Traders can make money at a bull market and a bear market. Making money in a bull market is easy; you buy a coin at a price and make a profit! In a bear market, traders can make money through the shorting process (sometimes referred to as “margin trading”). Shorting in cryptocurrency trading is the sale of currencies at a high price through the currencies of a third party (usually through the exchange of cryptocurrencies) and the purchase of the currencies at a low price in the open market. In this way, traders want to return all currencies they have borrowed and receive their own profit.
Major types of traders
Perhaps the most active way to trade, scalpers buy and sell many times a day, with the goal of scalping or making a small profit on every operation. The exchange can be as short as seconds or even minutes! Scalpers rely on frequent, small winnings to earn a cumulative profit share at the end of the day. The Scalpers tend to make a large number of dozens or hundreds on exchanges in one day.
- Day traders
Day traders conduct transactions within the day and close the position at the end of the day. Frequently, day traders have no overnight positions. Each trade could last minutes and constantly monitors price anomalies.
- Momentum traders
At the time of trading, the momentum will continue in the same direction (either up or down). Momentum traders aim to ‘ride the wave’ by executing short-term positions across a particular market direction; buying at a low price in an uptrend and then selling as soon as prices start to break the momentum or selling at a high price in a downtrend and buying back at a lower price. This requires a good understanding of market conditions and a pronounced sense of time. The waiting period for Impulse trading may vary from time to time.
- Swing Traders
Swing Trading is a strategy that takes advantage of a coin’s short-term price swings, The technical analysis is potentially explosive in a particular direction within a short time.
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