5 Best Cryptocurrency Investment Strategies (that You Should Try in 2022)
Best Cryptocurrency investment Strategies

5 Best Cryptocurrency Investment Strategies (that You Should Try in 2022)

Based on a recent study and a discussion published in Trading Q&A, there are over 10 crore Indians that hold cryptocurrencies intending to increase as well. 

Indian crypto owners

Image Source: TradingQnA

However, with the current onset of the Bitcoin era, comes a lot of ambiguities and uncertainties. Potential holders and investors believe in crypto trading for maximizing profit. 

Along with both pros and cons, crypto trading can be risky with high chances of fraud and scam. In order to perform safe crypto trading, you need to analyze potential strategies for yielding the best results. 

One of the most popular strategies is Day trading, it relies on frequent trades of securities. The traditional buy-and-hold investors are majorly worried about the fruitful long-term performance of their firm while day traders seek an advantage to gain extra and immediate profit opportunities. 

Not only day trading, but other strategies and resources such as stick screening or trading simulator software also are extremely useful to capitalize price movements of stocks, commodities, and currencies. 

Let’s discuss the 5 best cryptocurrency investment strategies for better returns.

Best Cryptocurrencies Investment Strategies

#1. DAY TRADING

The first and foremost strategy is Day Trading which involves buying and selling security such as cryptocurrency within a single day. This commonly occurs in a marketplace, crypto exchanges like Binance or Crypto.com, and stock markets. 

Day trading is done by well-educated and well-funded day traders with an aim to utilize high amounts of leverages and strategies for high stocks or currencies. 

For successful day trading, you can use technical indicators like RSI, Bollinger bands to analyze past and present market trends to enter and exit the market at the appropriate time. Booking profits amid intraday price movements is the basic aim in this mechanism for excessive profit rates. 

Let’s discuss technical analysis.

#2. Technical Analysis

Technical analysis is used with the help of mathematical indicators and chart patterns in order to predict the directions of prices in the next move. 

You need Technical analysis platforms such as Trading View, which are computer software that does the real-time calculations on the backend on market data and you can see the real-time market movements on your computer or smartphone screen. 

RSI, also known as the Relative Strength Index, is one of the popular technical indicators used that appears as a single line beneath the chart. This holds a value between 0 to 100. The closer RSI moves to 100, the more exaggerated the conditions are, making the prices go down. 

Once RSI gets closer to 0, the more oversold conditions become making the prices go high in scale. This is how TA (Technical Analysis) is used for crypto trading. 

Also readMajor bitcoin wallet types

#3. RANGE TRADING

Range trading is an active investment technique that spots a range at which you can buy and sell your asset over a short period (it could be some days or some weeks).

This form of crypto trading works on the statement that prices tend to move within a certain range, and hence traders might buy it when the prices are at a support level and sell them at a resistance level. 

Support is the price level when the demand for security (crypto in our case) is strong enough to stop it from falling down further.

Resistance is the price level when the supply for security (crypto in our case) is strong enough to stop it from moving higher. 

Support and Resistance levels

For example, let’s assume if Ether is trading at $2500 and is predicted to rise to about $3000, the trade between a range will be $2500 and $3000 in the coming weeks. 

You can trade it by buying the Etherium at $2500 and then selling it at $3000 once the range rises. You can repeat the process until you analyze that the currency would no longer trade in the set price range. 

Also read – INDMoney Review (US stock investment made easy)

#4. HIGH-FREQUENCY TRADING

Also termed as HFT or Bot trading, this involves using trading bots. Trading bots are software that use algorithms to execute large trades in a short period of time. The mechanism works on extensive knowledge and advanced programming strategies to execute successful trades through automated software (bots).

Trading bots trade themselves, while high-frequency traders come up with strategies and develop relevant programs for its execution. 

Constant monitoring, algorithm updates, and backtesting are things that are done regularly to keep up with the fluctuating market of these digital assets – cryptocurrency.

Check out Best cryptocurrency wallets for safe storage

#5. SCALPING

Scalping is a quick trading strategy in which you try to earn profit from rather small price movements. The scalp trader focuses on small quick gains from small price fluctuation over and over again.

Using increased trading volumes for profit, scalping does come up with some risks. You should make sure to take care of margin leverage to avoid bad experiences. Secondly, you should be good at chart analysis, quick in decision making, and have enough experience to avoid wasting time. 

Most traders analyze crypto assets, volume, recent and past trends to make the right move in scalp trading. 

You may like to read Impact of bitcoin on the world economy

Final Thoughts

You have now learned about the major strategies that are proven to be an effective source of crypto trading for deriving high and potential benefits. With the right knowledge and industry experience trading can be both fun and beneficial. 

Which is your favorite strategy, do let me know in the comments.

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