If any part of blockchain technology has caught the public’s attention, it is decentralized finance (DeFi). DeFi can effectively offer many of the products and services provided by traditional financial institutions but with greater privacy, flexibility, and lower costs for users. The result has been billions of dollars transferred to the DeFi industry in just the last two years, with more DeFi platforms launched every month.
It is hard to keep track of how many platforms there are, which can be difficult for the traders. But you need to choose one or two which provide the best experience and focus on the trading strategies. Here is what you need to know if you want to embark on this journey.
1. Choose The Best Platform
Whether you want to swap Binance’s token (BNB) or Ether (ETH), or any other cryptocurrency, you need to select the platform first. Before we get in on any strategies at all, we want to suggest Nimbus Platform. You can find the necessary features of DeFi: from DEX and peer-to-peer exchange to staking, loans, and access to traditional financial tools such as IPO participation or startup crowdfunding. These are accessible for everyone on the Ethereum and Binance Smart Chain networks.
Getting started on Nimbus is easy, and all you have to do is connect your wallet and choose the dApp you’d like to use – in our case, it’s the Nimbus Swap.
Now let’s move on to different swapping strategies, and most of the common ones are active trading strategies.
2. Day Trading
One of the best-known and most widely used trading strategies in the crypto world is day trading. As the name suggests, you enter and exit on the same day, and you are looking for the movements on the market which are happening throughout the day. This is a strategy taken from traditional stock trading in which cases the market works on certain days, and it is open for you to make your moves.
You never hold stocks, or in this case, cryptocurrencies overnight. That is a completely different strategy which we will refer to later on in the article.
Unlike the regular stock, DeFi platforms where you can trade cryptocurrencies are open 24/7, and you can get in and out whenever you want. In this instant, day trading refers to short-term trading but knowing when to start and when to exit.
3. How do you become a day trading expert?
Every type of trading has some risk to it, and it is hard to master it. But what you can do to improve this skill is read analysis, follow trends and learn as much as you can from various online sources and other traders to spot patterns. You will not earn benefits every time, but you can consider yourself a successful trader if you can minimize the losses.
4. Swing Trading
Unlike day trading, where you enter and exit on the same day, swing trading is the type where you are holding a position for a certain amount of time. This isn’t quite specified, but it usually spans between a few days and a few weeks.
How does it work?
This type of trading requires people to follow the waves of volatility, and for them to show it takes days or weeks, and that is why this type of trading requires you to hold your position. To be successful in this type of trading, you need to conduct fundamental analysis and keep an eye on technical indicators.
Perhaps this is the best type of trading for beginners. If you’ve never traded crypto before, this type of trading allows you to take your time and reconsider your position. Because it takes days for volatility to show, you can stay in the position or exit on time and not suffer any significant losses, which is the case with day trading, for example.
It is a lower-risk type of trading and not as stressful. So we recommend you use this one to start with. Also, it doesn’t require you to stay on it for too long, which is something for a more experienced bunch.
Last but not least, there is trend trading, and as its name suggests, traders enter and hold a position for months, following trends. This isn’t a complicated trading strategy, but you should know your market well and be aware of trend reversals. It may happen for some crypto to lose popularity over time, even though it has been gaining it for a few months back.
This type of trading has a risk factor because you can lose assets quickly out of an unpredictable drop.
There’s one more strategy that a lot of experienced traders use, and it is called scalping. This is a complicated strategy to master, and it isn’t recommended for beginners. What traders do is get in and out in a matter of seconds or even minutes.
They make small moves, but they do those repeatedly based on the patterns they figured out. These small moves will bring them some benefits, but you need to do these over and over again for a more significant reward. However, finding a market inefficiency that happens, again and again, is the key, and you can later exploit this loophole.
How to improve your trading strategies?
There are many ways one can improve when trading cryptocurrency, and there are various ones one needs to take on this journey. Other than studying the market and learning the skills, and mastering and understanding technologies behind it, you need to treat trading like a business to begin with.
Most traders start with this job on the side, hoping to make extra rewards, but trading cryptocurrencies and using different platforms effectively requires your full focus. We’ve provided you with a platform that you can start with, and they offer some more earning strategies that we didn’t address in this article. But you now know the basics to start trading BNB or ETH, so get to it!