To say that cryptocurrencies might be profitable will be an understatement. Cryptocurrencies experience several folds of improvements every year, and presently they have outperformed every other asset class when it comes to ROI (Return On Investment).
Nevertheless, picking the right trading opportunities and strategies proves to be a difficult task especially when you are new to the trading field. Before you dive into the world of complicated indicators, and advanced technical analysis, it is important that you learn the basic strategies.
TOP 10 CRYPTOCURRENCIES
You don’t require much knowledge about cryptocurrency to execute this strategy. All you have to do is a little work. Under this strategy, you invest 50% of your capital in Bitcoin and the remaining 50% in the next nine biggest cryptocurrencies. Certain websites like coinmarketcap.com put together a list of the most important values which you can leverage to decide how you should spread the investment among the nine cryptocurrencies.
If you wish to keep it simple, try distributing the 50% equally among all the nine cryptocurrencies. You will have to keep an eye on your currencies and check which currencies have dropped out of the top 10 list every month or quarter.
Sell the cryptocurrencies that have dropped out of the top 10 list and spend the money of buying those cryptocurrencies that have replaced them. This method will help you always bet on the winners and spread the risk without having to pay a lot of attention.
DAY TRADING
Day trading simply means buying and selling cryptocurrencies within the same day and often multiple times in a day. This method takes advantage of the small price movements and yields great profits when performed in the right way.
However, the risks of losing a significant portion of your portfolio are also evident in case you try to day-trade a coin that is due to crash. Thus, when day trading always use amounts you can afford to use and set stop losses along the way.
As the market is quite dynamic, anyone who day trades two or three times per day can bag a fair profit. But, be careful about day trading more than, as it can consume more of your time than you wish to exist. Start with a small volume and work up the volume only when you feel comfortable.
SCALPING
Scalping is a strategy that allows you to quickly generate reasonable returns. Though scalping works quicker than day trading, it is also much riskier.
Scalping enables traders to capitalize on the micro-fluctuations that a coin sees over short periods like one, three, and five minutes. Thanks to its substantial volatility, scalping is found to be more effective when performed with cryptocurrency than traditional markets.
Presently, almost all cryptocurrencies with a significant trade volume except stablecoins (USDT) like Tether and True USD can be scalped.
We recommend that you scalp either on larger cryptocurrency exchanges or on popular trading platforms and to stick with coins in the top 30 viz Litecoin (LTC), Ethereum (ETH), and Bitcoin Cash (BCH).
As scalping is a riskier method, it is a must that you employ tight stop losses. Additionally, the faint of hearts should definitely not use this method as it requires a serious time commitment.
Which trading strategy do you find the most effective? Do you think we missed to mention anything in our list?
For more details visit: https://www.nioc.exchange/best-trading-strategies-for-novice-traders/