Crypto trading offers a wide range of strategies for traders to explore. Each approach caters to different risk appetites, timeframes, and market conditions. In this guide, we will delve into 10 of the best crypto trading strategies and provide key takeaways for each one. 
Whether you're a seasoned trader or just starting, these strategies can help you navigate the exciting world of cryptocurrency trading.
1. High-Frequency Trading 
High-frequency Trading (HFT) is a sophisticated trading strategy that involves executing a vast number of trades in a very short period, typically within fractions of a second. It relies heavily on advanced algorithms and high-speed data feeds to capitalize on small price discrepancies in the financial markets. 
Traders can take advantage of market movements faster than human traders can react, which can result in significant profits. They can handle a large number of assets and markets simultaneously.  It often provides liquidity to the market by continuously quoting bid and ask prices.
Key Takeaways 
1. Trades at lightning speed
2. Advanced algorithms and technologies
3. Contributes to market liquidity
2. Scalping 
Scalping is a short-term trading strategy that aims to profit from small, rapid price movements in financial markets. It lets traders make numerous quick trades throughout the day, holding positions for very short periods, often seconds or minutes. It primarily relies on technical analysis, studying price charts, indicators, and patterns to identify short-term price fluctuations and potential entry and exit points.
It usually closes all positions by the end of the trading day, eliminating the risk associated with overnight price fluctuations. By targeting small price movements, scalpers aim to accumulate gains throughout the day. Frequent entering and exiting positions ensure smoother price movements for all market participants.
Key Takeaways 
1. Profit from small price movements
2. Rapid decisions based on real-time market data
3. Minimizes emotional decision-making 
3. Range Trading 
Range trading capitalizes on price oscillations or fluctuations within a defined price range. Traders employing this strategy aim to profit by buying near the lower boundary and selling near the upper boundary of the established range. When the price approaches the lower support level, range traders may initiate a buy position, anticipating a price rebound within the range.
Range trading involves repeatedly buying low and selling high within the established range as long as it remains intact. It takes advantage of the predictability of price movements within a well-established range. Traders can filter out short-term market noise and focus on the core trend within the range, which can help in decision-making.
Key Takeaways 
1. Predictable price movements 
2. Reduced risk 
3. Adaptability 
4. Arbitrage Trading 
Arbitrage trading exploits the same or similar asset price discrepancies in different markets or exchanges. Traders who employ arbitrage seek to profit from the price differences by simultaneously buying low in one market and selling high in another. It monitors multiple markets or exchanges for price differences in the same asset.
Once an arbitrage opportunity is identified, the trader quickly buys the asset in the market where it is cheaper and simultaneously sells it in the market where it is more expensive. Its opportunities are based on observable price differences, making the profit potential relatively predictable compared to other trading strategies.
Key Takeaways 
1. Reduced market risk 
2. Risk-free profit
3. Predictable gains 
5. HODL
HODL represents a long-term investment strategy in which cryptocurrency holders resist the urge to sell their assets during periods of price volatility and instead keep them for an extended period, often years. HODLers buy cryptocurrencies to hold onto them for an extended period, regardless of short-term price fluctuations or market volatility.
It reduces the exposure to short-term market volatility and speculative trading. It avoids the pressure to make quick trading decisions and minimizes transaction costs associated with frequent buying and selling. It can be an attractive option for those who prefer a more hands-off approach to investing.
Key Takeaways 
1. Straightforward strategy
2. Long-term Investment
3. Tax Advantages 
6. Day Trading 
Day trading is a short-term trading strategy where traders buy and sell financial assets within the same trading day. Day traders aim to profit from the price fluctuations that occur within a single session, capitalizing on both rising and falling market prices. These trades can be in various financial instruments, such as stocks, cryptocurrencies, forex, or commodities.
Day traders focus exclusively on intraday price movements and do not hold positions overnight, which helps avoid the risks associated with overnight market developments. It offers the potential for daily income, allowing traders to profit from intraday price swings. It requires constant monitoring and decision-making throughout the trading session.
Key Takeaways 
1. Quick profits
2. Potential for Daily income 
3. Active involvement in trading
7. Swing Trading 
Swing trading aims to capture shorter to medium-term price movements within financial markets. Swing traders can typically hold positions for several days or weeks, as opposed to day traders who operate within a single trading day. This strategy involves analyzing price swings and using technical and fundamental analysis to make trading decisions. 
