Did you know that you can use your Forex strategies in crypto trading as well? Usually, market trends are cyclical. So, a cryptocurrency can be boring at times, then turn hot and have a very long and strong trend.
If you trade forex with top-rated forex companies and you take advantage of the hot and cold trends strategies, you’ll be happy to know that you can do the same thing if you trade cryptos. In this article, we will take a look at some forex trading strategies that can be used in crypto trading.
- Range Trading
There are times when the market does not have a direction. In Forex trading, this is not exactly unusual. It may happen because the two countries may be very strong trading partners and, as a result, they may have very similar trends.
But ranges can also appear in crypto. Basically, the cryptocurrency market may try to consolidate gains by trading sideways following a very long and strong trade. Long traders will end up closing out setting up the following large advance as they become annoyed at the sideways consolidation.
Sometimes, trading volumes are low – therefore, there are not enough buyers and sellers to push the market.
- Day Trading Smaller Trends
You can trade cryptos whenever you want. This is because crypto trading is available 24 hours daily. Those who do day trading check out the developing big trends and the news as soon as they wake up. Next, they will set up entry and exit points according to the charts’ shorter-term trends.
Usually, day traders open and close trades within one or two days. They keep doing this all the time in order to collect parts of the larger trend. As a result, their account balance increases.
So, if you’re addicted to crypto trading, you can use this strategy there.
- Passive Income
Another popular strategy in forex that also works in crypto trading is the passive income one. Before the Great Financial Crisis of 2008, many forex traders were engaging in carry trading. Basically, they would have a currency with a lower interest rate that they would exchange in order to purchase a currency with a higher interest rate. The difference between the interest rates of the currencies allowed traders to earn interest.
In cryptocurrencies, you can also earn passive income similarly. You can stake a cryptocurrency after purchase in order to earn interest. So, you can get interest in the native token whether the crypto’s value increases or decreases.
- Swing Trading
You can also take advantage of swing trading, especially if you’re newer to crypto trading. What makes it great is that you don’t have to sit and keep an eye on the market all the time. You just set your entry and exit level, then turn off your monitor and go do something else.
In crypto, you can also use swing strategies with the help of technical indicators like RSI, Stochastic, or MACD.
Just like forex, crypto will also have hot and cold trends. Make sure to use these strategies for crypto trading that pays off.