Cryptocurrency Trading in India

Cryptocurrencies have become an integral part of the vocabulary of Indian investors and traders.

New coins being launched on a regular basis has led the crypto space to be constantly in the news leading to a spurt in trading volumes in India.

However, there are many new investors who are not well versed with the concept of cryptocurrencies and end up buying only popular coins like Bitcoins or Ethereum.

But just like stocks, investors can also trade in cryptos and make money without having to take the risk of holding on to long term positions.

Traders need to develop strategies to earn the maximum possible return by taking calculated risks.

Let us look at the 4 popular trading strategies that can help you make good returns in cryptocurrencies.

Day trading

This is the most common trading strategy involving buying and squaring off positions on the same day. The idea is to book profits amid intraday price movements in a chosen cryptocurrency.

Traders often rely on technical charts to decide on their buy and sell levels for day trading.

Range trading

Technical experts and chartists provide support and resistance levels at the beginning of every trading session. Traders can use these levels to enter and exit a trade.

For example, a trader might buy cryptos at a price close to the support level as he would expect that the price would bounce back from there.

Similarly, a trader may short sell a crypto at a resistance level or square off his position at a resistance level expecting prices to drift downwards from there.

Arbitrage

Arbitrage is a technique of gaining from differences in the price of crypto in different markets.

If the price of a crypto asset varies on two exchanges, a trader can buy the crypto asset on one exchange at a cheaper rate and sell it on the other exchange at a higher price.

Traders would need to open accounts on different exchanges and monitor price differences regularly to take advantage of this strategy.

Scalping

Scalping is a trading strategy in which traders profit off small price changes in a crypto.

The main goal is to buy a number of coins and then quickly sell them a few paise higher for a profit. The holding times can vary from seconds to minutes.

Traders use momentum indicators such as stochastic, moving average convergence divergence (MACD), and the relative strength index (RSI) for scalping.

It requires good timing and traders must be able to manage the margin requirements to avoid any losses.

Remember, you should invest only that you can afford to lose. This is a good rule to follow when it comes to trading.

If you are just starting in the world of cryptos, take a look at the CryptoMaster course built especially for the common Indian investor. This should help you with the ABCs of cryptos and how the crypto world operates...