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Trading Strategies

·       Buy & Hold

Traders of this nature are commonly called “holders” within the Bitcoin community. They tend to buy and hold proponents that take a long view. They are typically ones that utilize the very long-term approach and bank on the rising price of Bitcoin. They think more regarding monthly, weekly and sometimes but not as often daily charts. They are a very distinct type of trader with the primary goal to get as much cryptocurrency as possible as they foresee it becoming increasingly valuable as time progresses on.

As of now, this method of trading is highly realistic with Bitcoin. Bitcoin is far superior to nearly every other currency in the market as of now. And it’s continually climbing. There is a limited amount of only about 21 million coins, with inherent advantages over traditional fiat currencies. Anyone trading in buy & hold methods of trading usually base their actions on many different fundamental analyses than that of other technical analysis based decisions. They typically make their major decisions on the potential of Bitcoin, rather than on the current trends and charts.

They’re relatively unmoved by daily changes in Bitcoin prices. For the most part, the fluctuations that happen throughout the day rarely bother them. Many don’t even mind the extreme changes that occur and those with a lot of experience know the volatile nature of Bitcoin because of its’ history. They also tend to think of price crashes as major opportunities in which they can purchase more Bitcoin and make a lot of money in the long run. It’s like a sudden discount they love to capitalize on. They may pull profits if the price hits a peak they don’t think will maintain but rarely will they liquidate all of their Bitcoin assets at one time.

·       Swing Trading

Traders of this nature typically hold for a few days or a few months. The strategy is to trade significant price, moving between two different extremes. For example, if the price isn’t following a strong upwards or downwards trend, it’s tendency is to range between a high and low cost.

But the levels at which buyers or sellers reliably enter the market correlate with volume. The result is a fixed price of direction reverse. Bitcoin price can even remain within set levels for a specific period and still be OK for swing trading. Swing traders also consider many other factors; they rely heavily on technical indicators that reveal oversold and overbought conditions seen on the market. These conditions are usually dictated by common sense, and self-explanatory conditions and terms that indicate market sentiment as well as momentum, something that can become unbalanced and needs to be corrected. Many of the indicators frequently employed by traders of this nature are Bollinger Bands, RSI and Stochastic Oscillator.

Once Bitcoin prices reach a level, the traders then bet on a reversal of price. This is especially true when indicators are based on a change or direction. If the price continues instead of reversing back, it’s clear sign that it’s time to exit. There is a good time frame match that coincides with bigger price moves. And if prices continue past a reversal point that is projected, there is typically a minor loss. If on the other hand, they operate as predicted, then there is a lot of profit to be made.

·       Trend Trading

This is a harder to navigate trading technique than many others. The trend is typically your friend until it ends. Traders of this nature often enter lengthy or prolonged patterns with the goal of capitalizing on it until the end of the trend. Not like swing trading, trend traders have no specific target in mind. And this is especially true when prices reach new highs like Bitcoin has this year.

The secret to active trend trading is to make it a type of art form, one where the trends formation is subtle and in early stages before everyone else jumps on it. With trend trading, you’ll be able to hit higher highs with emerging trends at a consistent pace with continually growing prices and declining ones as well. It can be hard to get the hang of trend trading, taking some time to break through to another level.

Trends typically grow as people start to rush towards them, they gain momentum and when strong, are commonly noticed by non-Bitcoin owners and the media. In turn, this continually draws more and more attention to a trend in the long run.

Eventually, prices go up, reach a parabolic state and then dramatically start to extend. It’s at this point that the trends typically start to crash at an alarmingly, almost violent rate. Quality trend traders get in quick, make money and exit before the crash that hits everyone else hard. Trying to pick the tops is a foolish way of trend trading as it’s usually smarter to wait for assurance that a trend is growing. You can get confirmation through the Rate of Change and Moving Average Convergence-Divergence. Then you’ll be able to take the profit sooner rather than later.

·       Day trading

People who day trade know how to keep a position on a market while they’re on duty. They’re typically operating on a 12-16hour shift minimum. Sometimes their shifts can go much longer. And in fact, when it comes to day trading it is similar in intensity to the stock market. You’ll often hear them complaining about their lack of sleep or looking like zombies, but they are a specific type of trader that takes a certain mindset to become. They may alter between swing trading and day trading, or nurse specific accounts until it’s time to bear them out or liquidate them. Traders of this nature might trade on trends as well and will scalp when needed.

Individuals who day trade are also likely to follow different sub-hourly or hourly charts with the occasional reference to higher time frames when needed. Their trading style is often better reserved for the people who want to make trading cryptocurrency like Bitcoin their fulltime occupation and not some side hustle.

·       Scalping

There are also scalpers, people who are looking to profit on the minute to minute exchanges. They typically use different imbalances in the market to order and book a multitude of minor profits. They usually get massive returns on a lot of smaller profits. It’s more about the volume of trades here than the size of the trades themselves. Scalpers use charts that usually only show about 5 minutes of duration or so. This is a tough trading method and takes a lot of experience to get into.