Having some basic knowledge around "How to Trade" in the Crypto markets is an added set of skills you can utilize to create an income for yourself.
With a little education, trial and error you will begin to learn the process of things and what traders tools are available to maximize your profits. There are so many easy to follow courses that have been created just do a quick search and you'll find something. In these articles we've outlined the "how to's" of things such as trading platforms, account registration, what are traders tools like multipliers, stop loss limits, margins, chart analysis, strategies, safety and research methods.
As you read on you'll gain an insight into Crypto trading that will see you set up trades on the market with confidence.
Then when you're ready to upskill you can move into the Sovereign Genesis Academy where you can advance your trading skills and cryptocurrency knowledge with our online courses.
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What Are The Best Cryptocurrency Trading Strategies 2021?
When looking for a worthy cryptocurrency to invest in 2021, you will need to do more than just research a basic phrase like ‘what is the best cryptocurrency to invest in.' Having a holistic view on an outcome to find the best cryptocurrency trading strategy for you will definitely benefit your decisions.
Trading for profits is a definte answer when it comes to investing in cryptocurrencies, the market has grown to a position where traders are offered the best ways to make profits, including margin trading, shorting and the use of traditional strategies and tools.
Every person who ever enters the market has a unique way of doing things, and when we understand that we must also know there is no such thing as a perfect trading strategy, different tactics work for different people. Each of us have our own ways of learning and retaining information so when it comes to choosing your style here are some key things you can consider when choosing your cryptocurrency strategy.
Which cryptocurrencies are you planning to invest in?
Do your chosen cryptocurrencies tend to fluctuate at particular times?
How much time can you spend monitoring the cryptocurrency markets?
What are your ultimate cryptocurrency trading goals?
Once you’ve got the answers to these questions, you’ll be in a more confident position to find the best cryptocurrency trading strategy for you. Of course you may need to experiment with a few different strategies to test them out but as the old saying goes "practice makes perfect."
A perfect place to test your skills is by using demo accounts on trading apps and websites, which give you an option to open an account with a trading platform and trade with fake money so you can trail the app features and test yourself without the risk of losing your hard earned cash. I highly advise to all new traders to check these options out as they can also help to fast track your learning if your someone who retains better when lessons are hands on.
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Whether you like to make quick-fire decisions or prefer to play a long game, let’s take a look at a few things you can use when looking at creating a plan for your cryptocurrency trading strategies
Long-Term Cryptocurrency investment strategies are ones where you expect the value of your chosen crypto asset to improve in the long run. As opposed to cashing in on sudden price fluctuations throughout the day, long-term strategies rely on careful planning and self-control.
A long-term investment is generally given a time-frame of between 1 year and 2 years. However, some traders choose to hold their investments for over a decade. You can choose whether you want to pledge your full investment at the start of this period, or invest varying amounts over a length of time.
If you’re wondering whether a long-term cryptocurrency investment strategy is for you, here are some of the factors which could help you to decide.
How do you expect your chosen crypto to perform over the next year?
What unexpected events could make you want to sell your asset?
How likely are these events to happen?
You could consider things like the introduction of new regulations, potential breakout competitors, and the scalability of its technology.
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Are you happy to hold an investment without watching the market all the time?
There are many benefits to choosing a long-term investment strategy, Often, they are best suited to investors who have day jobs or other demands on their time which mean they aren’t planning to monitor the market 24/7
Long-term investment strategies can also be effective if you’re investing in a crypto which you truly believe in.
As an example, let’s say you think the best cryptocurrency for 2021 will be Cardano ADA You carry out your due diligence and, in the process, discover that the company is filling a huge gap in the market, have some awesome plans for the future, and have recently invested in some new capabilities.
This means you have good reason to believe that Cardano will become more valuable in the long run. Strong cryptos such as Bitcoin and Ethereum will be able to weather short-term fluctuations without abandoning their general upward trajectory. If you believe an asset will perform better over time, finding a long- term trading strategy could be a smart move.
Short-Term Cryptocurrency Investment Strategies
When we look at what a short-term cryptocurrency investment strategy is we can start to see just how similar to a gamble it can be. A short term strategy is one which theoretically enables you to make quick profits. The definition of short-term can be broad anything which lasts from a couple of months right down to a couple of seconds is described as short-term, with the precise time-frame depending on various factors.
These types of strategies are designed around the idea of cashing in on price fluctuations, rather than because you expect a cryptocurrency to grow in value over time. Most cryptocurrencies are incredibly volatile. In 2017 the price of Bitcoin crashed $1,000 in just an hour, this was it's fifth largest hourly price drop since its launch in 2009 the highest drop Bitcoin has seen was recorded at a staggering 20k n December 2017
Is a short-term cryptocurrency investment strategy the right fit for you?
Let's look at some of the key factors to consider before taking the plunge.
Losses are always a probability when investing in cryptocurrency, even if you choose one of the top cryptocurrencies to invest in. Some important things to ask yourself are,
How much of a loss are you willing to accept?
Do you have time to monitor the crypto markets regularly and respond to price fluctuations instantly?
Will a short-term strategy yield greater potential profits than a long-term strategy for your chosen assets?
Are you familiar with technical analysis?
If you’re planning to start using a short-term strategy, you should familiarise yourself with it before you begin. In short a technical analysis looks at patterns and analytic charting tools to see the strengths and weaknesses of the crypto, keeping those in mind for its future patterns.
How much, and how often, has the price of your chosen crypto fluctuated in the past?
Short-term cryptocurrency investment strategies can be a potentially fruitful strategy, as long as it suits both your lifestyle and your chosen assets. These strategies are particularly suited to cryptocurrencies which have a low market cap but a high trading volume. This means that lots of traders are currently buying and selling, which will keep the price moving.
News hype is another thing to watch, if the cryptocurrency has recently been in the news even if it’s not one of the top cryptocurrencies to invest in 2021. This can cause a bit of movement in a project and usually what follows is an fluctuating value on the market by using short term strategies you can catch the lows to buy and sell it back in the green for a quick flip.
Other cryptocurrencies which are good for short-term investment strategies are ICO'S initial coin offerings where investors can buy a coin at the start of a project. Investors can usually buy these cryptos at a very low price, which is almost certain to fluctuate as interest in the ‘next new cryptocurrency on the market’ starts to grow.
Investing in a cryptocurrency at the start of its launch isn’t so much a great idea for a long-term investment strategy, unless you’re an experienced investor who truly believes that the crypto will do well and has a diversified investment portfolio to minimize the risk. However, if you’re simply looking to take advantage of quick-fire fluctuations, it could be a smart short-term investment strategy.
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