It strikes a balance between the short-term intensity of day trading and the long-term commitment of HODLing. Traders can participate in the markets without the need for constant monitoring. Compared to other trading strategies, swing trading allows for a more relaxed approach, as traders don't need to make rapid decisions or sit in front of screens all day.
Key Takeaways 
1. Medium-term price swings 
2. Opportunity to capture profits
3. Multiple trade option
8. Dollar-cost Averaging 
Dollar-cost Averaging involves regularly investing a fixed amount of money at predefined intervals, regardless of the asset's price. This approach is designed to reduce the impact of market volatility and allows investors to buy more shares or units when prices are low and fewer when prices are high.
Traders must invest a fixed dollar amount at regular intervals, such as weekly, monthly, or quarterly. Since DCA involves investing at regular intervals, investors buy more shares or units when prices are low and fewer when prices are high, effectively spreading their purchases over time. It is suitable for both beginners and seasoned traders. 
Key Takeaways 
1. Consistent growth 
2. Beginner-friendly
3. Regular investments
9. Long-Term Position Trading 
Long-term position trading is an investment strategy where traders and investors buy and hold assets for an extended period, typically spanning several months to several years. The goal of long-term position trading is to benefit from the potential growth of the asset over an extended timeframe, rather than attempting to profit from short-term price fluctuations. 
Once assets are chosen, traders and investors buy them to hold them for an extended period, regardless of short-term market volatility or price fluctuations. Long-term position traders have a future-oriented approach, aiming to build wealth over time. Holding assets for an extended period can also result in favorable tax treatment in some jurisdictions. 
Key Takeaways 
1. Reduced short-term volatility 
2. Potential for compounding returns 
3. Tax Benefits
10. News-based Trading 
News-based trading relies on timely and significant news events to make trading decisions. Traders who employ this strategy seek to profit from the price volatility and rapid market reactions that often follow important news releases. Some traders may use limit orders or stop orders to automate their trades once certain price levels are reached.
Traders analyze the potential impact of the news event on various financial instruments, such as stocks, currencies, commodities, or cryptocurrencies. They consider the consensus market expectations and the potential deviation from those expectations. Traders who stay well-informed about current events and economic developments may have an information edge that can be leveraged for trading decisions.
Key Takeaways 
1. Immediate execution 
2. Information Advantage 
3. Market Catalyst
I hope this article has helped you understand the importance of the best crypto trading strategies, ways to use them and manage risks in trading. However, it is also important to conduct thorough research, understand its risk tolerance, and choose a suitable trading strategy before entering the market.
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However, similar to trading in equities and commodities, crypto trading is fraught with risks and pitfalls. In order to get long term benefits from crypto trading, market enthusiasts need to develop strategies that can make trading fun and safe at the same time. Let us start by going through strategies that can help you get favourable returns.
Day trading
This trading strategy involves taking positions and exiting on the same day. The aim of a trader while adopting such a trade is to book profits amid intraday price movements in a cryptocurrency of his choice. For a successful trade, investors often rely on technical indicators to figure out entry and exit points for particular crypto.
Range trading
Market players also rely on experienced analysts, who give out support and resistance levels each day. ‘Resistance’ refers to the point up to which the price may rise and therefore a resistance level is a price above the current price. In contrast, ‘Support’ is a level below which a crypto price is not supposed to fall, hence a support level is always below the current price.
Scalping
This trading strategy involves using increased trading volumes to book profit. Although there is risk involved, a smart trader takes care of the margin requirement and other important rules to avoid bad trading experiences. Scalpers analyse the crypto asset, past trends, volumes and choose an entry and exit point within a day.
High-Frequency Trading (HFT)
HFT is a kind of algorithmic trading strategy used by quant traders. This involves developing algorithms and trading bots that help quickly enter and exit a crypto asset. Developing such bots needs an understanding of complex market concepts and a strong knowledge of mathematics and computer science. Therefore, it is more suited for advanced traders than beginners.
Dollar-Cost Averaging
When it comes to finding the perfect entry and exit point in a crypto market, it is best to assume that timing the market is next to impossible. So, a rather sound way to go about investing in cryptos is ‘Dollar Cost Averaging’(DCA). DCA refers to investing a fixed amount at a regular interval. This strategy helps investors do away with the cumbersome job of timing the markets and building wealth in the long term.
However, exit strategy could also be tricky in the DCA style. It requires the study of the market trend and understanding of the market cycle. Reading technical charts can also help you exit at an appropriate time. Crypto investors should monitor oversold and overbought regions before taking a call. You can refer to Binance live charts for a better understanding of technical charts of various cryptos.
