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3 styles for trading in the crypto markets - Cryptocurrency trading

3 styles for trading in the crypto markets - Cryptocurrency trading

Last updated 11th Aug 2022
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Trading in cryptocurrency markets is an activity that is becoming more and more popular. The reason is obvious: there is a real opportunity to generate consistent monthly returns in the market for traders that are skilled enough. Now, there are multiple ways to approach trading in the market, and in this article we’re going to take a look at some of the more popular approaches. 

Long-term trader

This style of trading is very self-explanatory. Long-term traders are individuals that are looking to buy and hold crypto for the long term (i.e. multiple years). In doing so, long-term traders will often look at the fundamentals of a cryptocurrency to guide them in making their trading decisions. There are quite a few things that long-term traders will look at when determining whether to hold a digital asset for the long term – here are just a few of them:

  • The quality of the development team;
  • The dollar value of the industry the cryptocurrency is disrupting; and
  • The partnerships formed by the team.

As mentioned, long-term traders have a rather long investment time horizon, thus, they will typically not be concerned about the daily price movements of their holdings. If you like to check the prices of your holdings on a daily basis then this style might not be for you. 

Medium-term trader

This trading style is a nice middle road that many individuals usually fall under. Medium-term traders will use both fundamentals and technical analysis when making their trading decisions. This will often involve using technical analysis tools such as chart patterns and momentum and trend analysis to guide trades. The weekly timeframe will be the timeframe of choice for many medium-term traders, who will look to use their analysis to identify trading opportunities. Included in this toolkit will often be trading tools such as bots and signals (e.g. free crypto signals).

Short-term trader

If neither of the two trading styles haven’t felt like the right fit, then the short-term trading style is probably what you are looking for. Short-term traders will not care about fundamentals, what’s more important for the short-term trader is the daily price movement of the market. As a result, short-term traders will heavily rely on technical analysis to guide their trades. Some traders will also often use leverage (e.g. 15x – 100x) to maximize their returns. However, the short-term trading style does require a lot of time commitment. Trading opportunities in the market come and go, so short-term traders will need to be looking at the charts frequently to spot opportunities. 

Conclusion

As we’ve seen, there are a number of trading styles to approach the crypto market. It’s important to pick a trading style that works and consistently generates returns for you. However, trading requires that individuals constantly learn and change their approach based on what’s working in the market and what isn’t.

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