Do cryptocurrency investors use strategy?

By Srikanth
6 Min Read
Do cryptocurrency investors use strategy? 1

The modern world is a place in which technology plays a major role. For example, there is no doubt that we all rely on the latest technologies at home and at work. Modern innovations such as machine learning and big data have also transformed how many industries operate.


One tech innovation that has made its mark in the financial and investment world is cryptocurrencies. The headline-grabbing success of top examples such as Bitcoin have not only legitimized this as an asset class but also attracted more people to this market.

As a relatively new financial market, though, there are still a few questions that people looking to dip their toe into it will ask. A classic example is whether crypto investors use strategy when trading.

Do investors in cryptocurrency use strategy?

The simple answer is that all sensible crypto traders will use strategy to help them choose which coins to put money into, when to enter the market and how long to leave a trade open. This may, for example, include checking the latest cryptocurrency prices before opening a trade, or the breaking news around crypto in general.

But why is strategy so important for sensible crypto investing? In simple terms, using a strategy helps you trade in an organized, calm and rational way. It can also take the stress out of it, as everything you need to think about is set out in your strategy. This saves you having to constantly remember what to do each time you trade, or worry that you might have missed something important.

Crypto trading strategies can also save you a lot of time and this is key for people who may not be full-time investors. As everything you need to trade is clearly set out in advance, you can quickly get on with investing and make the most of your time. Whether your strategy dictates checking the Luna price for trading opportunities each session, or reviewing open trades first, it means you can get straight to work with no delay.

Which strategies are there for investors in cryptocurrency to use?

The first thing to understand is that all crypto trading strategies are driven by fundamental analysis and/or technical analysis.

Technical analysis involves looking at the latest price action charts and using online technical indicator tools (such as moving average) to discover trading opportunities. If SLP is a coin you plan to invest in, for example, checking out the latest Smooth Love price would play a role here.

Fundamental analysis, on the other hand, is more concerned with how the latest financial, global and political news impacts the price of any one coin or the crypto market in general. This would usually entail catching up on the latest cryptocurrency and world news at the start of each trading session.

What specific strategies can you trade with?

Although the above sets out the underlying principles that many crypto strategies use, you may still be seeking actual strategies to follow.

For those who like entering and exiting trades on the same day, day trading could be a good option. The aim of this strategy is to make money from price movements that happen within a single 24-hour period. This strategy will usually make heavy use of technical chart analysis and analysis of price movement to look for opportunities.

Swing trading and scalping

Another popular trading strategy is known as swing trading. This involves holding open positions for up to a month, in a bid to ride out any short-term bumps in the market. This is a strategy that is ideal for people who have plenty of patience to let trades play out. In addition, it is a good strategy if you cannot devote hours to trading each day or cannot sit around watching the markets all day. Swing trading typically uses a mixture of both fundamental and technical analysis to look for opportunities.

The last major strategy for crypto investing is known as scalping. This is a short-term strategy that aims to gain lots of small profits in one trading session. Due to this, positions are only kept open for a short period – usually from a few seconds up to a minute.

This is an approach that can make more use of fundamental analysis, as the market moves being exploited are often driven by these factors. Scalping is usually best for people who enjoy high-frequency trading and have a few hours each day to sit in front of their computer.

Crypto strategies come in handy

As this discussion shows, strategy is something that is used in cryptocurrency investing. It is also something that is as vital to crypto investors as the blockchain is to cryptocurrency in general. While this might surprise some people, who think this market is more random than that, it is nevertheless true.

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