4 Crypto Trading Strategies Every Beginner Should Master

Are you a beginner in the crypto trading world? You need to have a trading strategy that you’ll use to trade successfully. 

There are many strategies that you can adopt for your trades and they can be very useful, but not all strategies are suitable for you. Some strategies are advanced, but as a new trader, what you need is a suitable strategy to get you started.

In this guide, we list strategies that you can easily adopt and start using right away to increase your chances of succeeding in your trades. 

Moving Averages (MAs)

Moving averages can be applied in more than one trading strategy, but they can be applied on their own to make trading decisions. They show the average price of an asset over a period of time such as hours, days, weeks, or even months.

A 100-day moving average for instance shows the average price of the asset over the past 100 days. MAs help traders understand the direction of the market, whether it is going up or coming down.

MAs can also be used as support or resistance in charting an asset to decide entry or exits. There are two times of moving averages, namely the simple moving average also commonly referred to as moving average, and the exponential moving average.

The exponential moving average is just like the simple moving average, only that it gives more priority to the recent price changes while the simple moving average gives equal significance to all values.

Golden and Death Cross

As earlier stated, moving averages can be used on their own and as part of other indicators. The Golden and Death Cross use two MAs to give traders a hint on the direction of the market.

Assuming you have two MAs, one for a longer period such as 30 days, and another for a shorter period, say 10 days. One of these two will usually always be above the other.

At any time the longer timeframe MA crosses above the shorter timeframe MA, this is said to be a death cross, and it indicates a direction reversal of the market from bullish to bearish.

On the other hand, a crossing of the shorter timeframe MA over the longer timeframe MA is called a golden cross, and indicates that the trend is reversing from bearish to bullish. 

This is by far one of the easiest ways to determine when trends are changing in the market so that you know when to buy and when to sell.

Dollar-Cost Averaging

This is another ideal strategy for new traders and investors in general, mainly because it doesn’t require any special knowledge to do. 

It involves buying a fixed amount of an asset at regular intervals, regardless of what happens to the price of the asset. 

For example, you may choose to buy $250 worth of Bitcoin every month regardless of what is happening to the price of the asset. 

The idea is that in the end, you will profit regardless of the volatility and other factors in the market. The strategy has been shown to increase gains and reduce losses overall.

Relative Strength Index

Relative strength index (RSI) is a momentum indicator that tells you if an asset is about to finish its rally or getting ready to start.

It has values from 0-100, 0 being that the asset is at its lowest level and set to go up and 100 meaning the asset is at the peak of the rally and could be coming down.

However, an RSI of 70 is considered overbought, meaning an asset may be coming to the end of its rally, while an RSI of 30 shows that the asset is at its lowest popularity and suitable for buying.

The values are not absolute though, because they can be breached in times of extreme bullish or bearish markets, so they only serve as guides to let you know when to watch the market more closely. 

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