In a market as volatile as the UK crypto trading market, there is a great need for nerves of steel, an efficient plan, and a good trading platform that can help you win as often as possible. You can do thorough research to help yourself find the ideal platform.
Besides this, you must have the right strategies. Beyond that, you should also ensure that you stick to these tactics and never be influenced by your emotions. Some of the best crypto trading strategies are discussed below:
This involves a short-term trading tactic of making little and frequent profits and is aimed at generating a significant return after the trading session. In other words, you take advantage of an expanded trading volume to make profits. You may wish to exit a trade just seconds after entering it, some even use automated bots to boost their trading cycles frequency.
Usually, scalpers may wish to exit a trade before any form of fluctuation changes the market’s sentiments on a coin. Many UK traders prefer to have an effective bankroll that takes advantage of this strategy. Despite the fact that you may not get a huge ROI on each trade, you win a significant amount of money by staking a huge amount.
Oftentimes, a bitcoin will trade for the long-term within a specific range. For instance, if Bitcoin is traded between $8,500 and $10,094.6 within 30 days. You might think the ±9.4% range is volatile until you understand that Bitcoin can realize over a ±42% change within a day.
If you want to adopt this strategy, it is necessary you pay close attention to oversold and overbought zones. There are different chart indicators, included in any reputable stock chart program, that can help you detect these zones. Common indicators used for this purpose include the relative strength index and Stochastic Oscillator.
Understanding Bitcoin Volatility
Generally, Bitcoin and other cryptocurrencies have 5X the volatility of traditional asset classes. Ideally, Volatility ensures trades have no specific directions and this implies that there is a chance of earning profits regardless of whether Bitcoin goes up or down.Also, the right trading platform is important. A UK trader that is looking to make huge profits must join the right Bitcoin Profit app.
Another directionless volatile strategy that is effective is the long straddle. It is an options strategy that involves a trader predicting that the underlying asset will move significantly at price, either higher or lower. The profit profile is the same regardless of the direction the asset moves.
In cryptocurrency, traders find arbitrage quite effective by purchasing and selling crypto assets across different exchanges, and this ensures that they can capitalize on different prices for the same asset.Since it seems quite easy to make a profit with this strategy, then it is not unusual to ask, “is arbitrage a legal strategy?” In most countries across the globe, including the UK, arbitrage trading is legal since it contributes to market efficiency.
As an arbitrage trader, once you complete your trade, you can also introduce other traders, who wish to exploit this price difference, to the market. This will result in a balanced price of the asset across several markets.It is worth noting that traders should also take trading fees into consideration when attempting arbitrage. The fees that are required to make a trade on an exchange may be more than the gains from the trading spread.
Crypto trading in the UK is highly volatile and because of this, it is important for a trader to be focused and strategic. In fact, about 1.9 million people – approximately 4% of the adult population – own cryptocurrencies in the UK. This shows how fast the market is expanding. To make significant profits, you must have the right strategy and be ready to adhere to it.