What's the Best Crypto Trading Strategy For Where You Are in Your Trading Journey?



Nov 5, 2021


There’s no doubt, cryptocurrency trading has become one of the top choices for most traders, this is largely because of its volatility, as this brings the significant potential to make high returns. In this blog, we look at the best trading strategy for where you are in your trading journey. 


The Best Trading Strategy For Beginners

Cryptocurrency trading involves significant risks and losses that can often exceed deposits, that’s why it is extremely important that you know what you are doing before you start diving into the more complex trading strategies and executing trades.

Position trading

Position trading often referred to as HODL’ing, is a trading strategy where a trader will purchase an asset, like Bitcoin, and hold it for an extended period of time without selling it. The goal in this form of trading is to buy low and then sell at a higher price in the future. This type of trading strategy is the most commonly used trading strategy as a trader does not need a lot of trading experience to do it.

HODL’ing (Hold On for Dear Life) is a term used by crypto traders, which refers to buying a digital asset and then not selling it, even during strong market volatility and poor market performance. 

Dollar cost averaging (DCA)

Dollar cost averaging is also a great trading strategy for beginners. The concept is really simple and easy to understand. Instead of using all of your money (at once) and investing it into a particular digital asset, like Bitcoin, you divide it into smaller amounts and make smaller purchases at different periods of time. This way, you would have purchased smaller amounts at different price points.

Example: X has $10,000 he wants to invest in Bitcoin. Instead of using the full amount in one trade, he divides his capital into lots of $1,000. He then chooses to buy Bitcoin on the 15th day of each month at 10am local time.

Traders choose to buy at regular intervals so they can take advantage of different price points in the market. Using the DCA method reduces the impact of volatility, this means that on average, a trader will likely get more Bitcoin for their money than if they had spent their full amount at one point.

More Advanced Traders

Margin/Leverage trading

Margin or leverage trading allows traders to borrow capital to gain access to larger buying power, enabling traders to leverage their positions. This method allows traders to open much larger positions than they otherwise could with their own money. Margin trading is considered a high-risk investment strategy and is only recommended for experienced traders because although leverage has the potential to enlarge your profits it can also enlarge your losses by the same magnitude.

If you’re interested in learning more about margin trading take a look at our margin trading guide.

Irrespective of which strategy you choose, you should never risk more money than you are willing to lose as the cryptocurrency market is extremely volatile.


This is not financial advice.

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Always remember: Crypto trading is extremely risky due to the volatile nature of cryptocurrencies, you should never risk more than you are willing to lose


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