Best Crypto Trading Strategy for Traders in 2024

TLDR

Crypto trading is buying and selling crypto assets on blockchain networks, just like how you trade physical goods. It is an exchange system driven by crypto market volatility. 

The best way to manage risk to your outcomes is by planning, fundamental analysis, and strategizing based on market moves, technical indicators, historical facts, and market conditions.

These trading strategies can be long-term or short-term, depending on how active you can watch the next trend trading in the cryptocurrency market.

However, beginners are usually discouraged from short-term trading because of how fast things can change, a process reserved for advanced traders with years of experience in the volatile market. 

Crypto Trading 

Trading assets and earning profits in the cryptocurrency market is a process that requires planning and strategic moves with your exchange account. 

Whether a beginner or long-time investor, one of the best things you can do for yourself after deciding to make crypto investments is to devise a proper strategy.

One of the best things having a working strategy will do for you is to help you manage risks and minimize your losses as much as possible in a highly volatile environment, as we have in the crypto world. 

General Crypto Trading Strategies

Have a Spending Limit

You can manage and minimize the losses of your crypto asset by limiting how much you will be spending on trades. The market is highly unpredictable and can suck in as many tokens as you put into it. 

Another way to ensure you don’t overspend your digital assets is to use the stop loss order feature. This feature helps conduct automated sales on cryptocurrencies when they reach a particular price on the market. 

The loss order feature helps manage how much you gain or lose on trades and brings a bit of predictability into the volatile market.

Diversify Your Trades

It is highly recommended to diversify your portfolio. Based on the market values, buy as many cryptocurrency coins as you can afford. 

Portfolio diversification helps traders avoid catastrophic losses if a particular blockchain or market crumbles. This kind of market downtime is not rare in the crypto world, and the best way to manage this is to invest in different tokens.

Long-Term Investment

The crypto market is not going anywhere anytime soon. So, do not be afraid of having and holding your crypto assets for months until the market value has accumulated enough to reward you with significant profit. 

Long-term crypto investment has several benefits for investors because the market constantly evolves. The only risk involved is the risk of a market crash. However, the good thing about long-term holding is that the market can also recover while being held. 

Crypto Trading Strategies

Trading strategies are great for managing your crypto transactions to avoid making impulsive decisions that can make you lose all your tokens through a wrong move or cyberattacks. 

Cryptocurrency trading strategies help you plan and devise specific steps concerning one or more tokens to ensure maximum profit.

This plan can involve factors like when to buy, sell, or hold and how much will be risked on each token trade. 

Anyone can devise different analytical tactics when devising a strategy based on the current market price, condition, and the potential future of the token selected for sale.

Some of these cryptocurrency trading strategies are beginner-friendly, while others are solely reserved for trade experts with years of experience in the crypto market.

Here are some of the best strategies for successful trading.

There are five major Crypto trading strategies;

• Crypto Day Trading
• Crypto Range Trading
• Smart Trading
• Automated Trading
• HODL

1. Crypto Day Trading

The Crypto Day trading strategy, or “Intraday Trading,” is popular because it typically begins and ends the same day.

Traders in this category ensure they start and finish all their transactions within the same day and wake up the next day to begin a new one on the same or other crypto exchange platforms. 

The day trading strategy tends to be more profitable for the traders because they take advantage of the intraday price movements within the day. 

The crypto market is highly volatile and can make significant changes that, when accumulated after some while, might not be as substantial as when each change happens independently.

However, day trading isn’t guesswork. It takes a lot of attention, chart reading, stock screening, the movement of other assets, and some technical analysis skills to determine the market’s best entry and exit points. 

Day trading is unsuitable for people who can’t keep their eye on the screen for most of the day because they have to take advantage of tiny market movements. This is why it is considered a risky strategy mainly done by advanced traders, not beginners. 

Day trading requires a lot of skill, effort, and attention and is still very risky because crypto prices fluctuate quickly. Here are the strategies that can help you conduct profitable day trades:

2. Scalping Crypto Trading Strategy

The scalping day trading strategy is when traders seek to take advantage of changes in a market within minutes. Scalping traders enter the market and exit it as soon as there is an increase in value before it can normalize again. 

The immediate profit for this kind of strategy can look small, but it can be a lot when accumulated over the day. 

One of the requirements of scalp day trading is a fat digital wallet because a small token exchange might not be significant enough. For example, a 0.05% gain on $10,000 is $5.0, while the same gain percentage on $100,000 is $500. 

Imagine that crypto traders make these kinds of instant marketing profits 10-20 times within the day. That is a lot of profit when added up. The day trading periods for scalpers can be one, fifteen, or thirty-minute windows, but always less than an hour. 

3. Arbitrage Crypto Trading Strategy:

The Arbitrage crypto day trading strategy is one of the most common because the possibilities and channels for participating in the trade are endless. 

This day trading strategy involves buying a token on one platform or market and selling it on another with a significant price difference.

The profit margin for this type of trade is similar to scalping because it is mostly a small percentage of profit, but the high trading volume births higher profits. 

The difference in prices on each trading platform is called “spread,” To make as much profit from the spread as possible, arbitrage traders usually have an account on platforms with significant digital asset prices. 

For example, Bitcoin was worth 40% more in Korea than in the US at some point in the market. Arbitrage traders were buying BTC on the US market and quickly sold for a 40% profit on the Korean market. 

