Five proper trading strategies for trading crypto during turbulent periods – part 2/2
This video will touch upon three more ways of dealing with turbulent periods of the crypto market.
Following the Trend
If you did your research and concluded that trend would continue for a while, or if it is too hard to predict when the price will change its direction, following the trend is a more risk-averse strategy. With this strategy, you should trade with the trend rather than trading with the swings. If the market is trending up, open only long trades. If the market is dropping, open only short trades. Trend followers start trading only after a trend has been established, while they exit when the trend changes. This trading method is also called “Position Trading.”
There is quite a number of tools that you can use to maximize profits as well as to minimize risks. These include margin trading, leverage, and stop-loss orders.
Advantages: Strategy such as following the trend is more of a risk-averse strategy. It works if the market, whether the market is going up or down.
Downsides: Crypto markets are unpredictable, so you will need good mechanisms put in place to protect against sudden changes in price direction.
Investing in Staking Coins
Employing this strategy will require doing some serious research.
Staking coins and tokens are the assets that perfectly align with the diversification goal an investor might have, as they generate staking profits over time. All you have to do is to buy them, lock them and stake, therefore becoming a validator node in their network. Validator nodes receive rewards for generating new blocks and securing blockchain networks. There are many staking coins and tokens out there, such as DASH, NEO, Lisk, Qtum, etc.
Advantages: This investment strategy doesn’t require any additional maintenance from you.
Downsides: You are still exposed, to some degree, to the ups and downs of the market.
Investing in a Tokenized Crypto Fund
If you want to collect some form of profit from all of the strategies mentioned above, you should opt for tokenized crypto funds.
These funds are pools of investor capital that are managed by a team of professional investors. Fund managers use a range of strategies to earn returns on all of the capital within the fund. Investors that join the pool benefit from having access to the skills professional traders have, while the professional traders benefit from having much more capital to work with.
Tokenized crypto funds examples
There are some examples of tokenized crypto funds available to the public. Crypto20 is an autonomously organized crypto fund that functions as an index fund for, but for cryptocurrencies. This is not the only crypto fund available, as there are quite a few nowadays.
In times of panic and market downfall, experienced investors usually come out on top. By using the right strategies and having a cool head, it’s possible to be profitable during all market conditions.