So, you are ready to ride the rollercoaster of crypto trading? Whether you are testing the waters for the first time or you already have made your few successful trades and are looking to sharpen your edge, knowing the right trading types is your secret sauce. In this guide, I will serve up seven sizzling types of crypto trading. Each one comes with its own flavor of risk, reward, and excitement.
When I first dove into the world of crypto trading, day trading was where it all began for me since I came from the world of stock market analytics. It’s a simple and easy style of trading where you buy and sell within the same day – no holding onto things overnight. The goal? To cash in on those small price jumps that happen throughout the day. Sounds fun, right? It kinda is! But don’t be fooled – it takes a sharp eye, quick decisions, and, let’s be real, you’ll be glued to your screen most of the time.
When I first jumped into the day trading, I quickly learned that having a pre-planned plan makes all the difference. Here’s the simple guide for the approach I followed:
Step 1: Set Up a Trading Account
First things first, you need a good trading platform, like OKX or ByBit. I went with one that had real-time data, cool charting tools, and low fees – since I started with a low budget this helped me a lot to gain the most from small buys.
Step 2: Select Your Assets
Instead of trying to trade everything under the sun, I focused on a few cryptocurrencies. That way, I could really get a feel for their price movements and trends. Most daily traders choose from one to three coins to trade.
Step 3: Learn to Read Charts
Reading chart patterns became my secret weapon. Understanding candle patterns, support/resistance levels, and other indicators helped me make smarter decisions. Trust me, it works.
Step 4: Execute Trades
Speed is everything in day trading. I set up hotkeys (shortcuts on my keyboard and added bookmarks at the top bar of the browser) to make fast trades, which helped avoid losing out when the market shifted.
Finding the right platform is a total game-changer. Here are a few that really worked for me:
Each platform has its perks, so try a few to see which feels right for you.
If you are trying to decide between swing trading and day trading, here is a quick comparison:
Feature | Day Trading | Swing Trading |
Holding Period | Intra-day | A few days to several weeks |
Risk/Reward | Higher risk but potentially smaller gains | Moderate risk with potential for larger rewards |
Time Commitment | Highly time-intensive | Less time-intensive |
Scalping is like the fast and furious of trading – it’s quick, intense, and all about making fast moves. When I first tried it, I loved the idea of racking up small profits by trading rapidly in super short timeframes, sometimes just seconds or minutes.
Scalping isn’t for the faint-hearted since you will need to be brutal, but if you love the adrenaline, here’s how I tackled it:
Step 1: Choose Your Trading Platform
I picked a trading platform, like ByBit, that has lightning-fast execution and low fees. Every second counts when you are scalping, and delays can eat into those tiny profits.
Step 2: Focus on Liquidity
I chose assets that had high liquidity, meaning I could buy and sell quickly without the price moving too much in between.
Step 3: Use Technical Indicators
I leaned on indicators like moving averages and Bollinger Bands to help me figure out the best entry and exit points for my trades.
Step 4: Execute Rapid Trades
With scalping, being fast is key. I used automated trading tools to make sure my trades were executed fast and accurately.
Scalping is all about being quick and precise. Here are a few strategies I used:
When it came to scalping, these platforms stood out for their speed and efficiency:
Here’s a breakdown of the differences between scalping and day trading, focusing on the holding period, risk/reward profile, and time commitment:
Feature | Scalping | Day Trading |
Holding Period | Seconds to minutes | Minutes to hours |
Risk/Reward | Lower risk per trade | Higher risk per trade |
Time Commitment | Very intensive | Intensive |
Here’s a side-by-side comparison of scalping and swing trading, focusing on the key elements involved in each approach:
Feature | Scalping | Swing Trading |
Holding Period | Seconds to minutes | Days to weeks |
Risk/Reward | Lower risk per trade with small profits | Moderate risk with potential for larger gains |
Time Commitment | Highly demanding | Less intensive |
Range trading quickly became one of my favorite strategies, especially in those quiet markets that were not moving in one clear direction. By focusing on buying when prices hit the lower end (support) and selling when they reached the higher end (resistance), I found that I could make steady profits without too much stress.
Here’s the simple approach I followed to get started with range trading:
Step 1: Identify the Range
First things first, I had to find the support (the floor) and resistance (the ceiling) levels. This involved a bit of technical analysis and checking out chart patterns to see where prices tended to bounce up and down.
Step 2: Set Entry and Exit Points
Once I knew the range, I placed buy orders near the support level (the bottom of the range) and sell orders near the resistance (the top). The goal? To let the price move back and forth between these points.
Step 3: Manage Risk
I always set a stop-loss slightly below the support level. This way, if the price broke out of the range (and went the wrong way), I would not lose too much.
