Search the web and you will find a lot of articles about crypto trading strategy that often fail to focus on individual goals. Without first defining your goals for crypto investment, you’ll likely find most of what is found to be intimidating. A successful crypto trading strategy requires a level of expertise new traders will need years to acquire. So the first challenge for newbies to crypto trading is to identify goals and adopt a strategy unique to the reality that they are inexperienced. It is always wise to know your own limitations, never more true when trading bitcoin.
Crypto Trading Strategy and Goals
What exactly do you hope to accomplish by investing in bitcoin or altcoins? If your goal is to buy in hopes that the asset price increases in the future, then “HODLING” is a good strategy. “Hodl” means to hold your position regardless of market movements in hopes your investment will grow in value over time. Hodlers do not check the price daily or agonize when it drops and panic sell. They hodl through the ups and downs of a volatile market like a boss, making this the easiest crypto trading strategy to adopt and maintain.
Most crypto trading strategies focus on generating returns in fiat dollars, but it is easier for beginning traders to focus on generating BTC returns. It can be less stressful when success is measured by the amount of bitcoin acquired vs. the dollar value of holdings on any given day. Of course, this strategy assumes you are investing funds not needed for living expenses.
With accumulation as your goal, each gain is measured as a win when the amount acquired increases, regardless of the current price of the asset. This type of goal is more often adopted by those with an interest in personal financial freedom rather than turning a fast profit. Crypto trading strategies that harness the power of compounding with good risk management tactics are more suitable for this goal.
Accumulating bitcoin instead of more fiat money allows a crypto trader to take advantage of the early adoption tailwind enjoyed by a market not yet mature. Bitcoin’s value could increase substantially as adoption increases worldwide due in great part to its scarcity, but also because it is highly liquid and has low third-party risk. Accumulation is also a great way to lessen the tax burden by incurring long-term vs. short-term capital gains taxes only when it is converted to fiat.
Let’s look at strategies for beginners to accumulate.
Beginner Goals for Successful Crypto Trading Strategies:
- HODL for Long Term Investment Goal
- Accumulation Goal to Increase Personal Wealth
Successful hodling over time rewards with potential asset value increase. Accumulating increases the reward exponentially.
Accumulation Trading Strategy
The first consideration when trading your asset is how much to risk. It is more logical to start with a small portion of your bitcoin, for example, when crafting a strategy. The second consideration is control of your assets.
Trading platforms that require the deposit of your funds into the custody of the platform are the riskiest. Of course, there is a risk when holding funds on an exchange, but you maintain control of your assets and can monitor to ensure trading is actually occurring. There are many platforms that are complete scams, with no trading occurring at all.
Other methods include placing your funds into interest-bearing accounts that loan your assets to others. Such platforms should be vetted carefully for legitimacy. There are also platforms that will loan you money using your crypto assets as collateral, and this can be an option if you wish to preserve your principal balance. Of course, fees for these services would need to be taken into account, as well as the risks specific to each individual provider.
Options are for those traders willing to accept limited profit for limited risk. It is a contract that gives its owner the right to buy or sell a fixed quantity of an underlying asset at a specific price within a certain timeframe. Options can be a good choice for more conservative traders looking to accumulate.
Making Crypto Trading Easy
TradeSoEz™ is the first platform designed to offer Plug and Trade™ functionality that helps beginners trade so easy by effortlessly copying expert traders. Investors will love the easy set-it-and-forget-it approach that also promotes a “watch and learn” mindset. Trades executed by professionals are automatically duplicated by the software in the investor’s personal exchange account. The platform never has access to a subscriber’s funds. For a nominal monthly subscription fee, experts handle the time-consuming research, analysis, and market monitoring critical for profitable trading.