As 2018 slowly moves to an end, it’s time to estimate the results of this year for the crypto industry. It has been a difficult and challenging time, as bears have been controlling the market. Bitcoin crashed down to $3,745 on November 24th, while many experts were expecting the number one crypto to start recovering at that time. All major coins face similar problems and show red downtrends during the third and fourth quarters of 2018.
Some crypto enthusiasts were lucky or persistent enough and earned some good money on trading during this crazy period from astronomical highs in December 2017 and January 2018 to tremendous falls in November. Let’s see what were the most beneficial strategies. After choosing a suitable method, check the details on CryptoHoo.com to find a proper platform for trading.
Crypto trading styles
There two large categories: short-term trading that takes from a few seconds to a week and long-term trading that lasts for weeks, months, or even years. Each approach can be divided into smaller types that we’ll describe further. Some of them are better for the bearish market, while others work fine during the bullish run.
Short-term trading
Short-term traders keep their savings for small periods of time, and their funds are always involved in active exchanging processes. Usually, these crypto owners focus rather on price speculations but not on the practical use of coins. Short-term trading requires way more attention, knowledge, and luck.
Here are the main approaches of short-term trading:
- Scalping. Scalpers monitor the smallest market changes like portions of a percent.
- Day trading. This means trading during a day, trying to profit on small price fluctuations.
- Intra-day trading. Users don’t limit themselves to the same-day actions and may wait for several days. It is generally advisable to combine both day and intra-day
Long-term trading
This style of trading stands for focusing on the long run from weeks to years. The main idea behind it is the inevitable growth of cryptocurrencies as progressive assets. Most of the long-term traders strongly believe in blockchain and decentralization that come with crypto.
Here are the main approaches of long-term trading:
- Swing trading. This is the process of catching waves or repetitive periods when prices regularly increase and decrease. The goal is to predict local lows and highs. This trading requires a solid technical analysis.
- Position trading. After buying coins, users stick to their positions for weeks or months.
- Investing or hodling. This approach is about focusing on the practical value more than on prices and local profits. Investors buy coins and simply wait for significant returns that might happen in months or years.
The most successful traders
There’s also a division related to long and short positions. Long traders bet on the growth, while short ones try to predict falls. It’s clear that both players may choose any of the trading styles described above.
2018 has been full of local pumps and dumps, but the general trend shows the significant fall. That’s why investors with short positions focused on long-term trading were the most successful. Let’s say, the 81% difference between $20,000 for 1 BTC in December 2017 and $3,700 in November 2018 brought a $16,300 profit per coin for short traders that had managed to catch the best moment for selling their Bitcoins.
Day traders with long positions got benefits as well. John Omar claims that day and intra-day styles work even better during the bearish market as it becomes easier to find small movements regularly. During the more or less stable market, the key is to trade small to medium sums because large positions may exceed available trading volume on the exchange.
Both scalping and swing trading were useful during 2018. High volatility is desirable for all scalpers as they can make significant profits extremely quickly. Only hodling was painful, but long-term investors know how to deal with yearly falls – they patiently wait for new highs.
Also, every successful trader, regardless of their style and preferences, follows the basic rules that instruct not to panic, diversify portfolios, use advanced tools on the platforms, and hold some of the major coins no matter what is happening on the market.
Final predictions
Long-term short positions and short-term day trading were probably the most profitable approaches during 2018. Scalping and swing trading were also beneficial but required more luck and functional analysis.
As for upcoming trends of a final quarter of 2018, Cointelegraph’s report reveals that experts are full of hope. Jeffrey Sprecher from NYSE claims that cryptocurrencies will undoubtedly survive and reach new heights, while Bakkt’s CEO Kelly Loeffler and Nasdaq’s representatives mention that crypto futures trading will bring more institutional investors to the market. Bitcoin ETFs are highly discussed as well. What trading styles will be demanded in 2019 remains to be seen.
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