Some platforms call this software cryptocurrency trading robots, or EAs . Cryptocurrency software is incapable of making emotional trading decisions and is instead designed to adhere to predetermined trading conditions. This advanced software is able to scan multiple global markets, 24 hours a day, 7 days a week. Crucially, if you actively trade cryptocurrencies cryptocurrency for beginners via CFDs you will be required to pay a daily fee. With that in mind, it’s important that we run through fees you might be liable for when you join an online cryptocurrency trading platform in the UK. As you can see this makes Bollinger bands a great tool for traders, when trying to predict the volatility of a cryptocurrency pair.

After all, the idea is to capitalize on market moves through a few days. Utilize other technical indicators to identify a trade setup and define the market entry. This process first calls for the correct identification of opportunities. The next step is to define trade parameters and enter the market. Swing traders can target corporate stocks, futures, and other contracts. This strategy is the process of acquiring securities for capital appreciation over a significant period of time.

The first thing to query about when looking for the top cryptocurrency broker is how safe the websites and the servers are. No matter how good your strategy is, without a reliable broker, you will still lose. This will allow you to make sure that it is indeed the right product for you and whether you want to actually trade on it. Once you are complete then you create a live account and start trading. You have to find a broker that is fully regulated, has the assets that you want to trade and had an effective platform. You can read more about them in this IQ options cryptocurrency review. With the other 30%, I make short to medium-term bets on coins which are undervalued or volatile.

cryptocurrency trading strategy

With that in mind, we are going to run through cryptocurrency to fiat pairs and how that trade works. UK cryptocurrency trading platforms tend to split pairs into 2 different categories.

You could determine price levels you’d be happy to buy-into your cryptocurrencies at (i.e. ‘buying the dip’). If you’re intending to HODL a cryptocurrency for the long-term, you need to be confident about where you’re putting your money and have a rationale for why it’ll increase in value. As I’ve already touched on, most cryptocurrencies (90%+) are going to collapse. Their solution might become redundant, another cryptocurrency might do a better job, critical members of the team might level the project, etc. HODL itself is cryptocurrency slang which originated when an BitcoinTalk user made a post where they misspelt “HOLD” in the face of falling Bitcoin prices in 2013. The majority of cryptocurrencies (90%+) aren’t going to survive.

Bitcoin Billionaires

Once you’ve trialled your strategy and ironed out any creases, then start executing trades with real money. On top of the possibility of complicated reporting procedures, new regulations can also impact your tax obligations. The U.S, the ‘property’ ruling means your earnings will now be deemed as capital gains tax (15%), instead of normal income tax (up to 25%).

The exchange will act as a digital wallet for your cryptocurrencies, so don’t dive in without considering the factors below first. CFDs and FX are complex instruments and come with a high risk of losing money rapidly due to leverage.

Trend following strategies use technical analysis to predict the direction of market momentum. Trend trading bitcoin involves opening a position when you believe that the digital currency’s price will continue to move in its current direction or is about to form a new trend. A trending market is one that reaches consistently higher highs or lower lows.

Bitcoin Spread Betting

For example, with over 7,000 cryptocurrencies on the market, it is impossible to know everything about all of them without automated assistance. Day trading is when someone who buys and subsequently sells financial instruments like stocks, cryptocurrencies or futures within the same trading day. This, along with other forms of regular trading, used to be the sole domain of the professionals in the City and on Wall Street. Between 74-89% of retail investor accounts lose money when trading CFDs.

See full non-independent research disclaimer and quarterly summary. If you decide to buy bitcoin, you would do so via a cryptocurrency exchange. You would Bitcoin take ownership of the coins themselves and keep them in a digital wallet, in the hope that they increase in value and you can sell them for a profit.

cryptocurrency trading strategy

11 years ago no one could have predicted that digital currencies would become so wildly popular to trade. In 2020, daily trading volumes in the cryptocurrency trading strategy cryptocurrency market often surpass the £70 billion mark. Want to learn to trade cryptocurrencies in the UK but don’t know where to start?

What Does The Future Hold For Bitcoin?

This will depend largely on the amount of time you have to commit to trading activity and market analysis, and how quickly you’re looking to turn a profit. 75% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

You should consider whether you can afford to take the high risk of losing your money. To trade cryptocurrencies you must first sign up with a broker offering cryptocurrency rate crypto pairs. You then need to speculate whether the price is going to rise and fall. feature offered by a few trading platforms is a game changer.

  • If you like the idea of being able to trade any time the mood takes you – then crypto trading would enable you to do that.
  • The cryptocurrency markets, however, are open for trading 24 hours a day, 7 days a week.
  • The FCA broker allows you to invest in cryptocurrencies as well as trade fiat-to-crypto and crypto-cross pairs.
  • After identifying a local high, a swing trader adjusts his position to what is alleged as shorts.
  • The trader stakes against the price and disposes of his crypto holdings.
  • If you’re ready to get started with a cryptocurrency trading account right now, we would suggest exploring eToro.

Bollinger band techniqueThis requires the Bollinger band technical tool at default settings. This tool gives you visual representation of what may be the place where a price may bounce. Trading strategies ensure consistent results over time by preventing financial biases caused by behavior of the trader. The last thing one needs is a trade made based on their emotional behavior, which will mess up some and sometimes all of the account, be it profit or capital.

Place Your First Trade

Much like in the case of forex, cryptocurrencies also have a wide scope of market interest and value. A great place cryptocurrency trading strategy to find the up to date value of crypto coins is to head over to CoinMarketCap, or a trading platform such as eToro.

cryptocurrency trading strategy

Learn how cryptocurrencies work – and discover the wide range of markets you can spread bet on – with IG Academy’s free ’introducing the financial markets’ course. This information has been prepared by IG, a trading name of IG Markets Limited.

» Visit Review 67% of retail investor accounts lose money when trading CFDs with this provider. Online you can also find a range of cryptocurrency intraday trading courses, plus an array of books and ebooks. The more information you absorb the better prepared you’ll be, and the greater chance you’ll have of maintaining an edge over the market. Secondly, they are the perfect place to correct mistakes and develop your craft. You’ll usually be trading with simulated money, so mistakes won’t cost you your hard earned capital.

Open An Account With Your Crypto Broker

Please find below a list of the most important technical indicators available to cryptocurrency traders. We have put together a brief explanation of each type of indicator, however please note that there are heaps more available. However, by at least trying to gain a firm understanding of the most important tools – you will find the decision-making process of cryptocurrency trading in the UK a lot easier. Market corrections are used in all markets and can last anywhere from days, weeks, or even a few months at a time. Fundamentally, it is when a trend is ‘halted’ on a temporary basis. By now you should be fully armed with all of the information you need – in terms of how cryptocurrency trading in the UK works. Now that we’ve gone through the advantages of cryptocurrency trading in the UK, it’s only fair that we divulge the disadvantages as well.

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