Build balanced portfolio
Crypto trading is still at an evolving stage. While several countries welcome trading in the cryptos, some are still skeptical about it. Central banks across the globe are working on better ways to regulate digital currencies and therefore, trading in cryptos is often a risky affair. However, there are strategies that can help investors steer clear of extreme volatility.
Building a balanced portfolio that includes variety of cryptocurrency like Bitcoin, Dogecoin and Ethereum could go a long way in beating volatility.
Besides, investors can also maintain a fixed amount of regular investments in different cryptos. This will increase the risk appetite in a systematic manner and will help your portfolio to yield favourable returns in the long term.
Avoid making trading calls based on hype
Relying on social media for news on cryptocurrencies is among the mistakes that new investors tend to make. Investment decisions should never be based on hype created on social media. Since digital currency is a hot topic, false information on this topic tends to travel very quickly.
Primary Research
One of the most important trading strategies is to do primary research. You need not be an expert at trading to conduct primary research on the value of the asset you wish to purchase. This involves being updated with all the news flow regarding the crypto industry. Binance helps you do that quickly by collating all the news items that you need to read before the start of your day.
Besides, you must evaluate your own finances and set an investment goal well before placing a bet on a volatile asset class such as crypto. You can research Bitcoin, Ethereum, Tron, Ripple, Litecoin, etc. and start investing on Binance.
Arbitrage
Arbitrage refers to the strategy under which a trader buys crypto in one market and sells it in another. The difference between the buy and sell price is known as ‘spread’. Owing to the difference in liquidity and trading volume, traders can find an opportunity to book profit. To adopt this opportunity, you must open accounts on exchanges that show a large difference between prices for the crypto that you are trading at.
Betting on Bitcoin Volatility
It's not news that Crypto is among the most volatile asset classes being traded currently. Recently, Bitcoin prices had fluctuated nearly 30% in a single session. You can bet on volatility by trading in Bitcoin futures. The way to go about it is by buying a call and put option at the same instance. The strike price and expiration date must also be similar. To exit, when crypto prices fall or rise vigorously, you must sell the call and put option at the same time too.
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1. Starting with Real Money Before Paper Trading
Trading is a skill like any other that takes countless hours of practice and patience to master.
It has some ground rules and one of them is using paper trading before you put in the real money. This part is boring for many but it is the most quintessential aspect of trading crypto. Many trading beginners who don’t mind losing money (gambler mindset) end up making real money trade even before mastering skills.
What you need to keep in mind is that the crypto market is not going anywhere. Even if you prepare yourself for two months (or 100 trade) with paper trading, you will not lose anything. You can prepare yourself better for the big game with crypto paper trading before putting in real money.
2. Not Using Stop Loss (Risk Management)
Stop losses are the holy grail of risk management. Stop loss helps you to minimize the losses when your anticipated trade goes south. It does not matter how confident you are about a trade going right, not using a stop loss is the biggest egoistic mistake you could ever make.
Almost all the best crypto exchanges offer this feature to set a stop loss of which some offer a trailing stop loss feature. I will cover stop loss and trailing stop loss in the days to come. If you have never used stop loss before or skipped them in your trades, you must start adding it. Using stop-loss with every trade you make helps you avoid the #1 mistake crypto traders make.
If you follow this single strategy, you might treat me to a pizza one day.
Anyhoo, moving on to the next one…
3. Paying High Brokerage Fees
Brokerage fees (high trading fees) can eat a significant portion of your trading profits. The key here is to use a broker (exchange) that offers low fees trading and has high volume and liquidity.
This way, you will end up making more money from trading.
Here are a few exchanges that offer the lowest brokerage fees:
Binance0.1% fees
CEX0.25%
4. Not Seeing Profit/loss as a Percentage
This is another classic mistake beginner traders make.
They often see their profit and loss as an absolute gain rather than seeing it as % gain or loss. Make a habit of seeing every trade of yours as a percentage improvement to have a clear picture of your profit and losses.

5. Not Doing Fundamental Analysis
A lot of beginners start by picking a popular cryptocurrency and start trading in them. There are chances that you will end up making good money for a prolonged time. However, when one fine day the coin dumps like there is no tomorrow, a single big loss would turn your portfolio red for a long period.
The way to avoid this newbie crypto trading mistake is by carrying out a fundamental analysis of the coin that you wish to trade.
