When searching for crypto trading strategies, you’ll typically encounter an advertisement resembling an article, with a picture of a young man casually leaning on his brand-new red Ferrari and the bombastic headline “Do You Want to Become a Millionaire Overnight?”. And if you click to become a millionaire, you’ll be guided to a “revolutionary” trading software, which is so good that it is forbidden by the elite.
Note this content is not a financial advise.
The truth is – there’s no software to make you a millionaire, let alone overnight. There is a chance to make quick money by trading, though it’s highly unlikely or at least extremely rare as a Halley’s Comet, so every 74 to 79 years, someone gets really lucky. Trading can be lucrative, but not always, and not for everyone.
Now that the reality check is over, let’s see what real crypto investors do and the recommended strategies for beginners to minimize the risks and increase their chances of success in such a dynamic market as the world of cryptocurrency.
Contents
Lesson #1: Learn the Basics
When reading articles for beginners or watching live streams by crypto trading experts, you might wonder whether these people speak the same language as you do. They typically use a bunch of terms related to the cryptocurrency market that aren’t (yet) familiar, which can be detrimental to countless beginner investors.
And while it’s true that experts’ trading tactics really work, in reality, getting results with the Range Trading, Crypto Arbitrage, Breakout, Pullback and Long Straddle strategies takes a lot of time, effort and, above all, expertise.
For a beginner, starting with the basics is of the utmost importance. Like a baby learning to walk for the first time, making the first step takes a lot of practice. First, a baby spends some tummy time learning how to move the back and neck muscles. Then, they learn how to sit properly and crawl, before finally taking those tentative first steps.
Similarly, in the world of cryptocurrency, beginners should start by acquiring foundational knowledge. This involves understanding basic concepts like blockchain, wallets, and how to store cryptocurrencies securely.
As they gain confidence, they can progress to more advanced topics such as market analysis, trading strategies, and risk management. Just like a baby gradually develops motor skills, a novice in the crypto space can advance step by step, building a solid understanding of basic terms before indulging into the complexities of trading and investment.
Lesson #2: Choose Crypto Trading Platform
Your success or, let’s say, your potential profit is directly related to your trading platform choice. Not all crypto trading venues offer the same conditions, and each platform excels in one or more areas.
Think of grocery store shopping – for example, Granny Smith apples are identical. They have the same taste and texture in every store. Still, they are cheaper in some grocery shops. For example, a grocery store that offers cheap Granny Smith apples might fail to provide more competitive prices for grapes.
Similarly, in the crypto world, trading platforms may have varying fee structures, user interfaces, security features, and available cryptocurrencies. Choosing a platform that meets your needs and goals is crucial. Much like selecting a grocery store for specific deals, opting for a trading platform that suits your preferences can enhance your overall trading experience and potentially contribute to higher profits.
For this reason, it is imperative to do your due diligence and find a safe, secure and reliable trading platform to open your individual or institutional crypto trading account. Make sure the selected operator offers tight spreads, smooth UX and an extensive list of available markets, allowing you to diversify your portfolio.
Lesson #3: Start With Event-Driven Trading
If you just entered the world of trading, technical and fundamental analysis may not be your biggest strengths, which is only normal. But that doesn’t mean you’ll be short of earning opportunities.
Evaluating investments and identifying crypto trading opportunities based on price trends and patterns is an advanced skill. Getting to the point where you can decide based on past trading activity and price changes will take some time, more or less.
However, reading the news and following the latest trends and events doesn’t require technical or fundamental expertise. You don’t have to be a crypto expert or a math guru to predict the potential price movements based on trending events.
Many experienced traders take advantage of news coverage that often influences the prices of cryptocurrencies. Just remember what happened to the Dogecoin price when Elon Musk replaced the Twitter bird with Shiba Inu.
Before Musk’s action, the popular memecoin was traded at around 7 cents. However, once the Shiba Inu logo appeared on Twitter, the asset’s price jumped by 20% overnight and was traded at around 9 cents.
In short, this trading strategy includes buying cryptocurrency when positive news is announced or cashing out crypto when negative news comes out.
Lesson #4: Scalping
This strategy also requires little technical knowledge, but it necessitates a thorough commitment and full concentration.
Scalping involves frequent entering and exiting the market in a short period. You hold several individual trades for a few seconds (minutes tops) and follow minute-to-minute price changes. Once you evaluate the trade has become profitable, you exit the trade and hopefully collect your profits.
The common rule here is – the more volatile the cryptocurrency market is, the better conditions for your scalping strategy.
However, this trading method can be risky if you’re trading on a larger number of cryptocurrencies in a short period of time. Approach each trade with great caution and manage your risk carefully. And also, never spend more than you can afford.
Conclusion
There are no shortcuts in trading. It is highly unlikely that you’ll become a millionaire overnight. To make higher profits, you need to become extremely knowledgeable about the cryptocurrency market. However, that doesn’t mean you’re bound to be in a drawdown.
Learning the basics of storing cryptocurrencies and choosing the right crypto wallet is a step in the right direction. Afterward, you should select the right platform with clear and transparent trading conditions. While grasping the knowledge about technical and fundamental analyses, try trading strategies that require zero technical expertise, like scalping and event-driven trading. Finally, you should be mindful of the trading risks and run a strict budget policy.
