The cryptocurrency market has proven to be one of the fastest growing markets from the pandemic to date.
Every day more people decide to join this market by opening an account in an exchange –exchange– or in a virtual wallet. Read more in cryptocurrency news.
Now, to enter the world of cryptocurrencies it is important to understand what trading is and what the different investment techniques that exist within trading are.
According to BeInCrypto, the cryptocurrency market has several similarities to traditional financial markets.
Basic Trading, Range Trading
The basic trading technique consists of selling and buying cryptocurrencies depending on the rises and falls in the value of the crypto market assets.
“When the value of the assets goes up, it is generally recommended to sell, and when the value of the assets goes down, it is recommended to buy,” highlights BeInCrypto.
In this sense, it is necessary to carefully analyze the value of the cryptocurrencies that are in the portfolio to see if it is convenient to go out and sell, likewise, it is prudent to analyze the quotes or prices of the cryptocurrencies to see if it is convenient to go out and buy.
Market prices often move horizontally, which means there may be limited opportunities to enter a market.
BeInCrypto explains that the range trading technique capitalizes on the fact that markets fluctuate within a range during these sideways trends, defined by a resistance band and a support band.
In this context, the technique of range trading takes advantage of non-trending markets by identifying consistent high and low prices, known as support and resistance bands.
The idea of trading within a tight range can be applied to a variety of markets, including forex, stocks, and cryptos, allowing the trader to buy and sell when an asset is oversold or overbought.
In the indicators section of Valora Analitik the investor can follow the behavior of cryptocurrencies in real-time.
Scalping and Swing Compared
Scalping is a short-term intraday trading strategy that aims to profit from small price movements.
The idea is that the accumulation of small but frequent profits will generate a substantial return at the end of the trading day.
The level of return on each investment is relatively low but sustainable as it continues to return over a long period of time.
Forex or crypto traders use this strategy through quick response to market movements.
Unlike holding a position for a few hours, days, or weeks, a scalper tends to react within minutes and sometimes even seconds.
Consistency and speed are the main factors that determine the results.
When comparing the scalping strategy to day trading or the swing technique, the scalping technique involves relatively low risks and provides instant returns.
Now, it is worth clarifying that the results depend largely on the perseverance, self-discipline, and large amounts of capital of the investor to obtain substantial success.
In any case, it is always a good idea to do your own research before making important investment decisions. For example, if you decide to invest in cryptocurrencies, you could consider the efforts of Valora Analitik and BeInCrypto.com, who signed an alliance to bring information of interest to the Latin American public interested in learning more about crypto assets, technologies such as Blockchain, and NFT, the trend of this sector that grows in the market.
By Audy Castaneda
