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Top 3 Best Crypto Trading Strategies for New Investors and Traders

Top 3 Best Crypto Trading Strategies for New Investors and Traders

 

 

Investing in cryptocurrency markets is a high-risk, high-return venture. So, you should have a foolproof plan before investing money. Until and unless you have a clear plan with a set of strategies, investing in a highly volatile crypto market is nothing short of hara-kiri (ritual suicide by the Japanese samurai).

 

With the high fluctuation in Bitcoin price and all cryptocurrency prices (where a 10% swing on a daily basis is considered normal), you should choose strategies judiciously. Your right move will not only increase your investment exponentially but also avoid any kind of loss to your invested capital.

 

If you are new to crypto trade and investing, you should start with time-tested and proven cryptocurrency trading strategies. In this article, I’ll walk you through 3 proven crypto trading strategies that are particularly best for beginners.

 

Strategy #1: Dollar Cost Averaging (DCA) Strategy

 

This is a time-tested trading strategy that is praised by the American business magnate and investor Warren Buffet. Known as the “Oracle of Omaha”, Buffet has expressed his optimism towards this strategy for the volatile markets, particularly for the stock market indices.

 

As Bitcoin and the cryptocurrency market as a whole is a highly volatile market (where 10% daily price fluctuation is considered normal), the DCA strategy has proven efficient for Bitcoin too in the last several years. It has been seen that this strategy works best when it is continued over a longer period of time.

 

What’s so special about the Dollar Cost Averaging Strategy?

As per the strategy, you don’t invest your fiat currency all at once in a particular cryptocurrency (say, Bitcoin). You have to divide your investment into smaller amounts and invest them over regular intervals (say, daily/weekly/ bi-weekly/monthly) for a longer period of time (say, 5 years/ 10-years/ 20-years / 30-years).

 

Example of Dollar-Cost Averaging (DCA) Method of Investing

 

Let me explain it with the help of an example.

 

Suppose, you have US$10,000 with you, which you want to invest in Bitcoin (BTC). If you invest that amount of money in one go, it’ll be subjected to a lot of speculative risks. In fact, just after investing US$10,000, the market could plunge and your investment could get eroded.

 

To avoid such a high-risk, speculative move, you can divide your US$10,000 investment into 20 lots of US$500. Now, invest each lot of US$500 on a particular day of the week (say, Wednesday) to buy Bitcoin at a particular time (say, 9 am local time). You have to continue this habit of investing US$500 every week on Wednesday at 9 am for 20 weeks continuously.

 

The best thing about Dollar Cost Averaging method is that it reduces the impact of market volatility. As it averages out the risk associated with the price fluctuation, you’ll actually get more Bitcoin with the DCA method than investing all of the money in one go.

 

Another important thing why Dollar Cost Averaging method is so good for Bitcoin investing is that you can fully automate the investing process with the help of automated crypto trading bots such as NapBots.com, 3Commas, CryptoHopper, Coinrule, or others.

 

You can do this by selecting the DCA method of investing, deposit funds, and let the bot trade on your behalf. In case, you want to trade manually, you can improve your ROI by buying at the set intervals when the price is lower than it was 24-hours back.

 

Strategy #2: Golden Cross or Death Cross

 

This trading strategy uses two moving averages (MAs). Moving average is a chart indicator line, which shows an asset’s average price over a certain period of time (say, last 50 days, 200 days, and so on).

To utilize the Golden Cross or Death Cross successfully, you have to check the daily and weekly charts to find crossovers between the 50-day moving average and 200-day moving average over long chart time frames. While 50-day MA is the average price of Bitcoin in the previous 50-days, 200-day MA is the average price of Bitcoin in the previous 200-days.

Golden Cross or Death Cross crypto trading strategy is a successful long-term trading strategy that works wonders over a comparatively longer period of time, which is more than 18-months.

Whether you’ll use Golden Cross or Death Cross startegy will depend upon the types of crossovers you are looking for.

  1. You should use the Golden Cross crypto trading strategy when there is a convergence. It’ll take place when the 50-day moving average crosses above the 200-day moving average.

When convergence takes place, it signals that the short-term momentum will exceed long term momentum. This indicates a buy signal.

  1. You should use the Death Cross crypto trading strategy when there is a divergence. It’ll take place when the 50-day moving average crosses below the 200-day moving average.

When divergence takes place, it signals that large number of traders will exit the market by selling Bitcoin. A death cross indicates a sell signal.

While using this strategy, always keep in mind that it is successful in a highly volatile market. However, in a market when the price moves sideways, it may give you mixed signals by provoviding you with too many buy and sell signals.

 

Strategy #3: RSI Divergence

 

Relative Strength Index or RSI measures momentum of a digital asset through the calculation of the average number of gains as well as losses over a period of 14-days. The RSI indicator line moves within 0 and 100. It essentially shows whether a crypto, say, Bitcoin, is “overbought” or “oversold”. To show this, a channel between 30 and 70 is used most commonly.

