In the volatile world of crypto, you will need nerves of steel, a winning game plan and an intuitive trading platform if you want to win. You’ll find the nerves of steel and intuitive trading platform through research, research and more research. Let’s take a look at the X-factor in this gumbo — the trading strategies you’ll use.
In many cases, a cryptocurrency will trade for a long time inside a certain range. Bitcoin, for instance, traded between $8,601.40 and $10,210 for a 30-day period. This ±9.4% range seems volatile until you realize that Bitcoin can realize a ±42% change in 24 hours.
Cryptomarket caps are small enough that they can be manipulated by a single big mover. In some cases, those big movers will systematically manipulate the price of a coin up and down to profit from a range. If you notice these patterns, you can take advantage of them as well.
If you are range trading, you want to pay attention to overbought and oversold zones. Overbought means that buyers have saturated their need, and the stock will probably sell off; oversold means the opposite. Chart indicators, included in any reputable stock chart program, can help you find these zones. Common indicators used for this purpose include the Stochastic Oscillator and relative strength index (RSI).
Pionex is a platform that allows you to use customized trading bots to automate your crypto investments. You can trade manually if you wish, but there are 18 bots to choose from that can do everything for you.
The trading bot selection includes:
- Grid Trading Bot allows users to buy low and sell high in a specific price range.
- Leveraged Grid Bot provides up to 5x leverage.
- Spot-Futures Arbitrage bot helps retail investors to make passive income with low risk. The estimated return for this strategy is 15~50% APR.
- Martingale bot performs DCA buy, one-time sell to capture fluctuation profit.
- Rebalancing bot helps you to hodl the coins.
- Dollar-Cost Averaging (DCA) Bot Sets repeated purchasing at regular intervals to offset the effects of volatility.
Plus, the Smart Trade terminal allows traders to set up stop-loss, take profit, and trailing in one trade.
With low fees of 0.05% for makers and takers and low risk, you can enter the crypto market much more easily than if you started buying on your own. Plus, you can sign up for free.
Try the Pionex mobile app to get the same experience you have on the website, live chat with the staff or email with any questions. Remember, you only pay maker and taker fees. Plus, you can save time that you would’ve spent scouring market data and investing doing something else.
High volume investors are also welcome to join the Market Maker program, which requires entrants to deposit $300,000 or more or hold $300,000 of crypto assets like Bitcoin, Chainlink, etc. Additionally, the market maker program charges no maker fees.
Scalpers take advantage of increased trading volume to profit. Scalpers may exit a trade seconds after entering, and many use automated bots to increase the frequency of their trading cycles. Ideally, scalpers want to exit a trade before any news item or short-term fluctuation has a chance to change the market’s sentiment on a coin.
It is best to have a large bankroll to take advantage of this extremely short-term day trading crypto strategy. Although the ROI of each trade is very small, staking a large amount means the scalp comes back with a substantial amount of money (0.5% of $100,000 is $500, enough for a luxury car payment). Trading frequently — sometimes making 10-20 trades per minute — also means those small gains add up.
Playing Bitcoin Volatility
The Chicago Mercantile Exchange (CME) offers options on Bitcoin futures, opening up a wealth of volatility strategies for traders. Crypto has 5X the volatility of traditional asset classes. Volatility trades are ideally directionless, meaning there is a possibility of making money whether Bitcoin goes up or down.
The long straddle is one directionless volatility strategy using Bitcoin options. To initiate, you buy a call and put option at the same time for the same strike price and expiration date. The Bitcoin straddle is profitable when Bitcoin falls or rises away from the strike price by more than your premium. To exit the trade, you sell the call and put at the same time.