In crypto, markets often go sideways without any clear trend, which makes range trading super handy and safe. But because crypto is also known for its wild swings, I had to be extra careful when I jumped in and out of trades.
Here are a couple of strategies that worked for me:
Here’s how scalping compares to swing trading, a slower-paced but still exciting way to trade:
Feature | Range Trading | Scalping |
Holding Period | Days to weeks | Minutes to hours |
Risk/Reward | Moderate risk with potentially higher rewards | High risk with lower individual rewards |
Time Commitment | Moderate | High |
Swing trading provides a great balance between the hustle and the chill of day trading and the long-term approach of investing. Instead of the constant action of daily trading, I held positions for a few days or even weeks. This gave me the chance to capture bigger price moves without the pressure of making super-fast decisions all day long.
Here’s how I approached swing trading:
Step 1: Analyze Market Trends
I looked at technical analysis, read news to keep an ear to the ground for market positions. My goal was to spot trends or reversals early, so I could ride the wave as long as possible.
Step 2: Set Entry and Exit Points
I aimed to enter trades right as a new trend was starting and then exit before the trend started to lose steam. Timing will be your friend and don’t get greedy, if your inner self says that it’s time to sell then believe yourself and do it. Don’t ask me why I am mentioning this.
Step 3: Manage Trades Over Time
Patience is key in swing trading. I regularly checked my positions and adjusted stop-loss and take-profit levels to protect my gains and minimize losses as the trade unfolded.
Here are two strategies that worked for me:
If you are trying to decide between swing trading and day trading, here is a quick comparison:
Feature | Swing Trading | Day Trading |
Holding Period | A few days to several weeks | Intra-day |
Risk/Reward | Moderate risk with potential for larger rewards | Higher risk but potentially smaller gains |
Time Commitment | Less time-intensive | Highly time-intensive |
Position trading is like the “slow and steady” (just like a dating life when you found the right one) approach to the markets. I loved this strategy because it’s all about taking your time and making big moves with confidence. Instead of trading frequently, I held positions for months or even years, aiming to catch significant price changes based on solid, long-term analysis.
Here’s my simple approach to position trading:
Step 1: Conduct Fundamental Analysis
I looked at the bigger picture, focusing on the long-term potential of the top cryptocurrency I was interested in. I paid attention to things like technological advancements, adoption rates, and crypto trends.
Step 2: Choose the Right Assets
I picked assets with strong fundamentals – basically, the ones I believed had serious growth potential over the long run. Crypto space is very scam-based, and rug pulls happen. That’s why this point is very important.
Step 3: Maintain Discipline
This strategy is all about patience. Even when the market got a bit wild, I stuck to my plan and ignored the short-term ups and downs. No need to stress over every little price change. For example I made a pretty huge investment in XRP, when I bought it it went down almost instantly. Then the waiting game started, and after a few months, I doubled my investment when they won their legal case.
Here are two strategies that worked well for me in position trading:
Here’s a quick look at how position trading compares to swing trading:
Feature | Position Trading | Swing Trading |
Holding Period | Months to years | Days to weeks |
Risk/Reward | Lower risk, potential for significant long-term gains | Moderate risk, moderate to high gains per trade |
Time Commitment | Minimal time commitment | Moderate time commitment |
Investing is like planting a tree – you give it time, care, patience, and eventually, it grows into something much bigger. It’s the approach I have used to build wealth slowly but steadily over the long term. Unlike trading, which can be more about quick wins, investing is all about picking solid assets, diversifying, and holding on for years or even decades.
The big difference between investing and trading is all about the mindset and time frame. Investing is about being patient and trusting in the long-term value of the asset. Instead of jumping in and out for short-term profits like I do in trading. Investing means buying quality cryptos with a huge community like Bitcoin and holding them as they grow over time.
Having a clear strategy is key to surviving and gaining in trading. I have tried a few different types before landing on the ones that really clicked for me:
Day trading is all about taking advantage of short-term price movements. To make money, you'll need strategies like scalping or momentum trading. It also helps to have a good grip on technical analysis, quick decision-making, and solid risk management.
Scalping is a super fast trading style where you make small profits from a lot of trades in a short time frame. It’s intense, requires precision, and is perfect for those who thrive on quick action!
A range in trading is the price movement between a support level (the lowest point) and a resistance level (the highest point). Traders buy at support and sell at resistance, taking advantage of the price bouncing back and forth within this range.
An open position means you’ve entered a trade but haven’t closed it yet. It’s your current exposure to the market until you sell or buy back the asset.
A reverse position is when you open a new trade in the opposite direction of your current position. For example, if you bought an asset and then sold it, you're reversing your position to offset risk.
Closing a position is when you finalize a trade by selling an asset you bought earlier or buying back one you sold short. This locks in your profits (or losses) and wraps up the trade.
