Hacks for Crypto Trading in See-Saw Markets

The early 2020s have become a challenging time for cryptocurrency traders. Not only has the sector’s leader, bitcoin (BTC), reached an all-time high, but it’s also hit a surprisingly low level amid a securities market meltdown. What are investors and altcoin enthusiasts to make of a two-year period that has witnessed tops and bottoms? There’s really no answer to the question except to take a careful course of action, one that leverages tactics that work for all types of traders in a wide range of markets and asset classes. Hacks for crypto buyers and sellers who prefer to operate in volatile environments have a good deal of value.

Some of the techniques help preserve capital by minimizing losses, while others assist new entrants who aren’t accustomed to the regular volatility that comes with the territory for anyone who deals with cryptocurrency regularly. In addition to setting safe position sizes on transactions, a short list of helpful hacks includes sector diversification, scalping tips, learning how to use CFDs (contracts for difference), and portfolio balancing. Here are more details about the most relevant crypto hacks for see-saw markets.

Practice Safe Position Sizing

One of the most useful hacks for up-and-down marketplaces is careful position sizing. CFD brokers who offer cryptocurrency trading like Easy Markets are a good environment in which to practice position sizing. That’s because new crypto traders need the support of a full-service team that can offer educational resources and other tools to safeguard capital. For the majority of asset classes and for people of all experience levels, the sizing rule usually means committing no more than 1% of the total account balance to a single position. For those who have smaller amounts of available capital, this rule can be strict, but it is an effective way to preserve financial resources in times like these.

Diversify Within the Sector

Some traders say crypto coins are all the same, but it’s far from true. As is the case with other asset classes, there are more stable and less stable altcoins, majors, minors, well-knowns, and exotics. Crypto enthusiasts who want to continue operating during a see-saw pricing phase should consider diversifying their holdings. This kind of in-sector variety can come in handy when your favorite decides to take a nosedive on a round of bad news or succumbs to misguided management.

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Don’t Be Afraid to Scalp

Try to think like a day trader when prices become unusually choppy. Watch the action and try to identify patterns that include recurring pullbacks interrupted by run-ups. If you do spot a trend that appears to repeat itself, there could be value in paper trading a few of the swings and then taking a very small position on one of them. It never hurts to learn new skills, and volatile markets can be a way to learn a few new tricks.

Use CFDs For Two-Direction Positions

CFDs are an ideal way for people of all experience levels to follow up and down trends in all kinds of markets. The beauty of a CFD is that it gives you the power to play the markets in either direction. The goal is to make an accurate prediction about which way prices will move. With power comes responsibility however, and traders should always practice solid risk management techniques to avoid large losses should the markets move against you.