What are the different cryptocurrency trading strategies

The inclusion of cryptocurrencies in the portfolios of financial institutions has increased in recent times, according to Cointelegraph. Although they have the same characteristics as traditional assets, they carry a distinct nature.

According to the publication, the characteristics of cryptocurrency trading include the mode of operation, the object and the trading strategy. Trades with these elements show the type of cryptocurrency trading that is taking place in the market. An investor-based strategy determines the method of buying and selling digital assets on cryptocurrency marketplaces.

Based on the data in the publication, the financial risk involved in cryptocurrency trading can be reduced with proper trading strategies, which can also save a lot of money. Below are some cryptocurrency trading strategies that investors should consider:

Trades of the day

This refers to entering and exiting a position on the same day of cryptocurrency trading hours. Also known as intraday trading, its goal is to take advantage of tiny movements in the market. Trading strategies via technical analysis are time consuming, risky and are mostly used by advanced traders.

Cryptocurrency futures trading

This strategy refers to a contractual agreement between two parties to buy and sell a certain amount of an underlying cryptocurrency at a predetermined future at a predetermined date and time. It allows investors to access a range of cryptocurrencies without needing to own any.

Arbitration negotiation

Traders believe in arbitrage strategies to make profit through cryptocurrency trading strategies. Arbitrage refers to buying cryptocurrencies in one market and selling them in another. Traders can gain profits due to the liquidity and trading volume differential.

HODL (buy and hold)

HODLing is an investment strategy in which people buy cryptocurrencies and hold them for an indefinite period of time, allowing investors to profit from long-term appreciation in value. Investors can benefit from this because cryptocurrencies are not subject to short-term volatility and the risk of selling low while buying high can be avoided.


Traders using this method exploit market failures to make profits. Scalpers explore historical trends and volume levels before deciding entry and exit points for the day, as they prefer highly liquid markets.

range trade

It refers to an active investment approach in which the investor determines a price range to buy or sell cryptocurrencies over a short period of time.

(With information from Cointelegraph)

Also read: What are the pros and cons of buying NFT in 2022

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