Types of Crypto Traders

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Crypto trading has been on the rise in recent times. Several exchanges are accepting cryptos as a viable asset. 

There are several ways to trade crypto. This article makes it easier for you to learn the various methods. By the end, you should be able to settle on a few. The one you choose should reflect your needs. 

Let's get to it;

Main Types of Cryptocurrency Trading 

Before you get into learning the types of traders, you need to know the kinds of trading. All the traders base their approach on the two main types of trading; long and short term. 

The long-term traders are after the long-run gains. They are always looking to gain from the rise in value after some time. 

Most of the long-term trades involve buying the coin at some of the cheapest values. The traders then wait for it through the different market phases. They don't let go, irrespective of the market circumstances. They only sell when the coin is at the peak. 

Short-term trading, however, is all about instant gains. It involves looking for market movements within the shortest period. It can be as quick as within minutes or hours. One can easily buy and sell the asset several times within a day.  

Short term trading is great for those who have the time and experience for analysis. It is also great for the well-informed on current market trends. 

The short-term trading also has the edge over the long-term trading. The investors react faster to market changes hence lesser losses. 

Types of Crypto Traders

Hold Traders

Hold traders are some of the most peaceful in crypto trading. Holding is quite essential. It involves buying an asset and letting it increase in value over time. You don't make any changes even when the market value goes down. 

Holding trading requires emotional intelligence. You have to resist the urge to move the assets even if it seems it doesn't favour you. However, there is a need to keep by recouping the initial investments early enough. The trader secures the initial investment when the asset doubles or increases more over the period.

The holding traders also need to discipline. Gaining profits can seem attractive, more than recouping the initial investments. 

Holding traders are long term. However, it is the trader who decides the period. Still, they can periodically take out profits for other non-virtual investments.

Scalpers 

Scalping involves buying and selling within a short duration for an assured profit. Scalpers are some of the most impatient. 

Scalping is time demanding and quite involving. The traders must monitor and understand the impact of every market change. They also have to understand the trading fees. A trade that comes with higher costs than profits doesn't make sense. 

Scalpers tend to make low profits. Still, they get to enjoy the security that comes with assured earnings. A great scalper must know how to make proper decisions under pressure. 

Swing Traders 

Swing trading is a short-term trade with a specific target. Unlike scalpers who are ready to jump ship at any time, swing traders are more grounded. They don't react based on market changes as long as they understand their long-term goal.

Swing traders rely on technical analysis. They observe the current and past asset market behaviour to determine future prices. They understand the price dips and other changes in between is part of the coin pushing to the ultimate price. 

Swing trading is one of the most popular. Most of the crypto traders rely on market tools to understand future prices when investing. 

Swing trading becomes better with time. The more one trades, the more conversant they become with the market tools and analysis. 

Day Traders 

Day traders are the most devoted to the trade. They are mostly involved in the market during the most active hours. In most cases, they make a living out of the crypto trading. 

Day trading involves short term asset holding depending on the price movements. It comes with dynamic market analysis to decide when to let go of the asset. It also requires hands-on involvement. 

Day traders are devoted and have the time to monitor the markets all the time. They also look out for market trends and impact on the prices. 

Day trading, however, requires a bit of caution. The market price changes are swift. The day traders keep safe by having a limit for every stake. 

Position Traders 

Position traders are the swing traders but are more in-depth. They study the market before investing with a mind for long-term gain. They don't follow the market trends and charts as the others do. 

The position traders study the coin's white paper. They then observe other market factors and other coins' performance. They can only then invest assured of the long-term outcome. 

Position trading requires experience and an eye for details. The best way to go about it involves starting with small quantities. The trader goes all-in after mastering the market movements. 

Bull Traders 

Bull trading is one of the most popular in the crypto world. The method derived from the traditional forex trading is for the optimists. 

Bull traders invest in assets rising in value. They are always hoping for the best based on price movements. They only purchase when the currency is on a fixed leading position. 

The bull traders keep the assets as long as the investment keeps on growing in value. It can run for weeks, months, or years. They will ultimately let go of the assets when the growth stops. 

Most of the crypto traders belong to the bull category. 

Bear Traders 

The bear traders are the exact opposite of the bull traders. They trade the coins in anticipation of a falling market.

The bear traders want to make a killing before the market takes a nosedive. They tend to analyze several market factors to predict the future. They take advantage of the denial crypto market cycle phase.

At the denial, the traders don't believe the markets can go down. They hope it is a slight decline. The bear traders, on the other hand, would offload everything. They sell when the demand is still high. 

Bear trading requires experience. It takes time and research to understand if the coin is on downtime or a downward spiral.

Whale 

Whales are the majority holders of the assets. In Bitcoin, whales are considered as anyone holding more than 1000 BTC on their wallets. They wield so much power in the bitcoin system. 

The whales have mastered the market cycles and can trigger price changes. They understand the psychological and emotional trading decisions to control the market. 

One of the ways they gain more coins is by creating a fake downturn—the movements of a lot of the currency at the same time impact price. When sold, the market value goes down. The other traders notice this and sell.

Whales then rebuy the assets at these lower prices. The market corrects, and the whales regain their assets plus the additional ones. It takes emotional mastery not to fall to the whales' trade tactics. 

The whales are essential to the Bitcoin ecosystem. Having more whales shows confidence in the currency. It, in turn, attracts more traders. 

Bottom Line

Anyone can trade in Bitcoin. Whether a beginner or an experienced trader, there is something for everyone. The trading type depends on the skills, time, or amount of coins available. 

Still, there are no restrictions. Traders can try out the various techniques to settle on what works best. Some also consider using multiple techniques at the same time. Using the different methods reduces losses in case of a downturn. 

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