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Scalping, arbitrage, long-term and short-term trading are all popular trading styles used by traders around the world. Each style is profitable if you know how to use it. The profitability of a trader does not depend on the chosen style, but on his strategy, skills, ability to work with charts and technical analysis.
Important factors are risk management, money management, the ability to manage your own time and not succumb to psychological tricks. We will talk about several styles that will help you make money on cryptocurrency with the right approach.
Scalping
Scalping is a difficult but interesting trading style that allows you to make good money. The principle is to open a large number of positions during a trading session and hold them for several seconds or several minutes. A trader who chooses this style should not be distracted from the process, he must respond to small price fluctuations quickly and make lightning-fast decisions. The task of the player is to earn as much as possible on small and relatively safe transactions.
A successful scalper can be one who can react quickly, work in stressful and extreme conditions, without succumbing to emotions. This style allows not only making good money, but also to gain significant experience in trading quickly, and learn how to earn money with a minimum starting capital, master market features and basic analysis methods, and get acquainted with the psychology of the cryptocurrency industry.
Short-term trading
If you cannot boast of high stress tolerance or are not ready to work in the rhythm of a scalper, there is an equally profitable, but not as stressful style of trading – short-term. You can choose to day trade and open as many trades as possible in one day. The main rule of day trading is that positions should be closed by the end of the day, preferably profitably. The principle is to generate income from a large number of small transactions.
If you want to work in an even more comfortable rhythm, while being ready to monitor positions closely for several days, you should try swing trading.
This is also a type of short-term trading, but positions are held for several days, optimally up to three. When choosing swing trading, a trader is not chasing the number of trades, but their quality – they must be more profitable than day trading trades.
Long-term investments
Long-term investment is the most relaxed style of trading and is great for beginners who are just getting into the field. Long-term investments are those in which the purchased asset is held for three to six months, after which it is sold. Of course, the task of the investor is to catch the right moment and sell the asset for much more than it was bought.
It is worth investing in several assets to increase the chances of success by choosing long-term investments. Choose cryptocurrencies with high, medium and low capitalization; diversify your investment portfolio so that in the event of a fall in the rate of one coin, you can compensate for losses by the growth of another.
Arbitrage
Cryptocurrency arbitrage is a way to make a profit on the difference in the cost of coins within the same trading platform or on different exchanges. Trading one cryptocurrency among traders at the same time on two exchanges is especially popular. The reason for the difference in the rate of one asset at different sites is often a difference in demand. For example, the exchange rate of Bitcoin on exchanges can differ by $100, $200 and even $300 per coin.
Classic arbitrage is buying a coin on one exchange and selling it on another at a higher price. A trader can open positions with different pairs of digital assets, saving on commissions within the same platform.
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Author: admin_cryptocrew
