I used to be a stock trader for seven years and now I'm a crypto trader.
Over the years I have developed some useful strategies that anyone can use to make money from any market. But with the volatility of the crypto market, there is this strategy that should be easy to do.
In the stock market, we call this sequential buying/selling strategy. I recommend this a lot by salaried persons who put aside a portion of their wages into stock investing.
Usually like, say, every 15th of the month clients have their salaries credited, say, for example, they get $3000. Now this client would set aside $300 for investing.
The Strategy
The broker will recommend a stock that's volatile (meaning a lot or actively traded on any given day) but fundamentally good.
The client puts in $300.
Say the client chose Stock A at $1.
The $1 price becomes the base price of action.
Every 15th of the month, depending on the movement of the price of the stock will the next action depend.
If price got higher by 10%, the action is sell, but client still deposit deposit his monthly pledge of $300.
Next month, the price was $0.95, so lower than $1, the action taken should be buy. Now, you have $630 for buying at 95 cents.
Next month, price was again higher than 95 cents, so you sell.
Let's say the next month, price got lower to 75 cents. You just buy again. Now, you have a buying at 95 cents and 75 cents.
Next month the price is back at 95 cents. At this point, you can sell all (due to averaging down and still ending up in the profit zone) or just the ones bought at 75 cents.
Let's say at some point the price got to $1.5, most likely you sell all.
Just repeat the process every time you take profit. You can stick to the same stock or you can look for another stock that is on the low range of their trading pattern.
Now I modified this approach to crypto since crypto can be more volatile, meaning can move with a wider range of price fluctuations upwards or downwards.
You can do this even not on a monthly basis. You can do this on a daily basis. Since crypto is riskier due to prices could plummet to the point of almost having a zero value, plus trading is 24/7, unlike stock markets where there is a close, so no respite in case a crypto is having a FUD or negative news. But again, as I have said, choose a coin with good fundamentals so that even when the price go to the netherworlds you are sure it's going to find it's way out of the netherworld because they have a use case.
Sequential buying on crypto would be like you have $1000 for investing. You choose one coin. Then you buy in increments of could be $50 or $100. With $100, you'd have 10 buying transactions, while with $50 you'd have 20 buying transactions. You can choose if you can buy or sell the every 4 pm Eastern Time or you can choose to buy or sell every 3 hours or every 5 hours or even every 30 minutes. Depends on how you can monitor your account and how volatile a coin is.
This is really a flexible strategy as you can change the amounts of your buy-ins. The important thing is you develop a disciplined habit of approach.
I hope this has been helpful. I will be sharing more strategies that you can use in trading cryptos.
Happy trading.
