MODULE 1: CRYPTOCURRENCY TRADING STRATEGY. 

LESSON 1: WHAT IS A CRYPTOCURRENCY TRADING STRATEGY? 

A cryptocurrency trading strategy is a set of guidelines you adhere to when creating plans and placing deals. Trading strategies frequently outline the kind of transactions to carry out, when to execute them, when to exit them, and how much capital you should risk in each position. Your bitcoin trading strategy is a plan of action you develop to assist you in making money when you buy or sell in the cryptocurrency markets. This strategy employs several analytical techniques to identify specified market conditions and price levels, including important resistance and support zones. 

LESSON 2: WHY DO YOU NEED A CRYPTO TRADING STRATEGY? 

Trading should not be based only on intuition or the assumption that market events are random. Unintentionally made trades can bring in a large profit. Even with your greatest efforts, you can’t guarantee that you’ll always get the same results; achievement like this is simply a product of chance. Successful trading relies on well-thought-out tactics. They are aware that, despite their volatility, the values of cryptocurrencies typically exhibit specific patterns. Trading, therefore, necessitates a planned approach. We wish to help you understand the many trading techniques you need to generate regular earnings. Out of all the trading strategies available, we will talk about the most popular ones. Most of the trading strategies we’ll go through work in other financial markets as well, such as forex, equities, ETFs, etc. However, the focus of this article is on cryptocurrency. 

MODULE 2: TYPES OF CRYPTOCURRENCY TRADING STRATEGIES 

LESSON 1: 5 TYPES OF CRYPTOCURRENCY TRADING STRATEGIES 

Arbitrage, buy and hold, swing trading, day trading, and scalping are the top five bitcoin trading methods. We don’t offer you any suggestions on how to use these crypto trading systems, even if we describe what they are and how they work. Therefore, before buying or trading cryptocurrencies, always conduct your investigation. 

SCALPING 

Scalping is a different popular trading strategy on the bitcoin market. Investors can profit from small price variations that happen often with the use of this trading strategy. The goal is to steadily increase little daily profits to a sizeable sum. Scalpers usually use strict stop losses to minimize risk and increase leverage to place more trades. They trade in time frames of one minute, fifteen minutes, and thirty minutes. Usually, these transactions are completed in a matter of seconds or minutes rather than an hour or longer. 

DAY TRADING 

In day trading, positions are opened and closed on the same day. Day traders, or those who trade only within a single trading day, aim to profit on intraday price moves. Even though they operate on shorter time frames than day traders, scalpers still close their positions on the same day. Making money off of volatile bull and bear market activity and minute price movements is the aim of day trading cryptocurrencies. Day trading tactics are built using technical analysis. Scalping is suitable for novice traders, whereas day trading is a time-consuming and risky method. 

SWING TRADING 

Trades made using this approach often last longer than a day but no longer than a few weeks or months. Some investors refer to this technique as a medium-term trading strategy since it sits in the middle of the day trading and position trading strategies, providing traders more time to consider their options. This trading style is typically advised for novice traders because it allows you to make trading decisions with less emotion or rationality than you would with a shorter-term strategy. 

BUY AND HOLD (POSITION TRADING) 

Position trading allows for exceptionally long-term holding of trading positions. It can take months or even years. This strategy is often used by traders that focus more on long-term trends and less on short-term price volatility. When making this type of transaction, traders frequently focus on the daily, weekly, and monthly timeframes. Using fundamental research as well as additional factors like market trends and historical patterns, position traders also evaluate potential price trends in the market. 

ARBITRAGE TRADING 

Arbitrage trading is the process of purchasing cryptocurrencies on one market and selling them on another to profit from price disparities. By taking advantage of the low price correlation between crypto assets provided on two or more exchanges, the trader profits. For instance, if Bitcoin costs $43,000 on Binance but $43,400 on Coinbase, you may decide to buy Bitcoin on Binance and then send the BTC you bought to Coinbase so you may sell it there for a higher price. Because there are so many exchanges for the spot market, there are nearly endless prospects for cryptocurrency arbitrage. As a result, traders search for more effective strategies to spot and profit from price discrepancies between various exchanges, and this tendency is predicted to persist. 

LESSON 2: CHOOSING YOUR OWN PERSONAL BEST CRYPTOCURRENCY TRADING STRATEGY 

Your trading style will be determined by your personality and the time frame you choose to trade on. If you feel comfortable spending the entire day seated in front of your trading chart, entering and leaving several trades at regular intervals, then scaling might be a good option for you. On the other hand, if you want to trade part-time while simultaneously engaging in other activities, you might discover that a longer trading technique, like swing trading, is better suited to your needs. The length of time you intend to spend trading is a crucial factor to take into account while creating a trading strategy. On each trade, scalpers look for profits in only a few pip increments. They frequently enter and depart the market while transacting in big volumes every day. Swing traders, on the other hand, tend to hold onto their positions for longer periods, which can last anywhere from a few days to many weeks or even months. 

