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Types Of Cryptocurrency Trading



Types Of Cryptocurrency Trading

Cryptocurrency trading has increased over the past few years, which has attracted many new investors. Before people start trading, they need to understand the types of crypto trading to know which one is the best for them and which will give them the best returns.

Many traders choose the type of trading depending on whether they want to do long-term or short-term trading. Long-term traders buy coins with the cheapest value hoping that their value will increase over time.

Short-term traders, on the other hand, are all about instant gains. Short-term trading is a good option for people who have experience and time for analysis and are well-informed about current market trends.

It also has an advantage over long-term trading because the investors react quicker to market changes reducing their losses. The main types of crypto trading include:


Holding involves buying coins and letting their value increase over time without making any changes regardless of the market changes. This type of crypto trading requires traders to have emotional intelligence and patience. Traders get to determine the period they hold their assets.


This type of trading involves buying and selling assets within a short period. It is one of the most involving and time-demanding types of trading and a good option for traders who don’t have the patience to wait for assets to increase value.

Traders need to check and understand every market change and trading fee. While the profits are lower, traders are safer from incurring huge losses.


This is also a short-term trading option, but traders have a specific target, unlike scalping. They do not react depending on market changes but react based on their long-term goal.

They analyze the past and current asset market trends to determine future trends. They also use different market tools to determine future asset prices.

Day trading

This type of trading involves holding the assets for a short period depending on price movements. These traders trade on the most active market hours and limit each of their stakes. They are devoted and always look for market trades that affect asset prices.

Position trading

This is similar to swing trading but more in-depth. Before investing, traders study the asset market and keep their eye out for long-term gain. Unlike other traders, they don’t follow market charts and trends but use the asset’s white paper.

They also observe other assets’ performances and market factors, and they only trade when they are assured the asset will give them a long-term return.

Bull traders

Bull traders invest in coins with a rising value and only invest in assets with a fixed leading position. They hold on to the assets as long as their value keeps increasing, then sell them when the growth stagnates.

Bear traders

These traders buy assets when the values are low and sell them when their value increases and their demand increases.

Whale traders

These are traders with over 1000 BTC in their wallets and are the most powerful ones in the Bitcoin system.

They have mastered market trends and understand the emotional and psychological decisions to control the market. They can initiate price changes, which they use to lower the asset value, causing other traders to sell. They then buy those assets at low prices and wait for the value to increase.

Anyone can trade in cryptocurrency, but one question you have to ask is ‘how do you mine cryptocurrency’. Mining is the process of bringing new coins into existence.

According to the experts at SoFi, Bitcoin mining has become increasingly difficult and expensive, which forces people to use mining pools. There, traders pool together their resources, increasing their odds of mining a block and getting rewards.