Crypto trading is speculation on digital assets’ price difference to receive a profit. That means a trader purchases assets at a lower price and sells them when the rate grows. There is also an option when a trader speculates on the future asset’s rate. It is called futures trading. This trading tool means that a user predicts the future rate of the asset and pre-agrees about the day when he sells or buys the asset. Thus, the trader can foresee the coin’s price dropping and receive income even on a downward market trend.
So now that we answered the question “What is cryptocurrency trading?” we can move forward and learn the strategies it implies.
Strategies of Cryptocurrency Trading
Trading strategies differentiate by the period you buy and sell cryptocurrency for. It may be:
- Day trading (when you enter and exit positions within one day).
- Position trading (when the period between purchasing and selling an asset may range from a couple of weeks to a couple of years).
- Swing trading (more than one day but no longer than a couple of months).
- Scalping (from 1 minute to 30 minutes timeframes).
The most difficult types of trading are day trading and scalping, for they demand quick decision-making and reaction to market fluctuations.
Novice traders should begin with long-term strategies such as position trading (or “buy and hold” strategy).
The Best Cryptocurrency Exchanges
Popular crypto platforms such as Binance, Coinbase, and WhiteBIT offer a variety of tools and mechanisms for convenient and profitable trading. Cryptocurrency exchanges also offer many helpful tools:
- trading bots;
- stop-loss and take-profit tools;
- future trading;
- margin;
- spot markets;
- crypto charts;
- staking;
- etc.
To practice all the trading tools, users can take advantage of demo trading on the WhiteBIT and Coinbase cryptocurrency exchanges. A demo account allows users to receive skills and confidence, learn how to buy and sell crypto, use leverage, configure a bot, withdraw and deposit funds to an account, and many more features.