Although these kinds of spreads are rare occurrences on the market, traders with this strategy make good profits from moving through different platforms. Crypto allows anyone to create exchanges, making the possibility for profitable spreads and liquidity endless. 

4. Range Crypto Trading Strategy

It is usual for a coin to trade at a specific range for some time. For example, Bitcoin has once traded between the ranges of $8,601.40-$10,210 for 30 days. 

While this seems to be a stable enough market price, it is essential to note that the BTC coin can gain about 40% growth in one day.

The crypto market space is small enough that one big mover, also called Whales, can influence the market in a structured way, resulting in either a surge in the market or a decline in the crypto asset’s price and value.

As a trader, it is best to pay attention to these crypto price movements and take advantage of them for position trading. This is what range trading strategy involves.

This is why traders using the range strategy must pay attention to overbought and oversold zones. It means something significant and worthy of attention is happening there. 

An overbought zone means that the traders have had their time with a token and are ready to put it on the market for sale. An oversold zone implies the opposite of that.

One of the best ways to get familiar with this valuable information is to get acquainted with reading charts because they can show those zones properly. 

Stochastic oscillators and the Relative Strength Index (RSI) are some of the most common indicator tools used for determining the different zones in the crypto market.

5. Swing Crypto Trading Strategy

Swing trading is ideally between long and short-term trading. Some consider it a medium-term trading strategy because it occurs between a few weeks and a month. 

This approach demands a thorough market study. It allows traders ample time to decide on investing based on the information gathered.

Some argue swing trading still demands swift, sometimes impulsive, decisions. This depends on their token’s market movements.

Automated bots can enhance this strategy. They perform transactions once specific conditions are met without needing further permission.

6. HODL Crypto Trading Strategy

This is a long-term trading strategy where traders hold a particular token for a long time. This is done to accumulate profit instead of selling short-term.

The HODL strategy doesn’t require much other than traders buying and storing these tokens. This is done without stopping loss or taking profit orders.

One of the best things about this trading strategy is that accumulated profits tend to be huge over time. However, the risks are just as present as the opportunities.

Therefore, traders, especially beginners, should only Hold as much as they are willing to lose because the possibility is imminent. 

The primary process for this strategy is that traders buy the tokens at a low market price and then resell them when there is a surge in value.

One of the requirements for making the best out of this trading strategy is an immense trust in one’s instincts and judgments. The critical part is deciding when to enter or exit a market. 

The advantage of this cryptocurrency trading strategy is that you escape the short-term falling and rising of tokens that can be catastrophic.

It affords you the privilege of longevity; eventually, the market will settle and balance itself out. 

This can be equally risky: the market can experience a prolonged, constant decline. This can cause a wave of ecosystem-wide liquidation, leading to a devastating loss.

The possibilities in this strategy are on the extreme ends of the divide. 

7. Automated Crypto Trading Strategy

This trading style is probably the most straightforward strategy to employ as a trader in the cryptocurrency markets.

Automated trading bots shoulder responsibilities: observing, studying, and deciding when to enter or exit markets.

In the cryptocurrency ecosystem, numerous automated tools focus on understanding different tokens’ market positions. They predict outcomes using math and computer science systems.

These tools can be programmed to sell or buy a specific token when certain criteria are met, optimizing the trader’s profit.

Pros Of Trading Cryptocurrencies:

1. Volatile Market: The crypto market is rid of drastic changes bound to occur anytime. These drastic changes can mean a sudden spike in the trader’s profit, especially in short-term or intraday cryptocurrency trading. 
2. Secured Privacy: Cryptocurrency day trading has a unique advantage: no personal information is needed for successful transactions. Each exchange applies distinct Know Your Customer (KYC) protocols. These protocols enable trading platforms to reduce cyberattack risks while safeguarding trader information.
3. Rewards: Aside from profits made on day-trading cryptocurrency, some tokens reward their holders with governance tokens. These governance tokens give the traders the right to have input in the platform’s decision-making from now on. 
4. Continuous Market: The crypto market never closes. It runs 24/7, 7 days a week, and is accessible from anywhere worldwide, as long as you can access the internet. 
5. P2P Transactions: Arguably the most favorite feature of crypto trading, people can conduct transactions without the input of third-party institutions. This makes transactions faster and cheaper than having to pay extra third-party fees. 

Cons Of Crypto Trading

1. Cyberattacks: The market is still vulnerable because it’s entirely done on the internet. The potential for people’s assets to be hacked or stolen through cyber theft is always there. The best way to minimize this risk is to take as many security precautions as possible.
2. Unpredictability: The unpredictability yielding sudden high profits can also lead to devastating losses. Market crashes can still occur despite taking many precautions, leaving traders and investors at a loss.
3. Legal Structures: There are no legal structures in the cryptocurrency ecosystem. The decentralized nature of the market leaves very little control over the traders and room for all manner of occurrences that can have varied effects on traders. They will have to deal with them without anyone to hold them accountable. 

Conclusion

The Cryptocurrency market is a highly rewarding one, especially for short-term traders. You can have a smooth ride, earning profit and maximizing the rewards acquired with the appropriate trading strategy.

Successful trading needs knowledge of fundamental and technical analysis. It helps interpret charts and predict market price movements.

Once you decide to trade cryptocurrencies, remember that diversification can boost your profit. Allocate different tokens to various strategies to find the best one.

For beginners, the best crypto trading strategy is diversification. Always stake only what you can afford to lose in crypto markets.