There is no one-style-fits-all approach in crypto trading. You will find a wide range of trading styles, ranging from scalping which seeks to make rapid moves to holding where you hold onto your assets for a long haul. Many of the crypto trading styles tend to overlap with one another but you must select one which aligns with your needs and mindset. You may need to tweak it from time to time because certain strategies are better-suited for certain time-frames. It may be a good idea to try out a few of these to see which works for you:
- Scalping: In this strategy, you have to make fast trading decisions to enjoy continuous profits, albeit small. You can make trades rapidly provided the situation is favorable. Scalping is intense and demands constant focus. When you get good at this, you can make faster profits. But you need to know risk management techniques and develop skills to make small but continuous gains.
- Day Trading: This is similar to scalping because it is short-term trading. The only difference is that you make trades within a single day. Day traders can use range trading, scalping, etc to make profits in a day. This strategy is the exact opposite of holding onto your assets for the long-term. Profits are likely to be higher than in scalping provided you have some expertise and an appetite for risks.
- Range Trading: Crypto assets are usually within a certain range and this could either be accumulation, where the big players accrue more coins, or distribution, where coins are sold at high prices before the biggies let the market crash. Range trading means trading a range and setting stops, regardless of whether the range is at a bottom or at an all-time high. With a range, there is clear resistance and support and trading is easier.
- Intraday Trading: It is akin to day trading but it lets you hold onto your trade position for slightly more than a day. The crypto market never sleeps and there is no definite end to a trading day.
- Swing Trading: This strategy focuses on finding an entry position and holding onto it until you reach your goal or specific exit conditions are satisfied. Swing trading is typically conducted over weeks or days. So, you basically take a position and then sleep on it; you monitor the ups and downs without panicking. Once you can do technical analysis you can detect resistance and support levels faster. The idea is to find the bottom of a wave and then ride it to its top.
- Position Trading: This is an elaborate form of swing trading where you take a position and then maintain it for months or years. It is simple but demands discipline and patience. It is more on the lines of investing because it is a long term style of crypto trading. The goal is to make profitable long-term trades depending on overarching trends.
In trading you take a position and aim to take profits. In investing, you own an asset and hope that its value will escalate over time. All the strategies discussed above need patience. You should be prepared to experience a series of losses. But if you find that your trading style is not working for a long time now, you can consider a change or tweak it. The idea is to be right more frequently than wrong because you cannot be right each time.