Beginner's Guide To The Right Crypto Play Strategy

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Playing Crypto should not be careless, especially if you are still a beginner. Signing in because of FOMO is a frequent error. Here is a beginner's guide to strategy it properly.

The trend of financial institutions including cryptocurrencies in portfolios has increased in recent years. The first pure digital asset to be included in investment portfolio by asset managers are called cryptocurrencies. Although they have the same characteristics as traditional assets, they have different properties.

The crypto strategy that investors formulate in cryptocurrency trading is an algorithm that defines a set of defined rules for buying and selling digital assets in the cryptocurrency market.

This article will discuss in depth various crypto trading strategies such as day trading, futures trading, high frequency trading (HFT), dollar cost averaging and scalping.

How to Play Crypto to Earn Money

HODL

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Asset

 

HODLing is a crypto safe way of playing, where people buy cryptocurrencies and keep them for a long time. This allows investors to benefit from increased asset values. So, how to take profit in crypto with HODL strategy?

HODLing allows investors to take advantage of long-term value appreciation when they invest for a long time. Investors can benefit from the HODL strategy because they are not subject to short-term volatility and can avoid the risk of selling low when buying high.

Because cryptocurrencies have a short history compared to commodities such as gold and silver or fiat currencies such as the United States dollar and euro, they are vulnerable to fraudulent activity such as money laundering. Therefore, some countries may not support cryptocurrencies, which affects the value of digital assets.

Dollar-cost averaging (DCA)

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BTC

In DCA's crypto play strategy, a certain amount of money is invested periodically but piecemeal, allowing traders to profit from market gains without placing their holdings under market risk.

Simply select a fixed amount of money to invest in the cryptocurrency of choice during the specified time to use the dollar cost averaging strategy. Then, regardless of market movements, you keep investing until you reach your goal.

You buy at the highs and lows of the market when you use the dollar cost averaging strategy. In addition, DCA makes it easy to invest in your preferred cryptocurrency over time without being affected by extreme highs or lows as if you were to invest large sums all at once.

Since this is a long term strategy, you will have to pay more fees when trading crypto assets. Therefore, do your own research before implementing any crypto gaming strategy.

scalping

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Trading
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Scalping is exploiting market inefficiencies to make a profit. However, play crypto scalping requires an increase in trading volume to make a profit. Scalpers check historical trends and volume levels before deciding on entry or exit points for the day.

Despite the risks, a savvy trader pays attention to margin requirements and other important rules to avoid a bad trading experience.

Scalping prefers highly liquid markets because it is quite predictable when one should enter or exit the market. Whales or wholesalers usually take advantage of this strategy to trade large positions.

Swing Trading

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Swing

Swing traders play with market volatility for about a week or a month. They form strategies using fundamental and technical trading indicators. In swing trading, traders have enough time to track the price of crypto assets and make investment decisions.

On the other hand, swing trading often requires quick judgment and execution, which is not ideal for beginners. Also, traders need to stay active every day and gauge the market even if they don't trade every day, making it a complex and time-consuming strategy.

However, bots and crypto signals are examples of automated technologies that can help execute swing trades faster. For example, a trading robot will scan the market and buy and sell assets without human intervention once certain criteria are met.

Read also: Differences Coins and Crypto Tokens Until Their Effect on Prices

Trading Trends

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BTC

Trading trends or positions involves holding positions for several months to profit from directional signals. Usually, trend traders enter short positions when they anticipate traders going down. However, they invest for the long term if they forecast an upward market movement.

Regardless, they should consider trend reversals using indicators like moving average convergence divergence and stochastic oscillators to increase the success of their investment strategy.

Since novice traders are concerned about the financial risks associated with crypto investing, trend trading is for them. Nonetheless, whether a beginner or an advanced trader, one should do their due diligence before committing to funds.

There is no best or worst way to play crypto. If you are looking for the best crypto exchange for day trading or the best app for trading cryptocurrencies, You have to focus on your financial or investment goals first.

In addition, you need to be aware of the asset class you want to add to your investment portfolio, along with the level of risk you are willing to take.

Read also: Staking Is a Crypto Deposit, Here's the Explanation!

Next, familiarize yourself with the basics of cryptocurrency trading such as order types and decide which trading indicator you want to adopt.

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