Well-known trading strategies for crypto spot trading

Dear Global Bitgetters,

Day trading

Day trading in cryptocurrency involves taking positions in the market and closing them out the same day during trading hours. Due to the fact that deals are frequently initiated and completed in a single day, it is also referred to as intraday trading. The sole purpose of day trading cryptocurrencies is to gain from fast changes in the market. Due to the volatility of cryptocurrencies, day trading in the market could be quite profitable. Day traders rely on scalping strategies to accumulate multiple little wins which in turn grow their portfolio.

HODL (buy-and-hold)

The investment strategy known as "HODLing," which is a misspelling of "hold," requires investors to purchase cryptocurrencies and hold them for an extended period of time. This makes it possible for investors to gain from a growth in the asset's value. When investing for a long time, HODL enables investors to profit from long-term value growth. Investors can benefit from the HODL strategy by avoiding short-term volatility and the risk of selling low and purchasing high during panic periods.

Range trading

Market participants often look to seasoned professionals for support and resistance levels on a daily basis. Since "resistance" refers to the upper limit where the price may rise, a resistance level is a price that is higher than the curren t price. A "Support" level is always lower than the current price since it represents a point below which a cryptocurrency price is not anticipated to fall.

Scalping

Increased trading volume is used in this trading approach to boost profits. Despite the risk, a savvy trader adheres to the margin requirement and other crucial guidelines to prevent unfavorable trading outcomes. Scalpers consider the bitcoin asset, historical trends, and volume before deciding on an entrance and exit point within a day.

High-Frequency Trading (HFT)

HFT is a form of the algorithmic trading strategy used by quant traders. This involves developing trading algorithms and bots that enable quick entry into and exit from a bitcoin asset. Such bots need a strong basis in mathematics and computer science, as well as the creation of complex market concepts. Therefore, seasoned traders would gain more from it than beginning traders.

Arbitrage trading

To profit from their cryptocurrency or Bitcoin trading tactics, traders rely on arbitrage possibilities. In the trading strategy known as arbitrage, a trader buys cryptocurrency in one market and sells it in another. Between the buy and sell prices, there is a spread.

Due to the disparity in liquidity and trading volume, traders could be able to turn a profit. To take advantage of this chance, they open accounts on exchanges where there is a big price differential for the cryptocurrency they are trading.

Dollar-Cost Averaging

Finding the best entry and exit positions in a crypto market requires understanding that timing the market is almost impossible. A wise cryptocurrency investment approach is dollar cost averaging (DCA). DCA refers to investments with fixed, recurrent payments. Investors can build long-term wealth and avoid the time-consuming job of market timing by employing this strategy.

Exit strategy, however, can be difficult using the DCA plan. Determining when to depart could also be helped by reading technical charts. Investors in cryptocurrencies should monitor oversold and overbought levels before making a choice.

Bitget Team