Which Crypto Trading Strategy is Right for You?

Which Crypto Trading Strategy is Right for You?

Are you a cryptocurrency trader, or a prospective trader, who is in search of the right strategy for maximizing profits and minimizing losses in one of the most volatile, exciting investing categories? If that's the case, there's good news, because newcomers and experienced crypto pros have at least five different ways to approach the altcoin investing markets. In many ways, your choices are similar to what you'd face if you were buying and selling shares of the corporate stock.

The traditional buy and hold strategy are a favorite of many newcomers as well as experienced crypto hands. Additionally, investors of all skill levels can take advantage of using CFDs (contracts for difference), the mainstream cryptocurrency exchanges, and staking techniques. Review the following five methods for getting into the exciting world of crypto buying and selling.

Buy and Hold


For those who have a long-term investment horizon, buying and holding alt currency is the way to go. Plus, the method is simple and direct. You begin by purchasing currencies either from an online exchange, a financial institution, or a special ATM. Then, you decide whether to hold the assets in an offline (cold) or online (hot) digital wallet. Buy and hold investors expect the price of cryptocurrencies to rise, and many of these speculators plan to hold their portfolios for many years before selling for a possible profit.

CFDs (Contracts for Difference)


CFDs represent a safe, simple way to buy and sell alt coins for anyone who would rather avoid the potential risks of storing assets on exchanges and facing the prospect that a particular exchange could be hacked or compromised. For example, using trading apps such as easyMarkets, anyone can use CFDs as a direct way to take part in the crypto market's ups and downs, all without having to own the currencies themselves. That's because when you buy a CFD, you're essentially making a prediction about the next price move, up or down, so there's no need to acquire or hold any alt coins at all.

Exchanges


There are dozens of reputable exchanges where you can buy and sell bitcoin, ethereum, litecoin, dogecoin, Cardano, and other cryptos, in the hopes of making a short-term or long-term profit. The downside of exchanges is that there are fees and they are susceptible to hacking. However, many people like the fact that they can easily assemble a diverse portfolio of alt coins and speculate on price moves.

Staking


Staking is a rather new way of earning a profit, or sustaining a loss, on alt coins. In some cases, you can directly purchase a coin from the sponsoring website, add it to a digital wallet, and leave the assets in an online account. While it's in the account, just like cash in a bank, it earns interest. Some coins offer rates as high as 50 percent annually, but with those higher-than-normal returns comes great risk.

Scalping


A few brave individuals open exchange accounts for the sole purpose of scalping, or making large, short-term transactions to make a profit on small price moves. It's basically the same strategy used by stock market scalpers but with the added risk that comes with dealing in the crypto-coin markets.

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