 

  • If the indicator line breaks above this channel above 70, it means that Bitcoin is “overbought”. This also suggests that the price will come down.

 

  • If the indicator line breaks through bottom of this channel below 30, it means that Bitcoin is “oversold”. This suggests that the price will rise again.

 

RSI divergence trading strategy is mostly used for timing trend reversals. It helps traders to gauge when the price of Bitcoin or other assets will start moving in the opposite direction, either from a downtrend to an upward one or the other way round. You can best find the RSI divergence trend on the daily window or 4-hour window.

 

Buy Cryptocurrencies, Stocks, and Gold Now

 

If you are ready to invest in stocks and cryptos or buy Bitcoins through online brokerage accounts of centralized or decentralized cryptocurrency exchanges, you can do so in a legit way by investing through stock investing and cryptocurrency apps. You have to open an account with such an exchange or online broker (including trading apps and invest apps such as TD Ameritrade). Then verify your details (including basic personal information) and fund your stock or cryptocurrency trading account.

 

The best thing about Bitcoin and crypto market is that the transactions are done without the involvement of banking entities. This is one of the reasons why more and more investors (including corporates, venture capitals, and institutional investors) are heavily investing in cryptos.

 

You can start depositing funds to your stock or crypto exchange account to buy company shares or cryptocurrencies. This can be done by simply connecting your online banking account (savings accounts, checking accounts, or other account types). Besides transferring fiat currency money online through bank transfer, you can make payments with other payment methods including credit cards, debit cards, and others.

 

If you need further assistance, you may consider taking help from the vibrant and helpful trading communities. You can trade cryptos with credit cards (business credit cards, personal ones, or citi custom cash cards), debit cards, or other payment options through reliable crypto trading web platforms.

 

You can also check the savings calculator to know how much you should save on a weekly, monthly, or yearly basis. Check the financial news to know more about the prospects of various assets so that you can build long term wealth.

 

In case you are bullish on the future prospects of gold, stock and ETF trading, crypto market, Bitcoin BTC, Ethereum ETH, Bitcoin Cash BCH, Litecoin LTC, Ethereum Classic ETC, Bitcoin SV, Wrap Bitcoin, and other altcoins, you can start investing in stocks, gold, Bitcoin, and other altcoins with USD. Once bought, transfer them to:

  • hot wallets (including mobile app wallets and software crypto wallets) or
  • cold wallets (including most secure hardware wallets)

 

Hold them for a longer time period to let the Bitcoin BTC price increase. Keep your cryptocurrencies safe with:

  • Ledger Nano S
  • Trezor One
  • Other Ledger and Trezor models

 

Crypto market investing will provide you a higher return in the long run. The ROI from crypto investment is much more than investing in:

  • Stocks
  • Mutual funds
  • Index funds
  • Real estates
  • Yield savings accounts
  • Real estate investment trusts
  • Fiat currency trading (forex trading)
  • CD rates
  • Trade Options
  • Money saving in savings accounts
  • money market returns
  • Exchange traded funds
  • IRA accounts (including Bitcoin IRA), and others.

 

In fact, many retirement funds or IRA accounts such as Roth IRAs are allowing digital currency investors to purchase XRP, Bitcoin, Chainlink, and other digital assets. These retirement funds are increasing investor choice by allowing them to invest a small percentage of their money in cryptocurrencies. This is, in turn, increasing the prospects of these funds to provide their investors to get higher returns. If you are thinking about building wealth, you should include cryptos in your portfolio like other crypto investors.

 

Therefore, it can be concluded that holding Bitcoin Ethereum and other cryptos can help you to build real wealth and multiply your net worth. You can learn investing basics to buy crypto currency and other digital assets to make more gains. Start going through Wall Street Journal and other investing magazines on cryptos to learn more about investing in crypto market and make better financial decisions. Learn about valuation calculation to true bitcoin value and assess the overpriced or underpriced situations instantly.

 

As a beginners guide, you may also check out the trading basics provided by various cryptocurrency exchanges such as Coinbase, Binance, Kraken, and other crypto APIs. There are many brokers suitable for beginners as well. So, read reviews of customers before joining a crypto exchange. There are many brokers for beginners in the USA through which you can trade and invest extra cash and investible fund in fractional shares and stocks funds.

 

You should definitely learn about:

