Brussels (Brussels Morning) An investment of roughly €1000 in bitcoin in 2017 could have made you a millionaire today. However, on the flip side, people have lost massive amounts of money during the ruthless bear runs in the crypto market.
Those who act rationally and thoughtfully increase their chances of finding a place on the financial winners’ podium. Fortunately, it is not even necessary to completely reinvent the wheel. There is enough information, analysis and guides that virtually anyone with access to the internet can follow.
In this article, we are going to discuss three crypto trading strategies that have shown considerably better results than others. We do not give any trade recommendations but see ourselves as an information service provider.
Nevertheless, these strategies are used by successful crypto investors in one way or the other, so they’re certainly worth checking out!
Strategy #1: HODL!
Strictly speaking, this strategy is not about trading, but rather an investment. What is the difference? Trading implies a far more active approach. Here, Bitcoin forecasts Bitcoin news and price developments are possibly even analyzed daily, and ultimately changes and so-called rebalancing are carried out. An investment, on the other hand, is more passive and, in almost all cases, implies a broader investment horizon.
With this strategy, promising coins are bought, stored safely and then ideally even kept for several years – to ultimately sell them at a point in time with an enormous increase in value, at least in theory.
Strategy # 2: Investing long term while actively switch
With regard to the time, this strategy does not differ from the first- but with a subtle, but not so small, difference. Here, the crypto market is actively followed, and transactions are made every now and then, depending on the price levels and crypto news.
This could be expressed, for example, in selling Bitcoins when the market seems to be overheated, and investing in other projects, such as Ethereum or IOTA if changes are emerging here or these currently seem underrepresented in terms of market capitalization
Strategy # 3: Speculating on Bitcoin & Co. with CFDs
In the domain of crypto investments, Contract For Differences (CFD), is a type of trading where the trader agrees to exchange the difference in the price of a cryptocurrency obtained from the opening and the closing prices.
CFD trading benefits from price development, regardless of whether the price of the cryptocurrency is rising or falling. In addition, through the leverage effect, larger sums can also be moved in the market with little capital investment.
This crypto trading strategy usually requires the highest amount of time and is anything but passive. Many day traders take advantage of the volatility of the crypto markets. Ideally, there are high returns. In the worst case, however, there is a risk of total loss.