Learn about:
What does this coin do?Future outlook of the CryptocurrencyThe management teamToken economy
Based on these parameters, create a list of tokens that you would like to trade. Always remember, trading is unique for everyone for which you must build your system.
6. Trading Based on Pump/Dump Calls
There are Telegram/Discord groups that provide signals for buying/selling crypto. But do they work?
Hell no!
Especially as a beginner, you are better off avoiding such pump and dump schemes.
Such groups are not practical. When thousands of users are acting on the same trading call, the chances of those “Signals” working is bleak to none.
Moreover, the smart money has already moved in or out and now the beginner trader money is at stake.
It may work when the group is small and the owner is a pro-trader with high ethics. Such groups are paid and are usually very small in size (less than 20). Either way, you need to have the basic trading skills to take advantage of such signals.
Like other indicators of technical analysis, use these calls as only an indicator and not an actual trade. The trade situation may change wherein you would end up losing more than gaining.
7. Not Maintaining a Trading Journal
This is perhaps the biggest mistake many beginner crypto traders commit. Writing down why you are taking a trade and analyzing them at a later stage helps you answer the following:
Why specific trades are giving excellent results?Why you are losing some trades?
Maintaining a trading journal will help you to improve your trading strategy with time.
You can always use excel or a paper journal. It is something that has proven to graduate a beginner to the next level of mastering crypto trading.
8. No Trading Plan
“Failing to plan is planning to fail”

You must have a plan before getting into any trade. It means that you need to know your entry and exit plan, principal investment amount, and the maximum loss you are willing to take.
Beginner traders usually don’t have a trading plan and they are ok staying in a loss-making trade for a long time. Having a trading plan before execution will save you from making novice trader mistakes.
9. Revenge Trade
In trading, losses are inevitable.
Not many users have built the muscle to accept losses and they end up getting into the revenge trade. Such trading's are based on fear and frustration and are highly toxic for your trading journey. Often, such traders attempt to take riskier trade to cut down the losses. It is known as revenge trading.
You must be mindful after losing any trade. Know that nobody ever won 100% of trade. With a proper risk-reward ratio, even winning 40% of the time can keep your crypto portfolio positive.
10. Not Calculating Risk Reward
Me: Why are you getting into a trade?
You: To make a profit. Duh!
But how much profit do you want to make? How much loss you are willing to take?
In nutshell, this is the risk-reward ratio.
For every USD 50 you risk, you should aim to gain a minimum of USD 100 (reward).
You should have the following:
50:100 = 1:2 (Risk reward ratio)
Advanced traders usually recommend a 1:3 or 1:5 risk-reward ratio.
Either way, having a clearly defined risk-reward ratio helps you to avoid getting into risky trades. Even if you are losing multiple trades in a row, your overall portfolio will not be affected in the long run.
11. Using Margin Trading Too Soon
Margin trading is borrowing money (that you don’t own) from exchange to get into the trade. The benefit is that you will end up making a big profit (with the same money) if you play your cards right. However, you can also face big losses if your trade goes south.
Unless you have perfected your spot trading or paper trading, do not get into margin trading.
12. Trading Multiple Pairs
Trading multiple pairs initially will only leave you confused, hampering your skill development process. My mentor taught me to stick with one pair for the initial 100 trades. Even when I started winning after my 40th trade, he made me stick to the course until my 100th.
I could only see the wisdom in his teaching with time. Staying with a single pair for the initial 100 trades helped me improve my skills about the rest of the stuff. Trading is a marathon, not a sprint. You are better off honing your skills rather than trading like there is no tomorrow.
13. Not Following Your Style: Avoid Herd Mentality

Everyone has a unique style of trading and so do you. It may baffle you in the beginning but you will surely discover it with time.
For a beginner, it is common to have a herd mentality and belief that everyone trades the same way. However, it is not true. You should start creating your style with maybe hit and trial method or by taking expert advice.
See the beauty in your unique trading style.
Final Thoughts
“To Err.. is human”
Be ready to make and acknowledge some of these beginner’s trading mistakes. You should focus on making fewer mistakes with each trade. It is how you can perfect the art of trading.
As you move ahead in the journey of being a crypto trader, you will realize that some of these mistakes are actually timeless wisdom. Some of the above-mentioned tips can be improvised based on your current situation. Your goal should be to minimize losses, focus on wins, and build your unique style.
As I learn more, I will update this guide with more tips and ideas. You can follow me to revisit it in the future.
If you like these tips of “Common Mistakes of Crypto Trading”, consider sharing them with your friends who have recently started crypto trading or plan to do so.
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