  • Trading for beginners (Step By Step guide)
  • Types of stocks including penny stocks, value stocks, growth stocks, blue-chip stocks, etc.
  • Gold standard
  • Futures contract
  • Gold miner, gold mining company, and gold mining stocks
  • Bad debt and bad credit
  • Home equity
  • Employment tax records and receipts
  • Periods of limitations
  • How credit score is determined?
  • World gold council
  • How is the price of gold and other precious metals determined?
  • How to rent out your car to make money
  • Significance of owning gold
  • Stock plans
  • Fixed income assets
  • Stocks and Funds
  • Spot price and futures price of gold
  • Write an eBook to start making money
  • Use spare time and personal internet connection to earn extra cash through part-time graphic design
  • Asset allocation
  • Investment gold
  • Different ways of buying and selling golds
  • How to make money from Google adsense?
  • Gold stocks
  • Utilizing market news for profit
  • Significance of Dow Jones in the stock market
  • How to increase your disposable income through balance transfers credit cards?
  • Different trade ideas
  • Warren Buffet’s investing styles
  • Passive investors
  • Different investment goals
  • Teaching as a private tutor in your free time
  • Cash Management
  • Investing for beginners
  • How to choose brokerage firms and stock exchanges?
  • Gold markets
  • Trading strategies for beginners to time your entry and exit
  • Using price actions to one’s advantages
  • Teach english to earn lot of money online and start saving
  • Browsing websites can also help you earn little extra cash
  • Margin Requirement
  • Margin Call
  • Margin Account
  • Day Trading Margin
  • Trend Trading
  • Market Maker
  • Options trades
  • Fundamental Analysis
  • Short Sell
  • Market Research
  • Success Rates Of Day Trades
  • Trading Vs Investing
  • Swing Trading
  • Time Frames Of Trading
  • Successful Ways Of Buying Stocks And Cryptos Throughout The Day
  • Risk Management
  • Financial Industry Regulatory Authority
  • Trade On Margin,
  • Foreign Exchange Trade
  • Pattern Day Traders
  • Day trading rules
  • Active trading
  • Secrets of a successful day trader
  • Stock price actions
  • How to pay off debt quickly
  • Planning for retirement
  • IRA guide and fruitful ways of increasing returns of individual retirement accounts
  • Stock price determinants
  • Charles Schwab’s modern approach to investing and retirement
  • Day Trading Tools, trading software, and different financial tools.

 

Defi tokens and NFTs (Non Fungible Tokens) are the next generations of crypto coins. These decentralized coins have started to become very popular among active traders who trade cryptocurrency. You can buy sell them through crypto trading platforms too.

 

Whether you buy Ethereum ETH or buy Dogecoin, you should also invest in:

  • Chainlink LINK
  • Litecoin LTC
  • Binance Coin
  • Cardano ADA
  • Polkadot DOT
  • Dogecoin DOGE, and
  • Trade Litecoin LTC for better diversification of coins

 

To diversify your portfolio, you may also buy stocks through stock brokers for beginners and pro.

 

Get better guidance on improving your personal finance, retirement planning, management of cash flows or capital gains, and investment ideas from financial advisors, investment managers, and wealth managers, especially the ones who are not averse to cryptocurrencies such as Bitcoin and others.

 

While day trading, you should always try to invest only that much money which you can afford to lose. When you do margin trading, be very careful. Financial protection must be there in your mind always while you make cryptocurrency trades. That’s why having a secure financial plan is so important.

 

Invest money in stocks, gold, and other cryptocurrencies through centralized or decentralized exchanges and reliable online brokers.

 

Choose NapBots to Increase ROI

 

Trading Robots (such as NapBots.com) automatically scans the market in real-time and trades for you. They run 24/7, which means that you can keep earning your passive income even when you are sleeping. This gives you an edge over other investors as it enables the bot to book profits on your behalf when other investors are sleeping.

 

Smart crypto investors always remain prepared to get the best of a big market move. They don’t wake up suddenly. To remain alert round the clock, they use cryptocurrency trading bots so that they don’t miss any big market movement.

 

NapBots.com is a Trading Bot, cloud-based platform, on which you can connect to major exchanges such as Binance, Bitmex, Bitfinex, OKEX, Kraken, Bitstamp, and Bitpanda.

 

The best thing about the Napbots trading software is that you don’t have to monitor charts and candles to predict your next move. Any novice trader with zero skills can also start trading like a pro and earn money with this unique trading tool. Let Napbots take full control over your trades in just a few clicks. Now, sit back and enjoy earning money.

 

What’s so special about NapBots?

 

NapBots crypto trading software is special because it comes with:

  1. A unique trading algorithm that processes market data for you
  2. A unique crypto trading bot library so that you can create your own mix of trading strategies
  3. Autopilot mode that enables you to automate trading 24x7
  4. An easy-to-use interface so that you can copy the proven strategies of NapBots to make successful trades and make money

 

How to Get Started with NapBots?

 

NapBots is easy to start with. It involves just 3 steps:

 

Step #1: Connect to one of the available trust exchanges.

Step #2: Select from the unique list of performing Bots of NapBots

Step #3: Choose a plan that suits your investment style

 

Once you have completed these three steps, NapBots is ready to trade cryptos and earn money for you. Happy Trading!

 

Why Choose NapBots?

 

  • NapBots offers complete trading automation solutions through the use of its own tested trading strategies; offering quantitative trading strategies previously reserved for hedge funds to the public.

 

  • The setup and installation process are easy. So, the non-experts can also use it. The simple and special approach of NapBots helps it provide you with excellent ROI.

 

  • The team of professionals behind NapBots has extensive experience in the financial market. They have put their years of experience in place so that you can easily automate the management of your funds with no technical skills. This service can run 24/7 and work as your passive source of revenue even when you sleep.