Wednesday, October 30, 2021

Best Cryptocurrency Trading Strategies

Every trader has a trading strategy but successful traders have not just one but multiple winning strategies that they use at appropriate times. One strategy may work for one scenario but completely falter in another. Having multiple strategies ensures that the trader keeps on winning regardless of the market action. In this article, we will look at some of the best cryptocurrency trading strategies you as beginner can look to take advantage of in your journey to becoming a successful trader.


Accumulation is a long game trading strategy meaning that a trader collects a coin or token every opportunity they get with the aim of selling at a later date when the market is favorable. In cryptocurrency, this is referred to as ‘hodling’ which is not only a play on the word ‘hold’ but also an acronym for the phrase ‘hold on for dear life’. It is a trading mantra on the cryptocurrency trading circles that is used to assuage the community not to dump their assets but instead hold them for an eventual market turnaround.

With accumulation, the goal is to build one self’s portfolio for the long haul and that means buying a large amount and waiting for the perfect opportunity to sell. Some of the leading and oldest coins including Bitcoin and Litecoin and Ripple’s XRP have made handsome returns to accumulators over the years which confirms the effectiveness of the strategy.

Shorting after Price Surges

This happens all the time and cryptocurrency is well known for its volatility. Prices of assets surge all the time then dump depending on how fast they rise. Price surges that are sudden and steep re almost always followed by similar price corrections. Therefore, you can also decide to trade on these frequent trading signals. Shorting and longing are trading terms mean speculating on the price falling and rising respectively. Cryptocurrency trading platforms such as Binance and BitMEX offer margin trading which allows traders to trade on markets rising and falling and that means making money regardless of the direction of the trend.

Leveraged trading

Trading on leverage simply means borrowing money from a trading platform in order to open a larger trading position which consequently means the potential of making larger gains. For instance, let’s say you have $1,000 to trade. If you wish to leverage your trade to make higher gains of let’s say 10-times, you will borrow $9,000 from the platform and open a position for $10,000. A positive price move of 10% on your expected direction will mean that you make $1,000 in profit and once you return the $9,000 that you borrowed, you remain with $2,000. That is a 100% profit on your trade. The only downside with leveraged trading is that the risk factor is also increased by a similar margin to the profit factor. So it is riskier to use leverage than without.

In summary, trading is a skill that can be learned and perfected. Keep at it, start with the strategies outlined above and work your way to several other more advanced strategies and your trading journey will be more than just rewarding but also fulfilling.

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Best Cryptocurrency Trading Strategies