Cryptocurrency Trading Strategies

Cryptocurrency presents a great opportunity for investment as many see digital currencies as the future of our money system. Those who invested in Bitcoin or other cryptocurrencies when they were still young have already made a great deal of profit. The only caveat is that cryptocurrencies are incredibly volatile. As such, there is great potential for profit but also a high level of risk. With the right trading strategies in mind, you can reduce your risk and maximize your profits. Here are some of the most popular crypto trading strategies.

Remember Not to Invest More Than You Can Lose

The golden rule of cryptocurrency trading is to never invest more than you can afford to lose. This is actually the same hard and fast rule you should follow with any risky or volatile investment. If you cannot afford to lose the funds, then you may be out of luck when the market turns. Remember that in addition to losses from market drops, there are other potential risks unique to crypto investing, such as hacks. While you can minimize those risks, the best strategy is to only invest what you can afford to lose.

This will stop you from financially ruining yourself. It will also reduce the pressure when trading, letting you take your time to make a smart decision.

Research Before Investing in an ICO

Investing in a cryptocurrency during its ICO can be one of the best ways to make a profit. This is because, during ICOs, cryptocurrencies tend to sell for significantly less than they will later on. Most ICOs offer steep discounts, particularly in the first round of funding. The issue, however, is that there are thousands of ICOs and many of them will just waste your money.

Because of this, you should only invest in ICOs if you have done a great deal of research. Only invest in ICOs if the coin has a legitimate use that there is a demand for and the team seems reliable with a strong track record. The best strategy is to choose an ICO with a team that has experience and a project with a great deal of community support. Ideally, there will be a good legal framework in place between contributors/investors and developers and the funds will go into an escrow wallet.

Research Before Any Investment

While research is particularly important before an ICO, you should also do a similar amount of research before purchasing any cryptocurrency. Choose cryptos that serve a strong purpose and disrupt an industry. They should have a truly useful technology. Opt for cryptocurrencies that experts predict will do well in the future. Of course, you should also research the crypto’s price history so you can see its potential and make sure you buy it low.

Stay up to Date With News and Trends

Many of the cryptocurrency trading strategies overlap with those associated with traditional assets. One of these would be the idea of doing your research in general and staying up-to-date with news and trends. If you want to be serious about investing in and actively trading cryptocurrencies, you need to read the cryptocurrency news regularly, ideally daily. This can be as simple as following a few major crypto news websites and at least reading the headlines, but the more research you do, the better equipped you will be to make decisions.

Balance Your Portfolio

As with more traditional investment strategies, a smart strategy for cryptocurrency trading is to balance your portfolio. In the case of crypto, this can be as simple as dividing the amount you want to invest up into several different coins. For this to work best, choose coins that have different utilities. In other words, invest an equity coin, a security coin, and a privacy coin. This will reduce your risk since the profits from one coin can help balance out the losses from another.

You can go with a balanced portfolio that has an equal proportion of each crypto or an unbalanced one. With an unbalanced portfolio, you still diversify, but purchase more of the cryptos that you think will do well.

Dollar Cost Averaging

One strategy is called dollar cost averaging. This involves buying a set amount of crypto at specific intervals when the price is moving down or up. The idea is that you average out all your purchases within the intervals, which are typically months. That lets you get an average price that tends to be better than the one you would have gotten if you bought the crypto in a lump sum.

Don’t Be Afraid to HODL

In the crypto world, HODL refers to holding onto your cryptocurrencies instead of selling them. This is a good strategy when the crypto is not doing as well as you would like. When you HODL a cryptocurrency, you are going with a long-term strategy that lets you weather the market ups and downs to maximize success.

Consider Trading Bots

Trading bots can be an incredibly useful tool for cryptocurrency investing, just as they are with other types of investments. If you are a beginner in the world of crypto investing, look for a trading bot that has been programmed by an expert with experience. If you are an advanced trader, you can program your own bot to follow your trading strategy. The great thing about a bot is that it will be able to trade at any time, including when you are asleep, at your traditional job, or on vacation.


For the best results in your cryptocurrency trading, you will want to use a combination of the above strategies. Remember that because cryptocurrencies are volatile, you should never risk more than you can afford to lose.


Steven King
We’re a new age Broker providing clients access to the Global Financial Markets by using only Crypto Currencies.