There are different ways in which people earn money online, in terms of cryptocurrencies. They earn through staking, mining, yield farming and trading. Today’s focus is on trading. And we want to discuss types or traders and trading strategies.
Scalping
Traders earn profit through capitalizing on market fluctuations of the cryptocurrencies. Individuals buy cryptocurrencies at a low price and wait until the price increases. As a result, they sell them at a higher price, thereby making profit.
The major principle in trading is: “Buy low, sell high.”
Intraday trading strategy
This occurs when people buy and sell cryptocurrencies within the same day. They benefit from small fluctuations in prices of coins or stocks. Intraday- simply means within the same day. Therefore, traders benefit from the fluctuations of the prices of cryptocurrencies during a single day.
This strategy works best if someone buys a large volume of a coin or token. For instance, if someone buys 20 000 Elven coin at $1.10 each in the morning and sells them at $1.50 later in the day, he/she makes a profit of 40 cents per coin.
At the end of the day, the person makes a profit of 20 000 multiply by 40 cents. The profit is $8 000. There is a small upward movement in price but the profit is large, spurred by the volume traded.
Swing trading
The traders buys some cryptocurrencies and hold them for more than one day, waiting for a rise in their prices. Usually, with intraday trading a person holds on a cryptocurrency for 5 to 8 hours, but with swing trading, the person holds the coin or token for about 2 to 7 days. The main concept in both scenarios, is the person buys at a lower price, holds, then sells at a higher price.
Position trading
This involves buying a cryptocurrency and holds it for a very long period of time, say three to five months. The trader only focuses on long term changes in the prices of the cryptocurrency. He/she does not sell when the price is lower than the one he/she purchased it for. The idea the trader has is that, “at last the cock will come home and roast.” Thus, one waits for the price to rise, no matter what. It may take a year. It’s still okay with him/her.
Conclusion
These are broad trading strategies. There are other strategies which fall within these categories such as copy trading. Understanding these categories helps traders to make profit. However, some versatile traders use two or more of these strategies depending on the prevailing market conditions.
Learning how to trade
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