The Best Cryptocurrency Trading Strategies for Beginners

Categories: Crypto Trading  

Tags: Cryptocurrency Malaysia  Crypto Malaysia  Crypto Trading  Crypto Trading Malaysia  Cryptocurrency Trading Malaysia  

Publish date: 2023-1-26

As the world of cryptocurrency trading continues to grow, so does the number of people looking to get in on the action. However, how do you start trading cryptocurrencies if you're a beginner? These are just a few strategies to get started with your journey of Cryptocurrency Trading.

Table of Contents

What is Cryptocurrency Trading?

  • Crypto Trading Strategies
    • Day Trading
    • HODL-ing
    • Arbitrage Trading
    • Dollar-Cost Averaging (DCA)
    • Trend Trading
  • Crypto Trading Tips for Beginners
    • Start with Small Investment
    • Learn the Basics
    • Utilize the Technical Analysis
    • Diversify the Portfolio
    • Stay Up-to-Date
    • Have a Trading Plan
    • The Bottom Line

What is Cryptocurrency Trading?

Cryptocurrency Trading or known as Crypto Trading refers to the act of buying and selling of cryptocurrencies to make a profit or a loss. However, it isn't as easy as people think to make a profit from Crypto Trading as its market is highly volatile, making it riskier compared to traditional trading.

Therefore, you might wonder how Crypto traders make money from this given the high risk. That's because they utilized Crypto Trading Strategies and followed the tips below carefully to make profit by winning small each and every time while trying to avoid losses.

Crypto Trading Strategies

Day trading

Crypto Day Trading refers to opening and closing positions in the market on the same day within the trading hours. Sometimes also known as intraday trading because traders started and finished the trade in one day. It is very risky due to the high liquidity and volatility of the crypto market.

Compared to HODL-ing (buying and holding) which relies on the long term performance of the market, day trading seeks to take opportunity and gain short-term profit throughout the day.

The aim of day trading is to take advantage of immediate profit from the tiny price discrepancies within a very short window of time. Thus, it can be very risky but at the same time, the profit can be rewarding as it adds up until the day is over.


HODL-ing (Buying and Holding) is used when making a profit or loss on a long-term basis. Basically, you buy and hold the crypto when you expect an upward market movement and sell it for profit afterwards.

HODL-ing is a strategy that allows investors to potentially take profits from long-term growth. This can be advantageous since it avoids the risk of short-term volatility and allows for an extended investment period. Additionally, HODLing can help investors secure capital gains over time as the value of their holdings increases.

Arbitrage Trading

Arbitrage Trading is a crypto trading strategy that relies on arbitrage opportunities to earn a profit or loss in which the trader buys cryptocurrency in a market and sells it in another market. Arbitrage opportunities occur when there are discrepancies between two markets, which can be taken advantage by the traders to make profit.

Crypto traders can make a profit or a loss due to the difference in liquidity and trading volume of different markets, for example two different crypto exchanges. Crypto traders register accounts on crypto exchanges in order to find a significant price discrepancy for the cryptocurrency they’re trading so they can buy the crypto on the market with a lower price and then sell it on the market with a higher price.

As an example, assume that the price of Ethereum on the Huobi market is $5800 and $6000 on the FXCM market. Crypto traders might notice the price discrepancies of the Ethereum between these two crypto exchange markets, then they can buy Ethereum on Huobi for $5800 and then sell it on FXCM for $6000 to earn the profit of $200 from the price difference. 

However, Crypto traders have to pay the trading fee twice on the crypto exchange, reducing the overall profits. Moreover, this trading strategy can only work if you can take advantage of the arbitrage opportunity. This means you might not have any profit if there is no arbitrage opportunity available.

Dollar-Cost Averaging (DCA)

DCA is a strategy that allows you to invest in your preferred cryptocurrencies over time, without putting your holdings at risk. By choosing a fixed amount of money to invest each time, you can avoid the high volatility of the markets and make steady profits.

However, DCA comes with some caveats – you must be willing to pay higher trading fees, and it takes more time commitment than other strategies. So before adopting this approach, be sure to do your own research first!

Trend trading

Trend trading is a popular investment strategy that involves holding positions for a few months to profit from directional signals. When a trader anticipates downward movement, they enter into short positions. However, if they believe in the long-term trend, they'll buy and hold as their investment strategy.

Trend traders use indicators like moving average convergence and stochastic oscillators to increase their chances of success. Regardless of experience, trend traders must always do their research before investing money.

Crypto Trading Tips for Beginners

Start With Small Investments

Before investing a large amount of money into cryptocurrency trading, it is important to start with small investments. This will allow you to gain experience and understand how the market works without risking too much.

Learn The Basics

A great way to get started with crypto trading is to learn the basics. This includes understanding terms such as blockchain, wallets, exchanges, and more. Everything you need to know about Cryptocurrencies can be found in articles online which can be informative and helpful.

Utilize Technical Analysis

Technical analysis is an essential tool for any trader. It allows you to analyze historical data in order to predict future price movements. This can be done through charting, indicators, and other technical tools.

Diversify Your Portfolio

Cryptocurrency trading is all about diversifying your portfolio. This means investing in different coins, as well as different types of assets. This will help you spread out your risk and maximize your chances of success.

Stay Up-to-Date

The cryptocurrency market is always changing, so it's important to stay up-to-date with the latest news and trends. Following crypto influencers, reading industry publications, and joining online communities are all great ways to stay informed.

Have a Trading Plan

Just like any other type of trading, it's important to have a plan when trading cryptocurrencies. This includes setting goals, understanding risks, and having an exit strategy. Having a plan in place will help keep you focused and disciplined while trading.

The Bottom Line

Crypto day trading is a high-risk strategy that can be lucrative, but it's important to be aware of the risks. Make sure you have a clear day trading strategy and stick to your entry and exit points, or you'll likely lose money.

Also remember it's important to set aside time each day to focus on reviewing your trades by measuring your profits and losses, and stay disciplined in order to make the most of this high-risk investment opportunity.

Before you start your crypto trading journey, one last tip to boost your success is to open a demo account in FXCM and gain experience on crypto trading before the real deal.

[Disclaimer] The articles above are purely personal opinions and are not intended to be investment advice. Only for the purpose of mutual learning and sharing. There is no express or implied warranty regarding the accuracy or completeness of the above-mentioned information. Anyone who relies on the information, ideas, or data contained in this article does so entirely at their own risk.