which is the process of following the guidance and trades made by a more experienced trader with the hopes of duplicating their success, this is popular among new traders.
Conventional trading strategies are now mainstream in crypto given that the market has matured and now that cryptos are viewed by most as viable assets, some of the many investment strategies involve margin trading and shorting (when you believe values will fall) as well as AI-driven trading techniques.
What are Some Older Basic Bitcoin Trading Strategies?
Bitcoin Swing Trading
Bitcoin valuations are historically parabolic with price trends that for some time were all but certain though in recent years steadily and incrementally rose as more people and institutions entered the space and as trading strategies evolved and one of the first techniques to be used was known as ‘swing trading’.
Swing trading is an investment style pursued by traders and not investors as traders aim for short-term profits while investors are long-sighted gainers, swing trading is the art of profiting from small but consistent and marginal swings in price which most reap by opening and closing positions the same day.
Studying and assessing price trends as well as the highs and lows and circulating price of a coin are the metrics analyzed most when swing trading an asset as the goal is to profit from the average low and top price a coin reaches during a given timeframe which for most using this strategy is twenty-four hours.
Bitcoin swing trading was one of the first strategies used by crypto traders as its short-term volatility allowed those using this method to earn quick profits from marginal spreads in price and to this day is still used by many traders that use it and profit from this strategy when fluctuations are consistent, in some cases, coins with little-to-no price changes can be profitable and is known as trading ‘flat trends’.
Bitcoin Scalping
Bitcoin scalping was and still is a popular trading strategy used by traders seeking short-term profits and is a technique that aims to profit from small movements in price, as with most strategies, crypto scalping requires a lot of discipline and market knowledge and often requires traders to make decisions quickly.
Profiting from small price movements or from coins with very little to virtually no movement in price is often referred to by insiders as ‘flat trend trading’ though this should not be confused for coins such as Bitcoin as its value and price over time has been all but ‘flat’ as it has grown year over year for a time.
Bitcoin scalping is best for experienced traders and those new to the crypto market as first-time traders may want to consider a longer-term strategy such as ‘buying and HODLing’ as these reduce short-term risks and the stress and impulsiveness caused by day-to-day volatility, which can lead to irrational sells.
Risk management is an important part of investing no matter the asset being traded so if pursuing this investment strategy or any other it is imperative that risk-management principles are adopted into the strategy, these may include position-sizing, stop-loss orders, and also dollar-cost-averaging techniques.
Bitcoin Day Trading
Day trading is the technique of buying and selling an asset within the same twenty-four-hour period and while conventional-market investors use strategy for profits those in crypto markets are too as the high volatility and short-term price movements can be incredibly profitable when strategically bought/sold.
Bitcoin day trading is pursued by traders wanting to leverage their liquidity in the market on a daily basis to buy low and sell high and in some cases the entry and exit points may be pennies apart as some day-trade coins with low values though Bitcoin is no small contender and is now a day-trader-dream coin.
Greater market volatility presents even better-earning opportunities for day-trading users to earn as the larger spreads in value are the more they can potentially earn per coin, this is especially true in regards to Bitcoin that not only has the largest market cap of any other but the biggest daily swings in value too.
Day trading is an investment method adopted from conventional trading markets to the strategies of crypto traders as leveraged strategically will produce quick and easy profits, so long as traders grasp the concept of the coin and understand its trend and average prices, it can be rather profitable to pursue.
Bitcoin Trading Strategies to Get Better Results in 2021
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Margin Trading Bitcoin
Margin trading started out the cryptocurrency market as a relatively niche and unpopular way of being able to trade, with that being a common misconception that margin trading was a risky way of trading cryptocurrencies and therefore many traders and investors avoided it completely for the earliest years of the market.
However with the launch of platform such as PrimeXBT which is a margin trading centric professional trading platform that launched in 2018, the understanding of the benefits of margin trading instead of just the risk that may be involved has led to a complete turnaround in the cryptocurrency space since then, with PrimeXBT being largely responsible for popularizing the interest in margin trading that we see today.
PrimeXBT launched as a platform that would bring professional margin trading tools to the cryptocurrency market that would typically only available in the traditional market that point in time, and as a result of this the platform grew rapidly and build up a user base of cryptocurrency traders that for the first time could access professional margin trading tools.
PrimeXBT provides industry-leading leverage of up to 100X on a wide range of crypto assets that include BTC, ETH, LTC, and EOS, as well as up to 500X on some of the world's leading traditional assets like stock indices such as S&P500 and FTSE100, forex pairs such as USD/EUR and AUD/CAD, and commodities such as gold and oil.
PrimeXBT is also renowned for being one of the most safe and secure cryptocurrency trading platforms on the market in 2021, implementing a range of bank-grade security measures such as mandatory Bitcoin address whitelisting and hardware security modules with rating of FIPS PUB 140-2 Level 3 or higher, and this leading to the platform protecting its uses darkroom funds with 100% success over the past few years.
Bot-Based Bitcoin Trading
Technology doubles in terms of computing power and performance every two-or-so years and there is no corner of the world or market that tech has not reached and cryptocurrency is a prime example of a market that has been heavily influenced and manipulated for profits by traders and investors at large.
Bot-based Bitcoin trading is also known as artificial intelligence (AI) trading and is the technique of using a software or bot to monitor markets and execute actions and bot-driven trading strategies can be quite lucrative as crypto markets never close which means those using bots can leverage markets at any time.
Bitcoin trading strategies in 2021 have greatly evolved compared to the techniques used by BTC traders years ago and with the modern-day advancements in AI technology is a better time than ever to utilize these developments to have eyes and ears in the market at all times that can place trades automatically.
Checking markets on a daily basis to watch and speculate price movements can be an adrenaline-filled experience though is not the most efficient way to trade, ridding the element of emotion is a powerful ability, and using bots that can be programmed to open/close positions based on pre-set values rather than impulsive-driven feelings is a useful way to limit losses and improve gains both short and long term.
Bitcoin Position Trading
Misconceptions have plagued the crypto space ever since the inception of Bitcoin itself and one of the most common is that the best time to trade Bitcoin has already passed, this is not only untrue if based on popular opinion but further from the truth than ever too given the trading opportunities of 2021.
Bitcoin position trading is a popular strategy as it can reap profits in rising and falling markets as the positions traders take on a coin can be a wager against its fall or rise in value and if right, in either case, will earn gains from the movement though this is usually best for seasoned traders with experience.
Seasoned traders are the best candidates for position trading as profits from this strategy are derived from the accurate forecasting of future values and given that knowing future movements before they occur is an ability we have yet to hone it requires careful speculation of trends and prices to profit.
Long and short are the two terms used to describe the two possible directions in price a crypto can move with long positions being made with the hopes that values rise while shorting a crypto is done when a trader believes the value has peaked and as such 'goes short' with the hopes of its value falling.
In Conclusion
While many newer traders still stick to strategies such as Bitcoin swing trading and Bitcoin scalping, many of those traders will build up enough experience and knowledge to move on to more advanced and better strategies such as margin trading Bitcoin at some point in the future.
These strategies that we have recommended often lead to a dramatic reduction in risk while also allowing for the increased possibility of generating high levels of revenue as well, with this being a win-win situation for traders that implement them successfully.
If you would like to learn more about the three strategies that we would recommend as being the best ways of trading Bitcoin in 2021, check out margin trading Bitcoin, bot-based Bitcoin trading, and Bitcoin position trading.