Cryptocurrency Trading is the Forex (foreign exchange) of cryptocurrencies. It's a digital asset that can be traded just like regular currency. However, cryptocurrency has no physical form and never actually touches.
If you're interested in trading cryptocurrencies such as Bitcoin or Ethereum, this guide will give you all the information you need to get started.
If you are new to cryptocurrency trading, or any type of trading for that matter, this guide is perfect for you. You'll learn how to trade cryptocurrencies and securely, with step-by-step instructions on everything from setting up your Bitcoin wallet to executing your very first trade.
Let's get started.
Here are the best trading strategies to try out on Bitcoin Up:
Strategy 1: Scalping and Day Trading
Scalping and day trading are some of the most exciting forms of trading possible. Instead of buying and holding your crypto for weeks or months at a time, you can trade it in a matter of seconds. This is where technical analysis comes into play.
Technical analysis is all about analyzing past price movements to find patterns that you can exploit. If a coin's price goes down a lot, but then skyrockets after it does so, this is called a "bull trap" and you'll want to avoid it at all costs. This phenomenon will happen often in the crypto world since prices are volatile and change constantly. Using candlestick charts is really important when you're day trading (more on candlestick charts below).
If you study the history of the crypto industry, you'll see this type of price movement happen all the time. This strategy works because it's based on high-probability price movements that traders have found over the years.
Strategy 2: Short Selling
Short selling is a simple but effective strategy, and it works best on highly volatile assets such as Bitcoin due to its high liquidity and market capitalization.
Short selling involves borrowing an asset and selling it at its current price. Then, you wait for the price to drop before buying it back at a lower price. This allows you to make a profit off the difference in prices.
This is also called "going long" because you are betting that the value of an asset will increase over time. The key is correctly identifying which assets are likely to appreciate in value over time, and then holding onto them for extended periods.
Strategy 3: Arbitrage
Arbitrage is a term often used in finance, and it's similar to short selling in terms of profitability. It simply means buying an asset (crypto) at one price point, then immediately selling that same cryptocurrency at another price point for profit. This can be done almost instantly, and the profit margins are typically very high.
Arbitrage opportunities happen all the time in the crypto world due to the fact that prices are constantly changing. This means you can profit in real-time with relatively low risk.
Strategy 4: Swing Trading
Swing trading is similar to day trading in that it involves profiting from short-term price fluctuations in crypto. However, swing trading tends to focus more on the daily ups and downs of a particular coin rather than on an hourly or minute-by-minute basis.
This is done using candlestick charts, which are easy enough for beginners to understand quickly. It also involves some risk because you'll need to hold onto your cryptocurrency long enough for its price to increase enough to cover the spread.
Conclusion
There are many different ways to profit from the crypto world, but few are as fun and rewarding as day trading. It involves high-risk, high-reward scenarios which means you can make a sizable profit in just a few minutes if everything goes according to plan.
All you really need to do before diving into day trading is learn how to read candlestick charts, which are easy enough to understand.
* This is a contributed article and this content does not necessarily represent the views of sciencetimes.com
