Are you the type of trader that prefers to accumulate your assets over a long period to increase the value and earn more profits? Or do you prefer buying and selling cryptocurrencies for a short period of time?
Find out the various types of cryptocurrency traders and try and work out which one you are in the article below!
Five Types of Cryptocurrency Traders: Which One Are You?
Scalping traders are active crypto traders. Scalping requires spending more time online to monitor the market. Traders that perform scalping take advantage of the slightest change in the market. This type of trader speculates the trading fees on a variety of exchange platforms to ensure that their end profit is way above the exchange fees. This type of trader doesn’t think about long-term trade. Instead, they sell their assets in a short time to gain profit before a dip.
Scalping is without a doubt a profitable trading strategy and is regarded as an important skill for a trader. They are highly disciplined and focus on making quick deals and they focus on trading behaviour, market expectations and technical and fundamental analysis. They are also well-grounded in news and statistical background.
This is the basic type of cryptocurrency trader. Have you been trading cryptocurrency for a long time? You fall under this category. Traders under this category are not required to put more effort into monitoring the market. All they do is buy a cryptocurrency and leave it to increase in value over a long period. If you fall under this category, you must ensure that you don’t buy crypto during the wrong timing.
Traders under this category hold their assets even in times of price instabilities. They secure their investment when the value of their holdings has increased. This is to ensure that their initial capital is intact and the initial amount of cryptocurrency bought is secured.
Swing trading is a short-term trading strategy although it requires making careful decisions. Unlike other traders that are involved in long-term trading, traders under this category make decisions after monitoring the market for days.
After an opening is made, swing traders leave it for some time. During the period of waiting, the trader patiently monitors the market and any slight market fluctuations. They are experienced traders and more calculated because they have spent time studying the market fluctuations. They know that coins can turn bearish within a few hours and bounce back as soon as possible.
This type of trading is popular and valuable. These traders achieve constant positive results regardless of the position they trade in. However, they are only experienced because they have studied how to read candlesticks, run trading analyses and understand the market behaviours.
This type of person trades during the daytime when the market is still very much active. While they are looking for short-term profit, they invest long hours into trading. Most of the time, these traders use cryptocurrency trading as their main source of income and so, they are full-time traders with their entire focus on trading.
They are fully aware of the market volatility and price fluctuations at any time of the day. So, day traders start trading with smaller amounts to reduce risks. They monitor their investment each day and watch it grow. If you are the type that has dedicated your time to monitor the trade view and market trends, you might be a day trader.
These traders are majorly concerned with long-term investment. Traders under this category only invest, they are not concerned about monitoring the market or following the market trend. Cryptocurrency is not their main source of income so they don’t depend on it. However, they only invest after they have done detailed research on the market history and profit in holding cryptocurrency.
Position traders are inquisitive; while it is normal to do an in-depth study on their desired coin before investing, position traders do further research. These traders are more likely regarded as investors and if you are planning to make cryptocurrency trading a source of income, you don’t fall under this category. These traders are not interested in the news or any price update and don’t react to announcements that could affect the value of their assets.
These traders are so concerned with making huge sums of money that they invest recklessly. They invest in high-risk assets without an understanding of how the market works and they don’t follow market trends. While they are vulnerable, these traders hold profitable positions till the end regardless of the changes.
While you might have discovered the type of trader you are, you must understand your ability. Don’t hesitate to gather more knowledge to enhance your level of experience. Even if you are a beginner, you should try to trade in small quantities. Find yourself a profitable trading strategy and stick to it. Remember, never invest what you cannot afford to lose.