Cryptocurrency trading can prove to be one of the most profitable forms of investing if executed correctly. With tons of recommended trading strategies that are being circulated across the internet, people quickly lose sight of what actually needs to be done. It’s one thing to be able to understand a trading strategy, but what separates the successful traders from the rest of the pack is execution of those strategies.

This is not intended as financial investment advice.

This article will touch on key aspects of cryptocurrency trading strategies for beginners and how to apply them to your portfolio.

In this article

Strategy 1: Diversifying Your Portfolio

Anyone who has been involved in investing knows just how crucial this strategy is. Whether its investing in crypto, stocks, or any other kind of asset class, its imperative to trade different kinds of those assets. In fact, one of the biggest mistakes people make when trying to do this is to trade different kinds of cryptocurrencies that are more or less the same type of coin.

Allow us to explain a bit more: Attempting to diversify a portfolio by only trading various top coins isn’t actually diversification of holdings. Instead, you should trade several kinds of coins. From giants like Bitcoin to smaller tokens that you may have never heard of.

A proper diversified portfolio for crypto trading contains a mix coins based on their market capitalization (mcap):

Large: more than $5 billion mcap

Medium: $250 million to $5 billion mcap

Low: less than $250 million mcap

Bundle investing is a great way to reduce risk when trading and diversify your portfolio which will ultimately lead to higher returns over time. Diversifying by investing in different kinds of market cap coins is just one way to reduce risk, but another way to do so is by trading coins in different blockchain sectors. Because blockchain technology is still very young in terms of its overall development and emergence into different industries, it is difficult to accurately predict which sectors will be the most successful and which ones might die out. As such, reduce risk by trading coins in various blockchain sectors like payment, privacy, and utility.

Once you’ve consolidated your portfolio into a good mix of different market cap coins and different blockchain sector coins, the next step is to maintain this variety with different coins. When researching coins, one of the first things to be looking at are the market cap and sector. If you can see that this coin has a good spot in your portfolio and you feel confident in its potential, try switching out some coins to modify what makes up your portfolio, as regularly adjusting your holdings will give you an advantage when trading.

Review: Don’t just invest in coins when diversifying your portfolio, instead invest in different kinds of coins which will make your portfolio consist of differing industries and market caps. Bundle investing is the best way to trade with the lowest risk possible while virtually guaranteeing positive growth for your holdings.

Strategy 2: Performing Technical Analysis

One of the best trading strategies that the most successful traders like to use is performing what is called technical analysis (TA). This is a way for traders to analyze historic price and volume trends to attempt predicting the future price movements of assets like crypto and stocks. Unlike fundamental analysts which attempts to evaluate an asset based on its intrinsic value, TA focuses on price charts and graphs as well as various analytical tools in order to evaluate a coin’s strength or weakness. However, simply reading and looking at multiple price charts is not enough to call yourself a technical analyst by any means. To really perform technical analysis, you have to be aware of key indicators and know exactly what to do when you distinguish them.

To properly use technical analysis for coins, you must first:

Have access to detailed cryptocurrency charts and graphs which you can use to properly assess the coin’s performance visually.

which you can use to properly assess the coin’s performance visually. Take your time when analyzing graphs by exploring different time ranges , observing both short term and long term price movements.

, observing both short term and long term price movements. The best way to pinpoint trends within the chart is to keep it over a one week time frame so that you can ensure the highest accuracy when predicting future movements.

Use your cursor on an interactive graph to hover over specific time periods and get exact prices at specific times.

Another indicator used to perform technical analysis is the trend line. Trend lines are linear patterns of price movements over a longer period of time, indicating the general direction of where a price is heading. The key to using trend lines in TA is keeping the time frame longer than a week, given how volatile cryptocurrency is. Use candlestick graphs to best assess key indicators like trend lines. Candlesticks help to easily identify a token’s price action by comparing the interrelation between the open and close prices as well as the high and low price.

Review: Use technical analysis to get a better understanding of how a coin’s price is moving. Combining these indicators will give you the best pieces of information to accurately perform TA, giving you a much better idea of where a coin’s price is headed.

Strategy 3: Identifying Patterns & Avoiding FOMO

Successful crypto traders who have gained ample experience exchanging currencies like Bitcoin have noticed and recorded several trading signals which can indicate upward movement. In fact, some people solely rely on trading signals to make trades due to their tendency to repeat. One of the more straightforward trading strategies; identifying and acting on price movement patterns, can potentially earn you high returns over a rather shorter time frame.

The best way to execute trades while relying on these signals is to start off by solely analyzing charts. Before you actually use this strategy, you have to monitor the price of certain coins for a while. Once you believe you’ve picked up on some patterns that you have either found, or matched with an existing pattern, observe its subsequent price movements. The key here is to really do your own research and analyze existing trading signals.

These patterns have been analyzed and created using TA, so before you blindly invest in a coin because you see the same shape form on a graph:

Think about what you are expecting to happen

Develop a trading plan and determine when to exit the position

and determine when to exit the position Be as methodical as you can by sticking to your plan no matter what happens

The worst thing you can do is fall into FOMO and lose everything you’ve earned by making a bad decision based on what everyone else is doing

Remember, just as fast as you can make money trading cryptocurrency, you can lose it even faster. With that being said, do not fall into FOMO and stick to the plan you developed before making any trades. In addition to using these trading signals, steering clear of emotional transactions will give you the best chance of reaping the benefits of crypto trading.

Review: Trading using patterns is not as easy as it sounds. Really focus on doing your own research when it comes to picking the right patterns, but once you feel confident in your analysis, make the trade and stick to your plan. Sticking to your plan is the key here, as falling into FOMO and making trades based on your emotions will quickly drain your assets, especially if you trade when coins are at all time high prices.

CoinBundle Trading Platform

Using these strategies you can start with our beta-testing contest!

The idea is quite simple: you’ll have to trade or just HODL the bundles of cryptocurrencies on our platform — you will be able to use your preferred investment strategy. You don’t have to put your own money in our platform. For that, we have created our virtual currency called BetaBucks (Beta$).

During the next 3 months, you’ll be competing with other users for our prize fund. Your main goal is to earn as many virtual BetaBucks as possible. Work your way to the top of our beta-testers list.

💎 More BetaBucks invested in bundles = more real cryptos you’ll receive! 💎

We initially deposited 100,000 Beta$ to each user’s account on https://beta.coinbundle.com to start investing with. Moreover, every day we’ll be depositing another 10,000 Beta$ to your accounts to keep you going. So please check our platform every day for more Beta$, spend your BetaBucks wisely, trade bundles and grow your portfolio as much as possible!

Soon, we’ll deliver even more ways for you to earn tokens and Beta$, so please stay tuned and check out your account on https://beta.coinbundle.com for updates and new opportunities!🔮

Conclusion

You’ve heard these strategies time and time again, and successful investors will lecture about how important it is to diversify your portfolio or analyze charts and graphs. The initial step to take to be a successful crypto trader is figuring out how to do perform a technical analysis. If you put enough effort into it, you might even be lucky and make mountains of money. As long as you know the basics of how to truly diversify your portfolio, perform technical analysis, and determine trading signals, you’ll be on the right path to becoming a crypto trading expert.