TAKE YOUR TIME AND DEVELOP A CRYPTOCURRENCY TRADING STRATEGY. , 

It might be challenging to develop a bitcoin trading strategy that suits your financial goals and personality. After reading about some of the most popular crypto trading strategies, we hope you will be able to choose the one that will work the best for you. Keep a journal where you can easily keep track of your trades’ results so you can determine which are profitable and which aren’t. You should monitor and adhere to the trading strategies you decide on. Be careful not to deviate from the planned constraints you establish for yourself in order to identify which tactics are producing the desired results and which are not

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 This is an extremely important section and lays the foundation needed to be a successful trader. There is no set legal framework for this and the more important thing is the set of beliefs and principles followed by the trader. This consists of several areas such as risk management, trading strategies, trading expectation, risk tolerance, and individual capital status. Trading decision-making is a combination of all these. It is best to study these topics further and prepare a theory that suits your needs. The following are the top trading strategies and by combining these with other technical analyses and putting them in the decision-making process, more successful results can be achieved.

Trend following strategy

The trend-following strategy is to buy when the price of an asset is in an upward trend and short when the price of an asset is in a downward trend. In trading, a trend is when the price moves in a specific direction. In this strategy, traders enter a long position when the price goes up and enter a short selling position when it goes down. This trading strategy is widely used in all markets such as forex, crypto, and stocks.

Day trading strategy

The day trading strategy involves buying and selling financial instruments to close the position at the end of the day to profit from small fluctuations in price. Day traders focus on factors like liquidity, volumes, and volatility before opening a position. Day traders base their decision-making on tools like candle stick chart patterns, trend lines, and volume bars. To be successful in day trading, a special thing they must have is to control their emotions and carry out the trading process.

Scalping trading strategy

Scalping is a trading strategy that focuses on profiting from small price changes and making quick profits by reselling. During scalping, stocks with high volume are selected by tracers. The most important thing is that in scalping you must have a correct exit strategy. The reason is that you can lose the value of all the small profits you have made with one loss. A scalping trader makes hundreds of trades per day, and you can succeed in scalping by making the percentage of profit higher than the percentage of loss.

Fibonacci retracement trading strategy

Identifies the main support and resistance levels and the importance of these increases to make future decisions to trade after the market price reaches the main support or resistance level. The Fibonacci trading strategy uses the “golden ratio” to determine trades entry and exit points in all time frames (1 hr, 2hr, 4hr, 1D). By following a trading strategy like this Fibonacci retracement, you can control your emotions and engage in trading activities. For example, if you use FR of 1hr duration, you can get more successful results from trading without getting caught by emotions by getting confirmation from higher timeframes (4hr, 1D) and entering trades.

Breakout trading strategy 

This strategy looks for levels or areas beyond which a security has been unable to break, and waits for it to break beyond those levels.  (since it can move in that direction).  When a price moves beyond one of these levels, it is called a breakout. Traders use the technical analysis method to identify these breakouts. A breakout trader usually  looks for price patterns, for example, where the price of a security has been resistant to moving above or below a specific price level or price area. Then, the breakout trader attempts to profit by entering a trade in the direction of the breakout, assuming that the price will continue to move in that direction.

Swing trading strategy

This means that trades are made for both movements in any financial market. They buy when the market is going to go up and short when it is going to go down. They study technical analysis and do trading in over-bought and oversold situations. When there is a strong trend, swing traders work to enter the direction of trade by retracement swings. Especially since they do both long & short, they can get more trading opportunities.

Position trading strategy

Position trading is a popular trading strategy where a trader holds a position for an extended period, usually months or years, ignoring small price fluctuations in favor of profiting from long-term trends. Position traders tend to use fundamental analysis to evaluate possible price trends in the market, but other factors such as market trends and historical patterns are also taken into account through technical analysis.

Over-bought and over-sold strategy

Often used in forex and the stock market, it identifies overbought & oversold situations at support and resistance levels through RSI (relative strength index). This belongs to a family of trading tools known as oscillators – so-called because they oscillate when the market moves. When the RSI value is above 70%, the market is considered overbought. This means that traders are speculating that the market may return to a downtrend. Also, when the RSI reaches a level below 30, it is speculated that the market may enter an up movement again.

News trading strategy

Trades are done here based on market news and market expectation. It is essential to have a skilled mindset to gain an advantage from trading before and after news expires, and this can be introduced as a combination of having access facilities to quickly access news and making relevant decisions quickly. The expectation and reactions of the financial market participants are more taken into account than the news.

End-of-day trading strategy

This is where trades are entered at the time the market is scheduled to close. Here, this trades division refers to trading with the understanding that the price will settle at the end of the day. An important thing that happens here is that more attention is paid to the closing price and the price movement of the previous day. They can speculate on the price. Also, they can get more benefits by placing stop loss and taking profit opportunities following a proper risk management and entering trades.

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