Detailed Explanation Of The Short Term Cryptocurrency Trading Methods
Before you start to trade cryptocurrencies understand the different ways in which you can participate in the cryptocurrency market. These trading styles are for short-term as well as long-term traders and you need to choose your style based on what you are comfortable with.
Scalping is for quick entry and exit trades in the market. The main aim of the scalpers is to make profits even if the profit amount is very small. Scalpers take trades and close the positions sometimes within a minute.
Scalping method needs you to be very focused, but if you know the trick then you can also make good money scalping. The scalpers know how to manage risks and have the required skill.
Day trading is very much like scalping, check the source, but here the trades are not squared off so quickly. The trade can be kept open through the whole day. You use stop loss on each trade and you aim for a little extra profit on the trades. The position, however, has to be squared off before the trading day ends. This, however, does not happen in the cryptocurrency market because the market is open 24/7. Thus the trader sets himself a deadline when he calls it a day.
The day traders will see the trend of the cryptocurrency and then take trades based on the trend.
Cryptocurrency traders may trade in a range. This range is formed when the prices are consolidating which usually happens in the accumulation or the distribution phase.
The range trader will trade the range. Like they enter long at the bottom of the range and place a stop loss below it, the short at the top of the range and place a stop loss above it. The trading method is like a day trade but here the trader does not look for the trend of the crypto currency. All that he is focused on is finding a market that is ranging and he focuses to trade only the range.
The above methods of trading are generally suited to those traders who have a lot of emotional control and can take a trading decision faster. One does not have a lot of time to think before executing the trades in the case of short-term trading. Thus it is important that a trader takes quick trading decisions.
Sometimes the trade gets formed during the course of the day and thus it is all about quick decision making. Short term trades are suited for those who have some years of experience in trading.