Cryptocurrencies are a hot asset class to trade. Numerous cryptos have achieved absolutely phenomenal returns during the last few years. A good example is our overview on the best cryptocurrencies to invest in, which returned more than 33,000 percent since 2017.

A solid cryptocurrency strategy is one that maximizes profit potential and at the same time minimizes risk. Trading cryptocurrencies may be riskier than trading conventional financial instruments like forex currency pairs. Cryptos are much more volatile than fiat currencies and are also less liquid.

Like with any other asset class, a solid trading strategy is crucial for successful cryptocurrency trading.

When liquidity is thin and volatility is high, stop-loss orders can easily be rendered ineffective. Also, cryptocurrencies are a young asset class that still has much to prove to the world. Many cryptos have little intrinsic value and could be vulnerable to ‘crash and burn’.

Although cryptocurrency trading has been relatively easy to many people so far (because of extremely powerful bull trends), it can definitely be challenging. Because cryptos are so volatile, the individuals who trade them should be armed with the right mindset and be ready to face (and take advantage of) the volatility when it presents itself.

Let’s examine some profitable cryptocurrency trading strategies and see how we can beat the market:

Buy-and-Hold Cryptocurrency Strategy

Buy-and-hold crypto trading has definitely been one of the most profitable cryptocurrency trading strategies so far. This is not surprising because most of the major cryptocurrencies are not far from their all-time highs and many are pushing to fresh highs at the moment. The guys who have bought and held these cryptos during the last few years until now have all been rewarded handsomely.

On the other hand, many traders who have used other long (buy) trading strategies have exited the market prematurely and missed out on some healthy profits.

More in-depth information and tips on buy-and-hold cryptocurrency trading.

Trading Cryptocurrencies With Price Action

Price action trading is reliable and useful across basically all tradable financial instruments. Human psychology creates common price action patterns which are useful to informed traders. Learn how to interpret them and you could put some pounds into your pockets.

Why cryptocurrencies can be traded effectively with price action.

Breakout Cryptocurrency Trading Strategy

Two very important advantages of breakout crypto trading are confirmation and a guaranteed entry. When cryptocurrencies are really on the move, they sometimes don’t make deep pullbacks. People waiting for such pullbacks often miss out on good opportunities to make with-trend/with-momentum profits.

Breakout trading is an excellent way to trade cryptocurrencies because of the massive price moves they produce. Forceful one-sided moves are ideal for making money with breakouts.

Swing Trading Cryptocurrency Strategy

Not every trader has the patience to perform buy-and-hold crypto trading. For those individuals, swing trading may be a good option.

There are numerous swing trading strategies that use all kinds of candlestick patterns, technical indicators, and even retail sentiment. Swing traders often use a combination of technical and fundamental analysis but mostly focus on the technicals.

The volatile nature of the cryptocurrency market makes it a great playground for swing traders if used correctly.

Candlestick Cryptocurrency Trading Strategies:

Shaved Bar Cryptocurrency Trading Strategy

Momentum is really useful when trading traditional markets, so why not use it with crypto trading? Shaved bar candlesticks can be powerful indicators of solid price momentum but need to be used in the right context.

To find out what exactly a shaved bar is and how to trade it in the cryptocurrency market, check this space for a link to an in-depth shaved bar strategies article. Don’t miss this one!

Learn more about trading with candlesticks.

Engulfing Bar Cryptocurrency Trading Strategy

Certain candlesticks contain powerful clues about the direction of order flow and where the price is likely to go. The mighty engulfing bar is one of them and marks levels where reversals are likely to occur. Engulfing the entire price range of the preceding candle says much about where the big market players are putting their money. More about engulfing bar crypto trading coming soon!

Pinbar Cryptocurrency Trading Strategy

The pinbar is one of the most profitable price action signals. Often called hammers or shooting stars (depending on the position and nature of the candles), pinbars are the ‘cherry on the cake’! Like with other financial instruments, a decent pinbar on a crypto chart is something you can’t afford to miss out on.

Watch this space for money-making pinbar trading strategies, coming soon.

Support and Resistance Cryptocurrency Strategy

Understanding support and resistance are pretty handy in the trading world, not only with forex, stocks, and commodities but also with the new kid on the block – cryptocurrencies. For example, when prior resistance turns into new support, we often encounter splendid buying opportunities in a strong uptrend. Check this space for a powerful support & resistance cryptocurrency strategy coming soon!

For more info on trading with support and resistance, follow this link.

Fundamental Cryptocurrency Trading Strategy

Cryptocurrencies are not all the same. Some are mined while others are created all at once and slowly released into the market. Some cryptos earn a type of interest when owned and some are tokens used by innovative development networks/platforms. Other considerations like the maximum supply of a cryptocurrency, alternative uses (other than being an exchange medium), can greatly influence its future performance.

The supply of a particular cryptocurrency usually plays an important role in its price. Bitcoin’s supply is limited to a maximum of 21 million units.

Of course, any important news concerning the development, regulation, and application of different cryptos can also have a notable effect on their price. Other price catalysts include weak points in blockchain systems, crypto hacks, scalability issues, etc.

Learn all about fundamental forex trading strategies right here.

Tackle the Bull (trend) by the Horns

Now that you know more about the different ways to trade cryptocurrencies, now is the time to get involved in this dynamic market. To get started quickly and easily, take a look at our top crypto brokers and compare the different benefits and features offered by each one of them. Take advantage of the powerful crypto bull trend today.

Moving Average Convergence Divergence Crypto Strategy

The moving average convergence divergence (MACD) strategy is ideal for trading cryptocurrencies. As a trend indicator, the MACD identifies when a market is in the process of completing a directional move in pricing.

To learn how to use moving average convergence divergence in crypto trading, check out our dedicated page on the MACD.

Relative Strength Index Crypto Strategy

For active traders, the relative strength index (RSI) is a valuable tool for identifying when a cryptocurrency is becoming overbought or oversold. As a momentum oscillator, the RSI is great for quantifying trend exhaustion and possible reversal points.

To learn how to use relative strength index crypto strategy, check out our dedicated technical analysis page on the RSI.

Bollinger Bands For Crypto

Created by John Bollinger in the 1980s, Bollinger Bands (BBs) are a favorite indicator for active traders around the world. BBs measure the current volatility of a cryptocurrency and are a good way to place seemingly random price action into a manageable context.

For more information on how to use Bollinger Bands for crypto trading, be sure to look over our technical analysis page dedicated to BBs.

Parabolic SAR Crypto Strategy

Developed by famous market technician Welles Wilder Jr., the Parabolic SAR is an easy-to-use trend indicator. Represented as a series of sloping dots above or below price, it is one of the simplest and most effective technical indicators.

If you’re interested in learning how to use Parabolic SAR crypto strategy on your favorite coins, be sure to click on the link above.

Cryptocurrency Technical Analysis

In the contemporary crypto marketplace, technical analysis is king. No matter if you are implementing a trend, reversal, or rotational trading strategy, technical analysis can help enhance your performance.

If you’re an aspiring crypto trader and want to learn how to perform cryptocurrency technical analysis, then be sure to visit the FX Leaders’ educational suite.