How to Choose Your Perfect Trading Niche? – Superorder.io
Disclaimer: the information in this article is provided for educational purposes only. Crypto markets are volatile and are fraught with high risks. Please, trade only when you fully realize potential consequences and never invest more than you can afford to lose.
Let’s start with a question. How many deals do you make per day? HODLers, probably, will say zero. Scalpers will mention hundreds of orders. But there are a lot of market players who don’t have an answer. They trade occasionally, without a clear vision of the plan and/or objectives. Freshmen often start actively and reach overtrading levels where each next deal becomes more and more harmful. Obviously, they burn up everything and stop.
There are a few well-known established trading niches, particularly, in the crypto sphere. To avoid inconsistent (not to say unconscious) trading, you should find your own way. And we’re going to help you in defining it.
Well, it’s necessary to know possible strategies to choose the best one. Below, we list the most popular approaches to crypto trading that may be profitable even for newcomers. Sure, some models require more knowledge and effort but you still can master them:
- Scalping. Extremely quick deals with seconds between open and close orders. Scalping is highly resource-consuming, note this.
- Swing trading. Focuses on timely Take Profit and Stop Loss orders located in local peaks and pits. There are minutes to hours between deals.
- Day trading. This one stands for an active but less dynamic approach. It requires closing all deals during one day and placing new orders the next one.
- Trend trading. Covers deals based on one ongoing trend. It’s similar to swing trading but on a larger scale. This model also includes range, breakout, and reversal trading.
- HODLing. The simplest approach that requires a lot of persistence. HODLers just purchase coins and believe in price growth.
But how to find the most suitable option? Let’s find out.
Firstly, we should clarify that there are numerous factors that are barely possible to cover in one article. It all depends on each trader’s personality. Some people just don’t want to learn how crypto exchanges work. Others are frightened with price jumps. Newcomers have amazing energy but no skills while profs know a lot but are often biased.
Thus, we want to talk about five key points. Move through them to define the main trading approach, rethink your current strategies or diversify actions. We will put one question at the end of each paragraph for extra help.
1. Effort
Professional trading is a real job but without fixed working hours or stable profits. To become a real expert, you have to spend days and nights studying markets, making deals, earning, and losing money. The thing is that you can get profits without becoming an expert. Depending on the resources you’re ready to spend, there are several options.
Say, if you don’t have other tasks to do and can make crypto trading your main business, consider becoming a professional analyst or a day trader. However, if you trade occasionally and have a more traditional job, it’s a good idea to stick to trend trading or even get top coins and HODL them.
Question #1: how much time can you devote to trading?
2. Skill
The next point is a bit trickier. Generally, all people can reach a certain level in any industry, including cryptocurrency. Newcomers should study technical analysis and learn how to recognize chart patterns, follow the news, and focus on the real value of blockchains. But why not to get benefits out of your own personality?
Look, if you’re good at math and calculations, don’t suffer from visual chaos on charts. Instead, analyze tables to make your predictions and put orders. Similarly, if you have a strong intuition, don’t mess around with patterns too much. Know these tools but also listen to your heart. It’s all about your way, remember?
Question #2: what do you know about crypto trading?
3. Risk
Nobody wants to risk too much and lose investments eventually. On the other hand, they want to make huge profits in the blink of an eye. Isn’t it paradoxical? Well, it is. The catch is in the market’s nature: you should always balance between acceptable risks with sufficient prizes and too high danger. For this, you may be interested in risk management strategies. They allow mitigating risks even during intensive trading.
Question #3: risky deals with high profits or safe harbor?
4. Results
This factor is strongly bounded with the previous one. Generally, the highest-paid deals are the riskiest ones. Scalpers and swing traders always have to put orders just on time to get the best results while long-term investors are free to spend some time on extra due diligence. As a rule, HODLing is suitable for users with other sources of income. But if you want to earn with trading only, return to the first point.
Question #4: are you ready to wait for the outcome?
5. Access
Finally, you should choose trading pairs, e.g. BTC/USDT or BTC/ETH or even ETH/XRP, and so on. Each pair has its own features. For example, major coins like Bitcoin and Ethereum come with lower volatility while recently-listed tokens may show 100% dynamics within a day. Exact pairs depend on your effort and risk preferences.
Also, don’t forget that we still live in a centralized world. Governments can block exchanges and ban crypto projects. That’s why you want to choose the trading platform or platforms available in your country. The less potential issues with governments and banks you have the lower your non-market risks are.
Question #5: which exchanges and coin pairs you can use?
After answering all five questions, you will get a viable plan. Be sure to stick to it, avoid emotions, and control your fear/greed ratio in the best state to maximize profits. Okay, that was a traditional approach.
But we have something more innovative. There’s one trick to be an active trader and don’t spend whole days with the laptop. We talk about crypto trading terminals and, particularly, Superorder. This platform supports custom strategies in which you can combine different orders and run them automatically on the connected exchanges. Means, the software will trade on your behalf.
Soon, we will also add even more automated tools — bots based on predefined strategies. With them, you won’t need to learn how the builder works. Stay tuned!
Published at Sat, 06 Jul 2019 15:47:41 +0000
