Crypto trading is a common way to profit by reselling digital assets. We would like to look at four futures trading strategies crypto enthusiasts use most often and try to understand their essence.
Here are the most common methods:
- Trading The Range
Let’s consider some of them in more detail.
The Pullback Crypto Futures Trading Strategy
It is the most widespread method in crypto futures trading, which is based on assets rates pullbacks. Looking at crypto charts, you might notice support and resistance levels. So when the asset’s rate crosses those marks, it creates a pullback. The price changes direction and rolls back to the mark it has broken.
The resistance mark is the rate the market cannot break above. The support mark is the rate the market cannot cross below.
During the upward market movement, the coin’s price crosses the resistance mark set before, then turns back and tests the resistance mark again. At that moment, traders open a long position.
During the downtrend, the coin’s rate crosses the support mark, turns back and moves to that mark again. That is where traders open a short position.
Long or Short
It is the second most prevalent method among futures trading strategies. When a trader picks a long position, it means one expects the asset’s rate to grow. When the coin really reaches that price, the trader sells his coins and fixes a profit. The key thing here is to forecast the asset’s rate movements correctly. It requires tech analysis, investigation of crypto charts, learning patterns, etc.
Short means the trader thinks that the coin’s rate will drop in the future. So the trader sells his coins and waits until the price drops. Then, when it happens, the trader repurchases coins.
Experienced investors use leverage to multiply their profits, but they bring fruit only if their predictions work. Otherwise, traders face huge losses, for leverage means borrowed funds. And the more you borrow, the more you lose.
These were the most widespread crypto futures methods. To learn more about trading, visit the White Blog.