Low-Fee Strategies: How to Minimize Costs and Maximize Profits in Crypto Exchange
- 3.1 Swing trading
- 3.2 Volume Weighted Average Price (VWAP)
- 3.3 Cryptocurrency futures trading strategies
- 3.4 Spread trading
- 3.5 Bot trading
This has been a significant year for the cryptocurrency market, as more investors worldwide have become interested in digital assets and blockchain technology.
But many people feel fear and risk associated with this new financial sector and have a lack of understanding of its characteristics.
In 2023, successful cryptocurrency trading requires the right strategy, knowledge, and tools. You can exchange cryptocurrency with Quickex to maximize profits on crypto transactions.
Strategies for Investors
The long-term perspective for any trader is to improve the ratio of successful to unsuccessful trades. Opening one successful order should not become the basis for future decisions.
A trading strategy is usually understood as a set of rules that a trader follows when opening orders on exchanges. Such a system blocks several sets of rules related to different areas of the investment business.
Another definition of a stock exchange trading strategy is a set of algorithms and technical analysis rules which help predict the market price formation dynamics.
Both definitions are correct and allow a wide range of trading systems and approaches to be described. In cryptocurrencies, conditions are somewhat different from those encountered by traders in the forex or equity sectors. The effectiveness of some traditional methods is lower when dealing with digital assets.
Understanding cryptocurrency trading
Cryptocurrency trading is the process of buying and selling digital currencies for profit. But it also involves a lot of risk. Successful trading requires a good understanding of the market and how it works and the ability to find and take advantage of opportunities.
Before you start trading cryptocurrencies, consider a few essential things.
First, the cryptocurrency market is very volatile, meaning prices change rapidly. Therefore, traders must be able to react quickly to changes and execute trades accordingly.
In addition, there are many different cryptocurrencies to consider, each with advantages and disadvantages. Therefore, before trading, one should study each digital currency and choose the most suitable one.
It is also essential to be aware of the risks associated with trading crypto, such as scams and hacks. Therefore, you need to be careful and choose reliable, secure exchanges.
If you are interested in trading cryptocurrencies, you must find a suitable cryptocurrency exchange and create an account.
After confirming your account, you can start to buy and sell cryptocurrency, but before you do that, you should do your research and only trade with money you can afford to lose.
Crypto trading strategies
This method looks for moments when the price reverses due to a change in the general trend or during a correction. Many technical analysis strategies are suitable for swing trading.
Most of them are based on the use of volume indicators:
Volume RSI or VRSI
It is an indicator that tracks trading volume and changes in the average price in a specific section of market history. It works like a regular RSI.
The Money Flow Index (MFI)
It is widely used to track volume changes to determine when it is overbought or oversold.
Volume Weighted Average Price (VWAP)
Traders widely use the VWAP indicator to determine the best time to open an order in anticipation of a trend reversal. The indicator compares price trend data for a given section of the price chart with trade volumes to identify when the current trend is losing strength.
Cryptocurrency futures trading strategies
Cryptocurrency-based financial derivatives have appeared recently, but have immediately come into the spotlight of speculators and private traders. The essence of cryptocurrency futures is the same as any other futures – the holder undertakes to complete a contract to purchase a given amount of assets by a specific date.
Futures are widely used in resource and product trading but can be good tools for dealing with complex financial assets.
The crypto industry predominantly uses two types of futures:
A non-renewable contract to buy a given amount of cryptocurrency by the expiration date.
These contracts are renewable as soon as the asset purchase requirements are met. They can be held for an extended period.
Derivatives trading takes a slightly different approach to trading. Technical analysis is critical, but there are also effective ways to mitigate risk, allowing traders to take higher-risk trades without fear of losing their entire portfolio.
Spreads in futures allow traders to optimize risk by opening two opposing market positions on the same or two different assets. They are divided into two types:
Intramarket spread trading means buying two comparable assets. Intermarket spread trading with a choice of futures with different expiration dates for the same asset.
It is a cryptocurrency trading strategy that uses software to automate trades. Traders who employ this strategy seek to exploit market conditions to make profits. However, this method also requires significant capital and can be pretty risky.
Tips to minimize costs
Explore different trading strategies to choose the one that works best for you. Consider risk management, market analysis, technical indicators, and more.
Develop a trading plan
Have a plan outlining how to approach the markets and when to buy/sell. Your plan should include the coins you are interested in, your profit targets, and your risk management strategies.
Choose a suitable exchange
Before you start trading, choose a reliable and safe exchange, like Quickex. Do your research to find one with low fees, good customer service, and a wide range of coins/tokens available for trading.