An Overview of Crypto Market Trading Styles

If you are interested in making money in financial markets, there are many assets for you to pick from and to start trading right away. There are stocks, currencies, cryptocurrencies, options, and ETFs. Each is different from the other even though they may all operate based on the same fundamental principles. For example, while you can choose to trade either stocks or cryptocurrencies, you have to bear in mind that, among their many differences, while stocks can be traded only within some defined market hours 5 days a week, cryptocurrencies are available for trading 24 hours a day, 7 days a week.

Trading Styles (Sources: Deltastock)

Questions most trading greenhorns always ask include: is cryptocurrency stock market? Can I buy cryptocurrency on the stock market? Is cryptocurrency affected by the stock market? These questions and more are a clear reflection of the profound confusion the majority of beginner traders in the cryptocurrency market tend to face. 

Trading Styles in Cryptomarkets

If you are a beginner in the cryptocurrency market, you might be confused as to which of the styles you should adopt. In that sense, you just need to examine your personality or level of risk tolerance, the nature of your day job, and your capital size, to decide on which one to use.  So, how can you buy a cryptocurrency? You can either trade (that is, for the short term) or invest (that is, HODL) for the long term. For both, the volatility of cryptocurrencies, most especially Bitcoin, can help you make a lot of money if you manage to correctly anticipate their directions. The largely unregulated landscape of the market also makes either easy to do as you do not need to go through any long identity or verification process. 

If you will be a trader, like for other instruments, you also have the four trading styles of scalping, day trading, swing trading, and position trading to choose from. As a cryptocurrency day trader, you will have to conduct multiple trades daily. You have to spend a lot of time in front of the screen every day and close all your trades on the same day. For scalping, arguably the most short-term of the four, your aim is to profit off small changes in price in a repeated way. As a result, a high number of trades – as many as hundreds – can be made. By taking advantage of naturally swinging price cycles over weeks or months, swing traders ride on specific price movements until the end. That way, they do not need to be in front of their computers all day long. Apart from any of those three, you can also do position trading, the longest of them.

When you trade in the crypto market, there are two methodologies for you to follow to profit. They are fundamental analysis and technical analysis. While fundamental analysis evaluates information about the cryptocurrency industry, information such as news about regulations around the world, technical analysis, on the other hand, uses market statistics to identify patterns and trends in price. For the best results, one is not better than the other; rather, both should be healthily mixed. Finally, before you set out on your cryptocurrency trading journey, it is important you understand the following terms, and more:

Exchange: online sites that match cryptocurrency buyers and sellers. Exchanges list all bid and ask for orders from their users.

Volume: is the number of cryptocurrency transactions that have been conducted within a given time. Large trading volumes tend to result in strong trends.Order: An order is a trader’s instruction to the exchange. There are three types: market, limit, and stop-loss.

The information on this website and all associated literature are for educational and informational purposes. It does not constitute a fiduciary duty or obligation between Uncut Lab and you. Please consult your financial and investment professional for your specific situation.



I am the Uncut Lab resident cloud computing junkie. I help curate the written content in our Education Corner, providing engaging articles on foundational concepts in cloud computing, data analytics, machine learning, and blockchain technology. Feel free to reach out to me with questions or topics that you would like us to cover. Thanks!

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