Crypto trading is quite the rage these days and anyone can become a crypto trader. The learning curve is not steep and with a little bit of knowhow, tech expertise, and patience, you are good to go. You can trade crypto coins using different strategies and sometimes a combination of these. It is important to choose a strategy that aligns with your mindset, needs, and preferences.
Types of crypto traders you should know about:
Trading can be long-term or short-term. So, all traders will base their strategies depending on these two types.
- Buy and Hold Traders: These are traders who prefer to play it safe. They buy coins and hold onto these in the long-term hoping for prices to go up. They will not change their minds even when the market keeps rising and falling. To follow this approach, you must have emotional intelligence and power to ignore situations that may be unfavorable or unprecedented. Holding traders must be patient and disciplined.
- Swing Traders: These traders believe in profits from short-term trades and have specific targets. They are more stable and grounded unlike scalpers who are willing to change stances frequently. They depend on technical analysis, studying past and current market behavior to predict changes. Swing trading is hugely popular because traders can use popular trading tools to predict future prices.
- Scalpers: Scalping is the act of buying and selling during shorter time-periods in the hope of making assured profits. So, scalper traders are usually impatient and keen to make smaller profits faster. Scalping is not easy and demands a lot of involvement on part of the trader. He must monitor market movements and interpret changes correctly. Profits may be low but largely assured.
- Day Traders: You must have a lot of technical expertise and commitment to excel in day trading. Day trading is when you make trades within a single trading day. So, your involvement needs to be high and most day traders do this for a living. They must engage in dynamic market analysis in order to determine when to give away an asset. Day trading is intense because you must monitor the markets 24×7; it is also risky because price changes can be dramatic.
- Position Traders: Position trading is similar to swing trading but more in-depth and elaborate. These traders will analyze the market well prior to investing. They focus on long-term profits and will not follow charts or graphs like others. They typically look at a crypto asset’s whitepaper, study the market factors, performances by other assets, and then take decisions once they are confident of a positive outcome.
- Bull Traders: Bull trading in the crypto world is similar to that in the Forex trading world. This is for the optimistic traders who will invest in an asset that is steadily growing in value. They expect the best returns and will invest only when a coin is in a good position.
- Bear Traders: These traders are not optimistic and trade coins when they think that a crash is imminent. They are keen to make profits before the market collapses. In doing so, they must evaluate multiple market factors for predicting future prices. Bear traders are typically experienced because it takes research and skills to understand when a coin in on the verge of a fall.
- Whale Traders: These hold majority assets and have successfully mastered the art of predicting price changes and market cycles. They know the emotional decisions that control markets.