Crypto trading with Binance requires an in-depth understanding of the digital assets market and its platform. Binance offers an array of cryptocurrencies with attractive options and features to give you access to the volatile crypto market.
Aside from being the largest crypto trading platform globally, trading crypto using the platform is challenging. You might need some lessons to navigate it and leverage the influx of cryptos in the market and price action.
In addition, you must equip yourself with profitable strategies for digital trading assets. According to WP Dev Shed, you can trade on autopilot by using bots to search for opportunities to capitalize in the market through Binance.
This article will highlight the seven best crypto trading strategies on Binance. Read on to explore these tips.
- Range Trading
In crypto, range trading borrows the same concept from the traditional financial markets. The market price action will shuttle between a crypto chart’s resistance and support levels. Such price movements signify the exchange of dominance by buyers and sellers of cryptos in the market.
So, adopting a range trading strategy will mean looking at the stock chart program on Binance and aligning it with chart indicators such as the Stochastic Oscillator and relative strength index (RSI). The combination of the two components will help determine the best trade opportunities.
Scalping is a tricky strategy that involves creating a cycle of entry and exit from the crypto trading floor. You want to capitalize on increased trading volumes caused by short-term price fluctuation in the crypto market.
Therefore, you must understand the underlying factors that can shake the market price into action, such as news releases. Scalping in Binance can be profitable considering the low leverage it allows for traders on the platform.
Arbitrage is a dynamic strategy that entails buying crypto while the prices are low in one exchange and selling it high in another exchange. The arbitrage strategy develops since new exchanges are forming to get a piece of the digital innovations.
You can take advantage of arbitrage trading by holding a portfolio in Binance and looking for market inefficiencies in the crypto ecosystem. However, this strategy can be low risk, but exchanges will charge service fees for all your transactions.
- Reversal Trading
Reversal trading is an advanced strategy that requires a keen eye on market structure formation. It means spending time looking at the charts provided by Binance to spot market reversal patterns.
Aside from the technical analysis of trade opportunities, your entries must be perfect for collecting profits once the reversal is complete. If, for instance, the crypto market was bullish, you’ll wait for a U-turn at the top of the candlestick formation.
- Momentum Trading
You have an opportunity to capitalize on the market swing waves as it moves the price high and low. Momentum trading is simple yet risky since the market volatility can cause an abrupt change in direction.
Using a momentum trading strategy requires an in-depth understanding of the course of market price action. In addition, you must pay attention to the trade volumes you enter because the market swings can catch you off-guard and on the wrong side.
- Follow The Trend
If you’re looking for a risk-averse strategy, following the trend can be a good plan. It entails speculating on market trends and determining how long it’ll be until another trend starts.
You can pivot your trades to follow each trend in the crypto market and exit when the market changes its direction, according to Investopedia. The direction can take a whole day or longer to form and may require patience.
- Buying The Dips And Holding
The cryptocurrency market can experience ups and downs similar to the traditional financial markets. Such actions result from fundamental issues, such as news that affect cryptocurrency prices.
Buying the dips and holding is a long-term trading strategy since the market prices will change over time. And if you buy dips, you can sell higher and collect profits depending on the volumes you purchased initially. For instance, the recent price changes of Bitcoin shocked the whole market by reaching an all-time high of USD$ 68,000 and later dipping to USD$ 35,000. If you bought BTC during the dips, you might want to hold and wait for prices to change. The chances of BTC surpassing the mark set last year are high.
You can use several strategies for crypto trading with Binance, and you just need to learn how the crypto markets work. Adopting a strategy without backtesting can endanger your portfolio, and Bloomberg recommends backtesting. The crypto market is speculative, and it experiences high magnitude volatility that can wipe out your account. In addition, the exchange platforms you choose can impact your crypto trading business. So, research first before opening a trading account.