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The current downturn of the crypto market has humbled even some of the most experienced crypto experts. However, you should know that regardless of the plunge in prices some traders are still slugging it out and they make reasonable profits on a daily basis. This is only possible because they have access to an array of effective strategies that can help them capitalize on the bearish run of the market. In light of this, we shall take a look at the rules guiding the adoption of trading strategies that are effective in a quiet market.
From our previous publication, we listed some of the strategies you should consider as a trader in these trying times; they include:
Margin Trading
Margin trading crypto is one of the riskiest yet most rewarding trading strategies in the market. The major difference between the traditional trading style and margin trading is that in traditional trades you get to own the coin even when you are losing, while losses in margin trades take you a step closer to liquidation.
Scalping
As you might have noticed in the current market run, the prices of cryptocurrencies occasional experience short-lived uptrends. Therefore, you can make sizeable profits by capitalizing on these short price rallies that are inevitable in a volatile market.
Long-Term Trading Strategy Which Involves ICO Analysis
For traders that employ this strategy, they gather promising coins at a cheap price in the bear market and look to sell them when they peak in a bull market. Apparently, this also involves the buying of viable coins at the ICO stage as it is a known fact that the best time to identify promising coins is during a bearish run of the market.
The trading strategies listed above are sure ways of making profitable trades in the current market cycle, however, there are guidelines you should follow before opting for any of the three. You will likely incur losses if you fail to understand that each has its perks as well as its downsides.
What Are The Guidelines For Choosing A Crypto Trading Strategy In A Bear Market?
Before choosing any of the strategies above, you should ask yourself the following questions:
Am I An Expert In Technical Analysis?
Technical analysis involves the use of charts and analytical tools as well as mathematics to predict price movements. This type of analysis is the bedrock of margin trading and scalping, therefore, if you are going for any of these trading strategies your skills in technical analysis must be up to par. Nonetheless, you can opt for quality signals from channels which are experts in margin trading or scalping.
How Much Time Am I Willing To Dedicate To Crypto Trading?
Not all trading strategies require that traders monitor price patterns the whole day. In this case of scalping, however, timing is very important and since the profit on each trade is small, you have no other option than to increase the volume of your trades. Hence, scalping is time demanding and only traders that are willing to take up trading as a day job are likely to make reasonable profits. On the other hand, long term trading strategy and margin trading are not as time-consuming as scalping.
What Is My Risk Threshold?
It is imperative to know that all trading strategy involves a level of risks, however, as mentioned earlier, margin trading is the riskiest. As such, traders that are planning on adopting this strategy must only do so when they are certain that they can live with its downside. Although margin trading promises an unmatched reward, it is prudent to consider your current health and financial status before going all out to short or long crypto. In contrast, long-term trading and scalping are less risky than margin trading and these are the strategies appropriate for people with a low-risk threshold.
How Good Is My Fundamental Analysis Skill?
Fundamental analysis involves considering various market developments as analytics for the viability of a coin. It is common for the traders to take into consideration the crypto community sentiments, the coin functionality, roadmaps, whitepapers, crypto mews, and developments when trying to pick promising coins for long-term investments as it solely depends on fundamental analysis. Traders that are not patient enough to go through this process will definitely not make quality decisions and this would lead to losses. Therefore, it is important that you revamp your fundamental analysis skills before opting for long-term trading, if not you should stick with scalping and margin trading that heavily depends on technical analysis.
How Fast Am I With Exiting And Entering Trades?
Exiting or entering trades late are perhaps the easiest ways to lose money in the crypto market. This is even more evident in scalping and traders that opt for this trading strategy must adhere to execution precision. Timing is everything, therefore, you should look into using automatic trading systems in order to sidestep losses incurred from the human factor. In order to make sizeable profits from scalping, traders execute as much as 100 trades per day and it is important to have an auto trading bot in place that can help them cope with this volume of activities.
Conclusion
Crypto trading strategies that are particularly profitable in a bearish market has their pros and cons and the guide above will help you choose the most suitable one for you. You can, however, take advantage of our services to further boost your chances of making money from these strategies.
