Every AvaTrade user can easily earn on cryptocurrency trading, if he is really interested in it. It’s not a secret that the yield trading on cryptocurrency exchanges can compete with the most risky operations on the forex exchange. In just a month, you can double and even triple the money invested, but the risk of losing all the funds on the deposit is also very significant. The cryptocurrency rate is unstable, the ups are replaced by falls and in order to save and increase money you need to adhere to certain patterns that sound like cryptocurrency trading strategies.
But, to tell the truth, you don’t need to use a special strategy for cryptocurrency on AvaTrade. Probably, you’re surprised, but this is true. All strategies can be effective, they can all be applied with equal success on any assets. But the main secret actually lies not in the strategy itself, but in how exactly it is used.
How do Cryptocurrency Differ From Traditional Notes and Coins
Most novice traders are interested in the main difference between cryptocurrency and traditional money. First of all, traditional notes and coins are issued, printed, and controlled by central banks and governments. But cryptocurrency is a fundamentally new phenomenon in the global economy. It’s possible to say, that 20 years ago nobody could imagine that such unusual currency would exist in the world. These assets are decentralized, that is, they do not belong to anyone in essence. There is no Bitcoin central office, or some similar things. In this regard, the price cryptocurrency is determined by some special laws. This means that transactions made by cryptocurrency users aren’t supervised, regulated or audited by an authoritarian body. It means that cryptocurrency price chart significantly differ from the traditional asset charts.
Moreover, this type of currency has different minimum transaction period which is 5 minutes. Here you will not be able to trade minutes and use scalping, you will have to learn how to make long-term trades, and it will be more difficult to wait the signals. It’s also important to note that sometimes the payments can go down to ten percent for cryptoactive assets. This must be treated with the utmost care.
What Trading Strategy Should Be Used?
If your aim on AvaTrade is to trade cryptocurrency, you should not worry too much and look for some particular and complicated strategy. All you need is to trade like before, but with minor adjustments.
- First of all you have to reconfigure your trading schedule for a shorter time if you are going to trade for five minutes.
- Secondly, do everything the same way as before, but do not trade in currencies that change value of payments too dramatically. Often this happens on a crypto index. Now you have 50% of profit, in a minute you have only 10%. If you see this trend, switch to another asset. Do not go against the market.
- If the main traders on the stock exchange headed for a fall or there are persistent rumors that this or that crypt is declining, then you should not go against all. No need to buy when everyone is selling or buy the currency, when its rate is clearly at peak. Thus, you will not achieve anything and only lose all the money.
- Buy cheaper, sell more expensive. It would seem that this is an obvious advice, but many novice traders do not even understand this and trade incorrectly. Naturally, it would be unwise to acquire Bitcoins at a price of $ 20,000 per coin. But buying them at a price of $ 13,000 would be a very good investment. It is worth buying only that crypt, which is in the “red” zone, and selling that, which is in the “green” zone. Such a simple cryptocurrency trading strategy on the exchange can save you from losses with a 99% guarantee.
- Do not trade for last money. If you have a modest savings, then you should not deposit all your money. Trading on the stock exchange is always a risk and there is a chance of losing savings. In addition, if you invest all your money, such trading can not be calm and deliberate, and nervousness in a crypto exchange always leads to negative consequences. Think of it as the main strategy in the market – trading with a cold mind.