It is essential to know about yourself before diving into
crypto trading. An important question to ask is that what type of trader you
are? Because as it seems, making money in cryptocurrency may be an easy job at
times. But to make your crypto earnings sustainable and be a successful trader,
it is crucial to explore your potential and act as per your type of
personality. This blog is about the kinds of traders and the way they make
trades.
Image
by Gerd Altmann from Pixabay
In general, we can categorize cryptocurrency traders into the following four types of traders. Every kind of trader needs its skillset and approach for being successful.
Long-term traders
These traders aim to invest in those
projects/currencies that are newly launched or about to lunch. The aim is to
put money into such projects and hold it for a more extended period. These
traders make money because all currencies at the beginning have the lowest
prices. However, if the project is good and had practical implications, the price
rises significantly over time, and thus the investor made money. But, such trading
needs risk lovers, who have substantial financial resources. The traders must
have a vision, strategic thinking and patience. Mostly, such traders are all
those who were early adopters of Bitcoin, Ethereum and other stable currencies.
Swing traders
These traders are the ones who aim for
making money through the moments of cryptocurrencies prices. These traders
mostly do traders in days and weeks, sometimes in months. But their main
objectives are to enter the market, hold their position for a while to ensure a
profit and then exist. Such traders need knowledge about cryptocurrencies market
moments, trends, and moments of currency prices. These traders also need considerable
patience and must have a certain level of holding powers of currencies because
otherwise, they would not be able to carry trade for a more extended period.
These trading need a different mindset compared to long-term traders, day-traders
or scalpers.
Day traders
Day-traders aim to work daily and make
money every day. This model is similar to the 9 to 5 job model. In this model, traders
aim to start their day by entering the market and then try to exist it by the
end of the day while seeking a profit. Unlike long-term and swing traders,
these traders have to be more tentative and spend more time on screen to check
for all market moments. These traders
need more money, risk agility and patience. The day-traders need deep knowledge
of moments of the market. They must be aware of day-to-day happening around the
world that may influence the cryptocurrency market directly or indirectly.
Scalping
Scalping is an exciting model. In this
model, the traders aim to get profit in the market in a brief period. The
scalper set a short-term strategy. They enter the market, strive to achieve their
objective, and exit the market as soon as things go in their favour (or in the
opposite direction) within a short time, irrespective of the profit/loss. The
objective here is to make money in the shortest time. Scalping needs steel
nerves and high risk-taking behaviour with super in-depth knowledge of the
market moments. It is the trade of minutes and seconds. So it needs high nerves
and emotional controls. At the same time,
it's very risky, with a high probability of losses specially for new traders.
Every person has a different mentality, and no trader needs to become an expert in all kinds of trading. But a trader can make money in any trading model (or the combination of it) depending upon the skill set he had, the risk-taking capacity, the financial resources, the level of penitence and most importantly, the knowledge about the market trends, indicators and levels.
Image of yogesh more from Pixabay
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