Outperform Crypto Trading Strategies
Which Cryptocurrency Strategy is Best for You?
This article will highlight some of the more popular short-term cryptocurrency trading strategies that offer attractive upside potential and discuss the difficulties associated with each method. At On-Chain Index (OCI), we believe everyone needs to understand all investment strategies to and that OCI's indexed investment approach can possibly provide a stable and secure investment stream that will rid the complexities and pitfalls of short-term trading.
Buy the News Sell the Rumor
A news trading strategy makes the decision on which cryptocurrency to invest in relatively straightforward, as it involves trading based on news and market expectations before and after news releases. With news traveling quickly, this takes a very speculative and reactionary plan to execute. Immediate assessment of the information after it's released and quick judgment on how to trade it is crucial to success. Some key considerations include:
How weighted is the price action based on the news?
Did the news match market expectations?
Are you able to keep up with news coverage over many time zones?
How does the news impact positions?
News traders must understand how specific announcements affect their investments and the broader financial market. Additionally, a crypto trader needs to keep the market perspective in mind and not read the news purely subjectively.
Swing Trading
Trading the gains and losses of the crypto markets is "swing trading." Top crypto investors that swing trade aim to buy the best crypto funds when they suspect the market will show gains. Conversely, they will sell the same funds when they suspect a dip in price action. Traders essentially oscillate between a crypto selling strategy and a crypto buying strategy predominantly based on technical analysis (classical charting, on-chain analytics, etc.) from the best crypto investors to follow. These indicators will aid investors in making a call to a more significant trend. To be a successful swing trader, a crypto exit strategy and a crypto profit-taking strategy should be defined by critical levels of resistance and support. Increases/decreases in momentum, supply, and demand must also be respected while keeping a high frequency of monitoring the markets. One major drawback of swing trading is the immense amount of research required to understand the wide variety of indicators and on-chain data.
Crypto Day Trading Strategies
Day trading is a very active and involved form of trading that is especially difficult within the crypto markets as there is no open or close to the trading day. Day trading cryptocurrencies is usually reserved for full-time professionals. This is partly because a day trader must keep regular work hours to monitor the broader cryptocurrency market. Simply put, day trading is not one of the best crypto trading strategies for a part-time investor. A couple of the significant drawbacks include:
It requires a solid mental game that only the most seasoned and disciplined investors have. Resisting deviation from initial plans is not easy in a short trading game.
The opportunity to earn gains in the crypto markets does not always present itself during a flat trading day.
Trading the Trend
Trend trading uses technical analysis to define a trend, and traders make decisions based on the direction of the overall crypto market trend to enter trades. There is no concern in regards to whether a bull or bear market is in play or which cryptocurrency to invest in now. Ultimately, traders attempt to identify a pattern and extract value from it. Concerns of quick market reversals and choppy market conditions can make trend trading difficult even with robust technical analysis. However, the most considerable difficulty can be recognizing an actual trend reversal, especially if you have been involved in trades running in one trend causing a “trend bias."
Crypto HODL Strategy
At OCI, we feel "holding" is the best crypto trading strategy, as it omits the short-term trading component and allows the benefits of a longer time horizon to cancel out the crypto market noise to accumulate wealth. OCI is a blockchain native cryptocurrency investment fund. This means every transaction is fully documented, auditable, and immutable on the public ledger. OCI is a crypto investment company that offers a whole service experience that consists of:
A tenured lead crypto fund manager who has been involved in crypto since its inception
A seasoned development team that has successfully started and managed tech businesses in Silicon Valley
A Research team that is directly involved in dozens of Decentralized Autonomous Organizations (Dao's) that produce real-time alpha and long-term forecasting to determine which crypto to invest in now
OCI is a superior choice among cryptocurrency investment companies due to our ability to continually seek alpha in a fast-paced sector and embrace a culture of fully immersed blockchain industry devotees.
