Tips to maximize your crypto profits

crypto profits

Have the stories of cryptocurrency millionaires tempted you to try your luck in the world of digital assets? The intention behind creating cryptocurrencies was to have an alternative for traditional payment systems. Perhaps, not even the makers had anticipated that cryptocurrencies would turn into such successful investment instruments. You’re probably thinking, everyone around me is making money with crypto and so can I. Well, you’re not entirely wrong but making money with crypto is not as easy as it sounds. Read more about deposit and stake

Many people have lost money or left their trades halfway because they did not have adequate knowledge about the workings of the crypto market. The cryptocurrency world is still at a very nascent stage and is subject to a lot of volatility every now and then. Rising prices attract many new investors who end up making terrible losses when the market falls. However, with the right kind of strategies in place, making money with crypto can be rewarding.

Read more: What are the best trading techniques for cryptocurrency?

Crypto trading is by far the most popular way of earning profit through crypto but one has to learn the importance of time in this market. You should be able to make quick decisions at the right time to maximize your crypto profit. There’s a stark difference between the crypto market and any other financial market that you might have dealt with before.

Here are some ways with which you can start trading crypto for profit.

Trade to multiply

A big reason why cryptocurrencies are important trading instruments is that they’re very volatile. This volatility brings plenty of trading opportunities as the fluctuations can be big. For instance, a cryptocurrency could swing either way by as much as 10% within a day, bringing several opportunities to trade and make a profit.

With cryptocurrency derivatives also coming into the picture, there are now more options than ever to trade. From futures, and options to swaps, these alternatives make it possible to earn a good profit with a seemingly small market movement if you also add margin trading to the picture.

By using leverage or margin for your trades, you are in a position to trade much larger positions with the help of borrowed funds. These trade positions can be 150 times your account balance size in some cases when you’re opting for advanced derivatives on the trading platform of your choice.

Say you’re trading with 150x leverage and the market moves by a seemingly less 1% in your favour, your profits will still be maximized 150 times. However, this requires traders to be cautious and smart about their trading choices when such a high amount of leverage is involved. If the market moves in the opposite direction, the risk of automatic liquidation keeps looming. A safe bet would be to use less leverage during periods of market uncertainty and explore risky positions when the market is stable and somewhat predictable.

Go short

A key advantage of trading with cryptocurrency derivatives is that you are able to trade short. Opening short trading positions with derivatives is not something that is feasible on spot trading platforms so cryptocurrency derivatives exchanges are a respite.

While it is no secret that top cryptocurrencies that have witnessed monumental growth have had a fair share of slumps. Hence, being able to short cryptocurrencies brings new opportunities to trade and make the most of several profit-making opportunities that come on the way. Thus, it is in the interest of traders to hold bullish positions when the market is doing well and short sell when the market turns bearish.

With this, crypto traders are able to make a profit consistently over a period of time irrespective of whether the market is bullish or bearish. Shorting also allows traders to put risk management strategies in place to keep their spot investments safe. One such strategy is a short hedge that can be used to cut down price risk by zeroing on a crypto price that will be delivered at a future date. This is perfect for those who hold long-term positions.

Auto-alerts are your friends

Did you know that it is possible to get notified every time a particular market takes a specific route? A tool like this would not just be a time-saver but also help in identifying trading opportunities that come up at the right time. For scalpers, an option to do this would bring in great yields.

Today, a tool like this is no longer a dream. You will come across many such options where investors could set up alerts for scenarios that they feel can reap profit. Perhaps Bitcoin has crossed a benchmark or Ethereum is losing value–you could be notified right away. These alerts are typically customizable and can be activated when conditions like the above are met in a specified time period or at a particular point in the future.

To put it crisply, automatic alerts can be handy for investors who do not have the bandwidth to monitor the market at all times.

Use every tool at your disposal

Cryptocurrency exchanges offer a large number of tools that can be used by investors to trade profitably. A large number of cryptocurrency exchanges allow access to charting tools that can be very useful for those who prefer to do technical analysis for their trading decisions. By using a mix of charting tools such as trend lines, built-in indicators as perhaps also oscillators, it becomes easy for investors to navigate through the market and identify the right trading spots.

Other than these, there are a number of different tools with which traders can make good trading decisions. One such example is the platform itself which offers multiple market indicators to come up with a market sentiment score. However, you should always remember that sentiment indicators are not perfect and you should use these insights along with the overall market trends before you start trading.

Final thoughts

In the past, Bitcoin has grown by nearly 200% annually in terms of its price. Every day, we learn about new coins in the market that grow by 10 or maybe even 100 times in price. We hear stories about people becoming millionaires overnight or losing it all in one go. When you look at this against how traditional markets operate, you will find a sharp contrast. The cryptocurrency market is growing and is moving fast. To make the most of it, you have to keep up with its pace.


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