What are the different cryptocurrency trading strategies?

According to Cointelegraph, the inclusion of cryptocurrencies in financial institutions’ portfolios has increased recently. Although they share the same characteristics as traditional assets, they carry a different nature.

According to the publication, the features of cryptocurrency trading include mode of operation, object and trading strategy. Transactions involving these items reveal the type of cryptocurrency trading taking place in the market. An investor-based strategy drives the method of buying and selling digital assets on cryptocurrency exchanges.

Based on the data of the publication, the financial risk associated with cryptocurrency trading can be reduced by using proper trading strategies, which can also save a lot of money. Below are certain cryptocurrency trading strategies that investors should consider:

day trading

It refers to entering and exiting a position on the same day of cryptocurrency trading hours. Also known as intraday trading, its motive is to profit from tiny movements in the market. Trading strategies through technical analysis are time consuming, risky and mostly used by advanced traders.

Trading cryptocurrency futures

This strategy refers to a contractual agreement between two parties to buy and sell a specific amount of an underlying cryptocurrency at a predetermined time on a predetermined date. It gives investors access to a range of cryptocurrencies without having to own any of them.

arbitrage trading

Traders believe in arbitrage strategies to make profits from cryptocurrency trading strategies. Arbitrage refers to buying cryptocurrencies in one market and selling them in another. Traders can make profits due to the difference in liquidity and trading volume.

HODL (buy and hold)

HODLing is an investment strategy whereby people buy cryptocurrencies and hold them indefinitely, allowing investors to benefit from long-term appreciation. Investors can benefit from this as cryptocurrencies are not subject to short-term volatility and the risk of selling low while buying high can be avoided.


Traders using this method exploit market loopholes to make profits. Scalpers explore historical trends and volume levels before deciding on entry and exit points within a day as they prefer highly liquid markets.

range trading

It refers to an active investment approach in which the investor sets a price range for buying or selling cryptocurrencies over a short period of time.

(With insights from Cointelegraph)

Also Read: What Are the Pros and Cons of Buying NFTs in 2022?

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