Hit at the right moment and retreat. This tactic is typical of people who do not want to put all their strength into one blow, love maneuverability and do not want to get a blow back. We have created a short-term crypto trading strategy for such people. This trading strategy is well combined with the medium term, but can exist independently.
Crypto trading – the main goal of a short-term strategy
The main goal of the short-term crypto trading strategy is to catch local impulses of price movement (from 3% to 10%). The goal depends on market volatility. This strategy is great for testing the market and confirming your global forecast in different parts of the chart.
The main value of this short-term trading strategy is the ability to find potential trades almost every day! What is the cryptocurrency price movement of 5-7% during the day? The main thing is to find the right place on the chart with optimal risks (preferably a profit / loss ratio of 3/1). The relatively short stop order that is allowed in a short-term strategy makes you look for ideal entry points in those places on the chart where there is maximum confidence in the trading situation.
Given the number of trading situations that may arise for a short-term strategy compared to the medium-term or long-term – you can filter trades and not enter when the price is not clear. Or vice versa, entering position and seeing that the price is not moving as planned – you can leave the position with a clear conscience without receiving catastrophic losses.
Advantages and disadvantages of short-term crypto trading strategy
What makes this strategy special and what are its advantages over other strategies:
- The smaller the goal of the trade, the greater the chance that it will work out even in the event of a global mistake. Imagine that the entry in the position on the medium-term strategy and short-term strategy coincided. Most likely, the entry into these positions took place near a strong and liquidity level. Usually, there will always be a price rebound from such levels, at least some:
In the AXS cryptocurrency chart, we gave an example of a medium-term strategy that ended in a break-even stop, but the short-term strategy allowed us to capture a profitable trade.
- With low volatility in the market, or price movements in consolidation – it is a short-term strategy feels great. While the medium and long term strategy is just on pause in anticipation of the trend of price movements
On the example of the ETH cryptocurrency, we have shown how during the month of the price stop in the consolidation it is quite possible to find trades on a short-term strategy.
- Short stop orders and cloudless take profits allow the deposit to be mobile and not get stuck in position for a long time.
- Small trading goals allow you to take counter-trend agreements, which increases the number of trading situations. This trading strategy allows you to make money from crypto trading almost every day.
Though, it is worth considering the shortcomings of the short-term strategy:
- A large number of triggers of stop orders (both break-even and unprofitable). The smaller the timeframe chosen for trading, the more wrong decisions are made;
- In the case of trend price movements, the short-term strategy takes a very small share of this movement;
- Lots of time. You need to constantly monitor the price movement. Evaluate whether it is worth re-entering the position in case the stopper works. Or whether to fix the price faster than the exposed profit and so on.
In the case of short-term trading in combination with medium or long-term – two of the three shortcomings disappear. Instead, the short-term strategy hedges the positions of the medium-term strategy at critical points (counter-trend short trades).
If speed, mobility and daily potential profit are more important to you than a large long-term position that can bring (or not) a fantastic profit in one trade – a short-term trading strategy is what you need.
Nevertheless, we advise you to review our other strategies and start trading with us!