The 5 crypto trading strategies that every trader should know

The 5 crypto trading strategies that every trader should know
The interest in trading the assets remains great, now that many new cryptos are still coming onto the market. Find the right cryptocurrency trading strategy by reviewing our list of strategies below.

Crypto trading: what you need to know Cryptocurrencies are traded on decentralized markets, i.e. they are not issued or backed by a central authority such as a government. They are traded over a network of computers (the 'blockchain'). Due to the decentralized nature of cryptocurrencies, they are unaffected by many of the political and economic concerns that influence traditional money.

However, this does not mean that cryptocurrencies are not affected by external factors. On the contrary, cryptocurrencies are unpredictable and influenced by factors such as supply and demand, media presence, integration of e-commerce payment systems and major events.
Because of these factors, it is important that your cryptocurrency trading strategies not only focus on dealing with volatility, but also focus on diversifying your portfolio. Trading multiple asset classes, including cryptocurrencies, can help you diversify your portfolio. By trading only one asset class or market, you limit yourself to the conditions of one market, instead of thousands.
By diversifying your trade types, you can hedge against the risk of a market that may move in the opposite direction to your expectations and take advantage of positive moves.

crypto trading Due to the volatile and unpredictable nature of cryptocurrencies, it is important that you have a crypto trading strategy in place before trading the market. When we talk about cryptocurrencies, we refer to speculating on cryptocurrency price movements through a CFD or Turbo24 account. These are leveraged derivative instruments that allow you to speculate on price movements without owning the underlying asset. Read more about trading CFDs and Turbo24
You can buy cryptocurrency through an exchange, which means you buy the coins yourself. You will need to open an exchange account, fund the full value of the position and store the crypto coins in your own wallet until you are ready to sell them. Buying cryptocurrencies directly can be complex and is not recommended for novice traders

Moving average crossovers To trade moving average crossovers, you need to understand MAs and crossover trading strategies. Let's start at the beginning: A moving average (MA) is a delayed technical indicator that takes price points of a financial instrument over a specified period of time and divides them by the number of points to create a single trend line. This single trendline allows you to determine the direction of the current trend and reduce the influence of random spikes. It also allows you to examine the levels of support and resistance while analyzing previous price movements.
How do you incorporate this indicator into your crypto strategy? One of the most important methods of using the moving average is called 'crossovers'. A price crossover, or crossover, occurs when the asset's price moves above or below an MA to signal a possible change in the trend. To apply a moving average crossover in crypto markets, you must wait for the price crossover before going long or short on the crypto in question, using a financial instrument such as CFDs. Another applicable strategy is to apply two moving averages to a chart: one short-term and one long-term. When the shorter MA moves above the longer MA it indicates that the trend is going up, this is known as a 'golden cross', which can be considered a buy signal. When the shorter MA goes below the longer MA it indicates that the trend is going down, this is known as a 'death cross'.

Relative Strength Index (RSI) The Relative Strength Index (RSI) is a technical indicator, used to determine momentum under market conditions, over-bought and over-sold. This can also be used to highlight signals of divergence and hidden divergence in the financial markets. This type of trading is also known as trend trading.
The RSI is a calculation of profitable price closes versus unprofitable price closes, shown as a percentage. It is calculated using the formula: RSI = 100 – (100 / [1+RS]) The indicator is displayed as a percentage out of 100, with a lower percentage usually indicating an oversold position and a higher percentage an overbought position. So what is the best crypto strategy for trading RSI? Well, that depends on your risk appetite and trading style. The RSI can be used for trading both short and long signals when the price is also trendless. However, since the trend in the markets changes regularly, using an RSI indicator to highlight entry and exit trends will give you an idea of when to do this.

Event-driven trading A strong media presence of a specific coin or crypto exchange can influence the crypto markets. This cryptocurrency trading strategy focuses solely on taking advantage of these “events.” It is a popular trading strategy for novice traders. News coverage of current events can influence the prices of many things such as forex pairs, stock indices and commodities – not just cryptocurrencies. This influence is not just speculation, many experienced traders benefit from it. Typically, you wait for the market to consolidate before an expected news release (such as an earnings report) and then trade as soon as a market breakout occurs. However, due to the volatile and unpredictable nature of cryptocurrencies, you may have to wait until such news is published before trading. Simply put, you buy your chosen crypto when positive news is announced and you go short when negative news is announced. Scalping Scalping is the act of opening positions in accordance with a trend, entering or exiting the market multiple times in a short period of time as it develops. Individual trades are held for only a few seconds or at most minutes, so it is one of the shortest strategies. This trading strategy works very well for active day traders. Scalping focuses on short-term price changes, driven by quantity. Once the trade becomes profitable, close your position. You don't have to wait for the market to trend as you need to act quickly and close trades that lose money immediately. The more volatile the market, the better it is to scalp.
You may be able to use 'tear-off tickets' when you scalp. This allows you to establish a position in the opposite direction so that you are ready to exit, with a profit or a loss. Keep in mind that scalping can be risky if you place multiple trades on a very short basis. It is essential to manage your risk carefully.