How much do people make by trading cryptocurrency?

December 6, 2020

Reading Time: 4 minutes

The Internet is filled with massive opportunities and possibilities. With the cryptocurrency ecosystem picking up its pace in mainstream media, the possibilities have amplified ten folds. Today millions of traders are ready to invest and capitalize on digital assets.

Today, Cryptocurrency trading is at the forefront of every traders’ portfolio and demand. Cryptocurrency trading has become a fundamental source of getting consistent profits in this day and age since the ecosystem shares many similarities and mechanisms with conventional trading methods except its notorious volatility that helps it stand out.

With the calculated steps and sound research, anyone can get thousands of percent of profits with various cryptocurrency trading types.

How do you start

It is important to note that it is impossible to execute successful cryptocurrency trades with zero experience and research. You need to have a powerful command over certain fundamentals of the mechanisms that undergo in the ecosystem. Moreover, you need to establish substantial experience in analyzing crypto coins, breaking down charts and quotations, and executing deals on cryptocurrency exchanges.

Performing due diligence is of high-priority before diving headfirst into the cryptocurrency trading world. You need to know how to analyze coins on their popularity, history, trends, and more.

How much money can one potentially make with a $1000 cryptocurrency trading investment?

When trading, it is important to go into the process with the mindset that you will lose everything. It is good practice to believe that your investment will tank, and you’re going to lose every single cent because it allows you to stomach the risk you’re going to face inevitably.

When crypto trading, you could go either All-in or take a more passive route. Investors can make or lose 5-8% of their investment within a month of their trading/investment journey. Or you could go for active day trading, and you can expect up to 15% of your investments, considering the type of cryptocurrency you’re investing in. However, you could lose all of your money or retain all of it; you never know; such is the fate of the cryptocurrency market.

How to make money with Cryptocurrency trading

Cryptocurrency trading has become the highlight of almost every traders’ portfolio because it advocates many of the same conventional trading principles. The primary task essentially remains the same; buy as cheap as possible and sell higher than you buy.

While stock traders and traders in general, buy and sell rapidly to achieve consistent profits. The craft is precise and very unforgiving to those who misstep. Interestingly, cryptocurrency trading amplifies that mechanism. So how do you traders capitalize on the cryptocurrency trading ecosystem?

Investors have unique strategies, plans, programs, and agendas. Each investor looks at the cryptocurrency market from different perspectives. There isn’t one surefire way to make money off of the crypto market. However, some options have proven to be the most common and profitable trading strategies that investors use to capitalize on their assets.

  • Intraday Trading
  • Swing Trading
  • Scalping
  • Position Trading

Each trading strategy has its advantages, disadvantages, and ideal situations. Therefore, when diving into cryptocurrency trading, the choices can not and should not be made randomly. It is necessary to analyze the environment, the possibilities, and the opportunities each method possesses.

Intraday Trading

Day Traders have collected billions in capital through cryptocurrency trading. Day traders apply usual standard trading schemes to benefit from the chaotic price variation. Interestingly the secret to day trading lies in good, complete, and sound research. Trades extensively utilize various forms of Technical indicators based on various computational algorithms, statistical models, and trends projected from market data.

Advantages 

  • Accessible money management
  • Easy to forecast the profitability
  • Mitigates risk of losing all your assets
  • No third-party involvements of fees.

Disadvantages

  • Requires thorough monitoring of the market
  • Requires a thorough plan with patience.

Swing Trading

Swing trading involves capitalizing on bullish trends over days or weeks. Swing traders practically implement technical indicators to establish a fundamental understanding of the trading opportunities available in the market. Additionally, swing traders also utilize fundamentals in their hunt for opportunities available in the market.

Advantages

  • Less time consuming than day trading
  • Simple automation
  • Traders and investors can apply conventional trading strategies because they are very similar to forex trading.
  • A lot of options available in the market

Disadvantages

  • Uncertain and chaotic market flips can lead you to your dismay.

Scalping

Scalping trading, also known as Short-term trading, is undoubtedly the most common method traders use in the cryptocurrency market. They are often established on current market speculations and forecasts of financial market news; however, they also rely heavily on technical analysis.

Newcomers often use this type of trading because of the fast deals that occur. Usually, traders use scalping to execute thousands of trades on short positions, small profit margins, and high leverage.

Scalping also allows upcoming traders to build their experience in the trading ecosystem. Larger companies and groups also use it on a larger scale with sophisticated technology such as automated trading, robots, and more.

Advantages

  • Doesn’t need a large deposit.
  • No complex analysis needed
  • Quick

Disadvantages

  • Stress inducing.

Position trading

Position trading requires a stronghold on fundamentals and sophisticated analysis to execute calculated decisions. Position trading allows traders to profit from trend movements in the market. Position traders are the complete opposite of day trading; they calculate their strategies to make the best decision possible based on macroeconomic variables, statistics, patterns, and market trends.

Advantages

  • Slow but rewarding
  • Educates investors on what’s going on in the market

Disadvantages

  • Exclusive to investors with experience and a deeper understanding of trading fundamentals.

Conclusion

The cryptocurrency industry continues to garner attention from the trading sphere as it develops and matures over the years. Interestingly gaining consistent profits in the ecosystem isn’t impossible. Moreover, Traders often use multiple strategies and fundamentals in this diverse ecosystem. So, Good luck trading, and be sure to perform your due diligence.

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