What are the effective crypto trading strategies?


EOG Member
If you're a crypto trading enthusiast that feels lost in the world of complex trading strategies and unsure markets, this article will deduct any confusion. the planet of crypto trading may appear foreign and sophisticated in the beginning. Still, after understanding the various trading strategies and the tools at hand, it's not that tough after all.

In this post, I set out to find the highest 5 cryptocurrency trading strategies which you can quickly learn and apply to your trading on Multi HODL and beyond.

I have listed an incredible passive income source for you to mix with any trading strategy you would like.

1. Scalping

When appropriately executed, Scalping may be the most effective cryptocurrency trading strategy that you simply have adopted in your lifetime. Scalping is all about making small trades with a minimal time duration while taking in small profits.

The time duration has to be small, ideally but an hour at max. the most important asset for scalpers is volume; the number of trades is more important than the profit in one transaction. Scalpers will never aim for large profits and can't afford to attend for the market to reverse to reduce losses.

On Multi HODL, you're free to open up multiple positions at a similar time for as long, or as short as you would like.

Scalping should never be done during uncertain times, and therefore the best marketplace for a scalper may be a calm market with limited volatility.

2. Reverse trading

Reverse trading is considered one of the most effective trading strategies for cryptocurrency and is predicated on the reversal of the overall trend in the market. To know this intimately, the strategy is all about finding the precise moment when a trend is about to be reversed. If a coin has been bullish a few times, a reverse trader will explore for the time when it'll reverse the trend and bank on it.

Another interesting version of reverse trading is trading by predicting the day's high/low and making money on that prediction. The danger involved in the strategy is the general risk of constructing the incorrect prediction of timing the reversal.

To predict the precise reversal moment, reverse traders also check out support and resistance levels. If a cryptocurrency is trading near a price, the crypto price will likely bounce up from the price. The other is true for resistance levels. Combine this information with market trends to determine your trades.

3. Day Trading Using Volatility

Volatility in cryptocurrencies gives birth to tons of opportunities for traders. Volatility within the market exists for a reason, and through this time, the direction of the market can attend any side. one of the foremost effective crypto trading strategies within these times is cashing in on small trades that happen before a big change in the market.

A lot of small trades during this time results in big profits, and this strategy doesn't include predicting the direction of the market after the volatility has settled down.

4. Buy Dips and Hold

The times when the value of Bitcoin and other cryptocurrencies are down, it'd seem time to stay far away from the market, but that's one of the simplest times to enter a market. A bit like the trend is in stocks, the cryptocurrency market overall is powerful and regains prices after significant falls due to news.

The cryptocurrency market is one of the foremost volatile ones and may change directions quickly. There are many instances when the worth of bitcoin has fallen significantly and recovered after a selected time. This cryptocurrency trading strategy is additionally one of the safest ones but involves time and limited profits relatively.

If you would like to pursue this strategy, I recommend employing a notification tool to provide you with a warning when a crypto’s price has dropped sharply. As an example, you would like to set alerts that get triggered when the price of Bitcoin drops by 15% within a time span of 10 or half-hour. You frequently see a rapid bounce after a sharp drop because many traders attempt to buy some cheap cryptos before the price bounces up again. Therefore, it’s crucial to quickly detect price drops during a relatively small time span. The bounce-up happens minutes after a price crash. You don’t want to receive a notification one or two hours after the crash has happened.

The above image shows a recent example from April 18th, 2021, when Bitcoin experienced a crypto flash crash that exhausted $300 billion in but 24 hours.

Here are some pricing points from the flash crash that illustrate buying opportunities:

April 18, 3:12 AM (UTC): $58,464

April 18, 3:33 AM (UTC): $52,131

April 18, 3:42 AM (UTC): $53,815

April 18, 3:57 AM (UTC): $55,432

If you feel very confident about your strategy, you can build a trading bot that detects dips and automatically buys them. However, it’s tough to make rules which will predict the precise nature of crypto crashes. We prefer to react to alerts so you'll evaluate things and determine the proper moment to buy the dip.

5. Golden Cross and Death Cross Trading

The golden cross and death cross are quite exciting cryptocurrency trading strategies, and you have to know both these terms to execute them properly. The golden cross is essentially defined as the time when a short-term average of a specific cryptocurrency crosses the long-term average. The short-term average is usually defined because of the 50 days average, and therefore the future is defined because of the 200-day average.

The death cross, on the opposite hand, is the exact opposite of the golden cross and is defined because of the moment when the short-term average goes below the long-term average.

Confirming the occurrence of those trends is completed by analyzing the change within the trading volume. Some traders also use other indicators like RSI and therefore the MACD, but volume is considered one of the most effective indicators.

The strategy revolves around buying at the golden cross and selling at the death cross.

I can highly recommend to check this day trading strategy videos on YouTube.

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