What is the Altcoin Trading?
Altcoins are the alternative of bitcoin such as Ripple, Ethereum, Loopring, etc. Crypto trading is just like the forex trading where buying and selling are done of the coins, but any authorities do not regulate it like the forex market. Bitcoin was leading the crypto market, but now altcoin trading is gaining popularity rapidly across the globe.
Altcoin trading has proven a productive source of money-making for many traders. However, altcoin trading is not like where you start trading and start making money from the first day, for that trader should know the dynamics of cryptocurrency markets as crypto trading might be risky.
Many traders have become millionaires in crypto trading, but at the same time, an equal number of traders have lost their money. To become a successful altcoin trader, one should understand the concept of altcoin trading and its trading strategies.
Crypto market is highly volatile, and to become successful, we are stating some of the top trading strategies and tips.
Trading strategies and tips
Before understanding types of trading strategies, first, understand the altcoins. These are the alternative for bitcoin. Bitcoin waste a lot of time during mining, so to reduce the time altcoins were created. Also, the exchange charge of the bitcoin is high, so the makers want to change this; therefore, they invented these altcoins.
Trading altcoins means exchanging the coins. The traders get charged for their exchanges by their brokers. Brokers offer all the trading tools and market analytics for all the cryptocurrencies listed.
There are many different altcoin trading methods; we are listing the top two methods which are favourable for the beginners. By understanding these strategies, novice traders can earn a fair amount of profits at the beginning of their trading career.
Short Term Trading Strategy
In this trading strategy, the traders buy the altcoins and hold them for a brief period like a few minutes, hours, days, sometimes for a month. The objective of the short term is to make small profits on every trade and then combine them. Many successful traders consider this as full-time work; therefore, it’s an essential strategy to become a master in altcoin trading.
Short term trading majorly depends on technical analysis and the news which can move the prices of coins for the short term. Traders choose such coins which are highly volatile for short term trading.
Benefits of short term trading
The significant benefit of short term altcoin trading is traders can make reasonable amounts of profit. Unlike the other traditional currencies where the price movement is rarely over 1%, altcoin price movement can be doubled in some hours or overnight.
Long Term Trading Strategy
In this trading strategy, the traders buy the altcoins and hold them for an extended period like a minimum of six months or year. One of the good examples of this strategy is traders who bought bitcoin in 2009 at 1$ price and sold in 2017 at the price of $19000.
Benefits of the Long term trading
The real benefit of long term trading is that it is straightforward. It does not require a lot of time in execution. Just traders have to buy and hold it for an extended period compared to short term trading in which a lot of time is required.
The other significant benefit of this method is traders do not require a lot of capital to trade altcoins. Traders can progressively buy the altcoins whenever they want to expand their portfolio.
Some Important Tips for Trading
The volatility of altcoins can help the traders to make a good profit, but at the same time, it can cause colossal loss. To avoid this, traders must know the basics of altcoin trading.
Avoid influence by others while trading.
One should avoid getting influenced by the news, videos and some contents, especially which are not given by the experts. Interestingly, most of these contents are there for promotion and to attract traffic. Before applying, traders should analyse the news and content appropriately.
Only invest the funds which you can afford to lose.
This point is significant; traders should avoid borrowing the money for investing in trading due to its volatility. They might lose the money, and this will lead them into debt. Market palyers must do excellent financial planning before starting trading.
Avoid investing only in one single altcoin.
Even if traders have preferred the altcoin in the market, it might be risky to put all the funds in the same altcoin; traders should diversify their portfolio by trading different altcoins based on their returns and performance.
How to start Altcoin Trading?
To start trading, traders must have to open a trading account with a suitable broker, which can provide all the services and trading tools. While choosing the right broker, traders should analyse the information of the broker correctly about its services and safety of their investment.
ROInvesting is the best altcoin trading platform for all types of traders from beginners to pro level. It offers dedicated services and research tools for analysing the crypto market and helps traders to become successful in trading.
With ROInvesting traders can open accounts and start trading instantly with a dedicated trading platform, where all the trading process can be done in one click.
Traders have to fund the account and select the coin in which they want to trade, all the buying and selling price will be shown on the trading platform, they can also set the different size of the trades and even apply the stop loss.
After opening the position, traders will have to monitor them at a regular interval, and they can square off the position when they would like to book the profit.
Altcoin trading has become the new earning option due to the increasing popularity of the crypto market. However, it’s quite similar to forex trading. It comes with a few complications because of the risks involved due to its high volatile nature.
Therefore, traders who want to trade altcoin should learn all the fundamentals and dynamics of the crypto market properly.
You can explore more about different trading assets and their different trading strategies in our blog section. Always try to trade different assets to build a healthy portfolio.