Finance

Top 5 Crypto Trading Strategies 

A lot of people say crypto is the future, but the future is already here. Major companies are venturing into it and some are even accepting it as a means of payment. Elon Musk who is the CEO of Tesla has taken a liking to Dogecoin and he hasn’t made his interests secret.

Musk’s constant tweets on Twitter about the dogecoin have spiked the coin’s value within the past couple of months. Again, Apple is another company that has also embraced the crypto market by purchasing Bitcoin worth $2 billion.

At the moment, cryptocurrency has earned its place as one of the most popular forms of investment with daily transactions reaching billions. If you’re thinking of joining the trend and starting cryptocurrency trading, below are some great strategies you should consider.

Active and Passive Cryptocurrency Trading 

Most advanced digital asset traders or investors prefer this method of trading as it involves two aspects— active and passive trades. What are the definitions of these terms?

Well, as the name active implies, it requires investors to dedicate more attention and time monitoring it. Passive on the other hand simply gives room for a hand-off automated trades.

Amongst these two strategies (active and passive), the former is more popular as it calls for an investor or trader to engage and exit positions within a particular day

Trend Trading (active) 

This is another aspect of active strategy, or in other words, position trading as it is widely regarded by most investors. This particular trading requires an investor to hold a position for a stipulated period mainly a couple of months.

Traders or investors who choose to be on this trend, must equip themselves with direction trends and set strategies which they can reap its benefits from a bull run or bear market.

Scalping (active) 

This is another form of active strategy that focuses on the lapses in the market like the loopholes in liquidity. Most investors who engage in scalping make the process as quick as possible. This means their positions are opened and closed within the shortest period which in most cases can be in a few minutes.

This strategy can be profitable if the scalper knows how to exploit the market inefficiencies. Beginners are not advised to thread on this as it requires detailed knowledge of technical and fundamental analysis.

Buy and Hold (passive) 

If any of the first three active strategies don’t interest you, well, this passive strategy known as buy and hold might be ideal. All you have to do is buy digital assets and hold it for years ignoring the market fluctuations. You can buy in bulk or buy at intervals. History has shown that cryptocurrencies, especially Bitcoin and the top five, are more likely to appreciate in the long term market than depreciate.

Index Investing (passive) 

Index investing is another passive strategy which revolves around purchasing ETFs. You can buy them with cash on exchanges or exchange existing cryptocurrencies for ETFs. An index is created by placing all your assets in a basket and then tracking their total performance with a special token.

Conclusion 

The crypto market is a risky one and requires rigorous study and knowledge to navigate your way around to be successful. The good news is that there are a lot of tools and resources to help you in managing your crypto portfolio with OSOM.

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