Is Trading Crypto Profitable: What Are Profitable Crypto Trading Strategies? - FinanceFeeds (2024)

• DeFi Insider

• ByFinanceFeeds Editorial Team
• November 1, 2022
• November 1, 2022

Even though there are numerous ways available to go about your trading, the unpredictability of the digital currency and its market, make it that much more complicated to choose the right strategy. However, knowledge is power, so the more you know, the better your chances at acquiring higher returns and profits through your investments.

We’ve gathered what we think are the most profitable crypto trading strategies that you should definitely consider to up your crypto trading experience.

Scalping

Scalping is a fast-paced crypto trading strategy that depends on low rises in price movements for a potential profit from traders. The focus is put on small gains from price changes and short-term trading that needs to be repeated over and over again. Scalping works best for traders who are looking to establish a quick, daily strategy to make profit despite the volatility of cryptocurrencies.

DCA (Dollar Cost Averaging)

DCA has been a popular crypto trading strategy for both beginners and expert traders, because it doesn’t rely on indicators. It instead focuses on dividing your assets into smaller amounts for your investments, with the aim to alleviate the impact of market volatility and up your chances of making more than what you initially put in.

RSI (Relative Strength Index)

Relative Strength Index is a momentum indicator that calculates whether or not the price of a certain crypto asset is overbought or oversold, based on previous price fluctuations. It is calculated using a specific formula that can help you determine the market trends, and therefore when to engage your entry or exit.

News-based trading

As with everything nowadays, the buzz of media outlets can have a tremendous impact, even on the cryptocurrency markets. Depending on the global news coverage, you may see dramatic fluctuations in the prices of your cryptos, and with experience, you will learn to act accordingly on when and if you should go short or long on your investments.

All in all, one thing is clear: having a strategy before you begin your crypto trading is essential! Now, the kind of strategy you decide to commit to is simply a personal choice, depending on your financial goals, type of investment and based on the quantity of the profits you want to be making over a short or long period of time.

Risk Warning: Cryptocurrencies are highly volatile and trading can result in the loss of your invested funds. Before investing you should be aware that cryptocurrencies may not be suitable for all investors. You should therefore carefully consider whether trading or holding digital assets is suitable for you in light of your financial condition and not invest money that you cannot afford to lose.