There are a lot of approaches and strategies when trading in cryptocurrency and it is important to determine which you are venturing if you are planning to consistently make money in the cryptocurrency market. This enables you to keep focus given that the market has is changing patterns, market events and economic data that might interfere with your analysis.
There are two main types of cryptocurrency trading, long-term trading and short-term trading. This will be depending on your investment goals and the duration of return of profit.
1.) Long-term Trading
Traders buy and hold cryptocurrencies over a long period of time. It can be up to weeks, months, and years with keeping the intention of profiting it later on. This is for traders who are embracing the long-term view, and can be the best option for much more lower fees because the transactions are not as frequent as short-term trading.
2.) Short-term Trading
Traders using this type usually takes advantage of cryptocurrency’s price swings by executing different strategies. It is more active and risky as the market is ever-changing but attaining your investment goals is much more faster and there might be a potential of larger returns if done correctly.
Some of the strategies done by short-term traders are:
a.) Scalping - This is the most common one. Scalping is done by making quick trades with the goal of making constant profit off of small price changes using spot trading and buying. This is done within minutes over a course of multiple transactions. It is also one of the strategies that does no require a large capital.
b.) Day Trading - The idea is the same with Scalping however, trades are made within days. This is much more focused on larger moves and they wait for a valid trading opportunity. Day trading also does not require constant monitoring and management obligations unlike Scalping.
c.) Range Trading - Traders who relay on the span from the high point and the low point of a security within a definitive period of time, focusing on profitable and predictable trades in the current range.
d.) Position Trading - Advanced traders use this strategy as a short-term with a combination of other methods to determine the trend of the current market direction and usually lasts for several days or weeks. Typically, get on board and benefit from both the up and downside of market movements.
It is still best advised to Do-Your-Own-Research on which method and strategy will suite you and to understand better on how you can leverage the market for you trading.