For those who are new to the cryptocurrency market, having an effective trading strategy is extremely difficult due to a lack of financial knowledge and trading experience.
In this article, I would like to offer the most profitable crypto trading strategy that is suitable for newbies and still ensure the same effectiveness as the trading strategies of professional investors.
Pattern trading is a way of placing buy and sell orders according to available price patterns. It does not require you to be able to analyze or predict the market.
What is The Most Profitable Crypto Trading Strategy For Beginners?
You just need to trade, take profit and stop loss according to the price patterns without knowing why. Your main job when trading this method is to try to recognize the candlestick patterns that appear in the chart to trade according to them. If the pattern is not correct, you cut your loss and keep repeating.
Volume Spread Analysis (VSA) – price and volume analysis
This method focuses mainly on the relationship between price and trading volume. This is a method that is not concerned with technical analysis but only with how capital flows to find profitable investment opportunities. The VSA method assumes that the market always follows four phases, including:
In this phase, the price of the coin will be low volatility, small trading volume. This phase usually lasts the longest in the cycle, so many retail investors easily lose patience and sell assets to facilitate “whales” to collect goods.
After a long accumulation period, the price and trading volume suddenly increased sharply, many investors started buying and pushing the price up.
The price spiked leading to many investors’ positions that were already profitable, and there were many profit-takers, so the price and volume started to level off.
Deep reduction phase
The trend of taking profits is increasing, making the price unable to go up any more. Key investors left the market, causing the buying momentum to disappear, the crisis spread to the whole market, causing investors to sell off, causing the price of the coin to plummet.
Trading according to this method, you need to find coins that are in an accumulation phase that is about to turn into an explosive phase to buy. Then sell to take profit before the distribution phase ends. This method has an extremely low risk because coins in the accumulation phase rarely fall deeply.
Standing on the shoulders of giants
The easiest way to buy potential cryptocurrencies is to identify coins that have been well-reviewed by large institutions or experienced traders.
You do not need to have too much experience or knowledge, just choose reputable organizations to trust.
Obviously if a trader has an annual ROI of several hundred percent, then he chooses coins to invest better than a novice like you, just buy along and you can easily achieve profits.
The “Coinbase Effect” is one of the events created by traders using this strategy. Coinbase is an extremely reputable company in the Crypto industry as they only list the best cryptocurrencies.
A lot of people will invest in any coin listed on Coinbase without knowing fundamental or technical analysis.
In addition to Coinbase, there are also a number of other reputable organizations such as Binance, Coin List, Polka Starter … also often list coins with a rate of return worth referring to.
Price Action Analysis
Price action is one of the most profitable crypto trading strategy for traders who don’t like technical analysis. Those who follow the price action school believe that technical analysis indicators such as MACD, RSI or Stochastic oscillator are affected by price action.
Price behavior also fully reflects market movements caused by news or macroeconomics so there is no need for fundamental analysis. Therefore, just price action providing market signals is enough to make a forecast without having to worry about other issues.
This is a trading strategy based on the investment trend of the majority with the expectation that the price will continue to follow an uptrend or downtrend until it begins to reverse.
This is a simple trading strategy where you just need to confirm the bullish or bearish trend of any coin without knowing what technical or fundamental factor is causing the trend.
This trading strategy is based on the simple fact that no one can resist the development trend of the market, or what Vietnamese traders say, “get in the way”.
Following the trend helps you minimize the risk because the market often moves the price of the trend before starting a new trend.
However, the difficulty with using the trend trading method is that it is difficult for you to know when the market trend will end to take profits.
Trading strategy is just a tool, how people use the strategy is important. So having a simple trading strategy does not mean that you are inferior to other technical analysis traders.
In financial markets, efficiency is the only measure of value regardless of strategy complexity.
You should not depend so much on the trading strategy that you forget about other factors in trading such as risk management, capital allocation, etc. That can lead to asset loss even though you have the right trading strategy. Good luck for your investment in the cryptocurrency market.