DISCLAIMER: I am not a financial advisor. All contents on this blog are solely my own personal views and for Cryptocurrency Trading education/entertainment purposes only. Cryptocurrency Trading is very risky. Losses can exceed deposits. Enter with discretion.
First and foremost, I will like to remind all the readers to please do read my disclaimer above very carefully. Whatever I am going to discuss here on this article is not a financial advice. Trading in cryptocurrency markets is extremely risky because of unpredictable prices volatility.
The cryptocurrency markets never sleep unlike the traditional global markets like Forex. Open 24/7 the whole year round. Despite trading in crypto markets riskier, the rewards can be great because the profits that can be made out of the extreme price volatilities. This opened doors for opportunities among cryptocurrency traders all over the world.
Cryptocurrency trading is very diverse in nature and there are a lot of crypto pairs to choose from. The possibilities of finding the right trading pairs are endless as there are thousands of cryptocurrencies listed on different crypto exchanges. The volume is extremely liquid as well like trading the Forex/FX markets.
In this article, I will share one of my trading strategies that I practice in the cryptocurrency markets. No one taught me about this strategy although I have done a lot of research in order for this trading execution to be effective. This is my own personal experience and does not reflect any trading advice. This type of crypto trading strategy is not 100% correct and the results may vary depending on the market trends which keep on changing from time to time.
I always do a lot fundamental news research and view technical analysis first before doing this trading strategy.
The idea here is simple, increase your main cryptocurrency portfolio. In my case, it will be the XRP as my main guns and I will do everything as much as possible to increase its numbers regardless of its price hedged against the US Dollar or my native currency PHP or Philippine Peso.
I take note first the entry price of my XRP originally bought in PHP as the capital. This serves as a reference whether I make profits or losses when comparing its final price upon closing the trade. Doing this as a diary is very important for me as I like to make things organized.
Aside from writing quality articles here in the Read Cash platform to earn some Bitcoin Cash and doing my full time works at home as a Virtual Assistant, the cryptocurrency trading has become another layer of income that I find enjoyable. I even acquired new skills of doing it in the past months and made new friends with other crypto traders in this market space. Trading can be a hobby or a sideline. It can be fun but most of the time stressful. So be cautious.
Another term I would like to use here for this type of crypto trading strategy is “Scalping”. A lot of traders have become successful applying Scalping on their trades.
You can watch this video about Scalping in Forex markets:
The thing is, Scalping can be applied in cryptocurrency trading as well! That is what I have found out. To my surprise, it is worth learning.
Scalping is only effective for daytrading for short-term profits with minimal risks of losses. I have to keep an eye closely in the trading ranges. I am doing a manual spot trading because marginal or leverage trading is extremely risky. It is the safest way to trade in the crypto market space. It is much better do things safely. Our goal here is to at least preserve our capital.
For my own scalping, I choose the Binance exchange for their reputation and low trading fees. I specifically have chosen to scalp the XRP against Binance’s very own native cryptocurrency called Binance Coin or simply BNB. The price movement here is decent as well as the trading volume size. Overall, for me this is the most appropriate crypto trading pair to scalp. Aside from that, they are included in the top 10 cryptocurrencies in terms of market capitalization category. It means their volume of trading is liquid. A good trading pair to consider.
Time and timing of sell/buy trade executions are our friends here for a successful Scalping.
These are my steps in executing the Scalping/Daytrading:
• Do a quick view on XRP and BNB's 24-hour price and volume movements over coinmarketcap and see the charts in tradingview for technical statistics as references.
• When selling XRP to BNB, see the top last 5 selling orders and when buying XRP check the top last 5 buy orders highlighted in number 1 in the image. Check XRPBNB’s last traded price, the 24 hour statistics highlighted number 2 in the image. Check the trading depth of the buy and sell demands for XRP highlighted number 3. If we can see that the red line graph is higher or bigger, it gives us an idea that XRP is in demand. More buying orders than selling will drive XRPBNB price higher. The same goes if the green chart is higher or bigger than the red, more selling in XRP driving its price lower. In connection with that, we can check the recent market trades in number 4 to know when to set a buy or sell order.
• Sell XRP at higher BNB price within the top 5 range of that chart highlighted in number 1. Wait for your order to be executed.
• After a successful selling of XRP into BNB, buy XRP now at cheaper BNB price in the green numbers or the buying orders. Then wait again for the order to be completed.
• The cycle keeps going on and on as long as you like. In my case, at least I have a 1,000 XRP capital as an instrument to do efficient scalping. It is the only amount I can afford and I am willing to take risks at the moment.
Check out one of my successful XRPBNB trade scalpings:
I sold my XRP at higher BNB price then buy back XRPs at cheaper price giving me more XRPs in return.
I may not be able to discuss in details but I just want to give a quick look on how I do scalping using XRPBNB trades as an example. Like I mentioned earlier, my end goal is to increase my XRP supply out of selling it at a higher BNB price and after that, buying back those XRPs cheaply using the exchanged BNB coins.
Scalping has some drawbacks that include:
• Extreme market volatility case like Crypto Whales do a massive Bitcoin selling or buying. We can be left behind or we can suffer inevitable losses. These Crypto Whales do a lot of damage if they decide to withdraw or sell their big positions but can be beneficial for other altcoins including XRP and BNB if they buy big amounts of Bitcoin. In the history of crypto trading, the Whale activities always leave ripple effects in the crypto space. To know more about what they are and what they do, you may read my other article talking about them:
Crypto Whales 101 and How to spot them
https://read.cash/@rafaelken1989/crypto-whales-101-and-how-to-spot-them-1c0a303f
• Scalping is time limited and like I said earlier, it’s a daytrading task for short-term profit taking. It is neither a long position nor a short position. We just literally do a scalping based on the current cryptocurrency market movements. Remember that we simply ride the wave or get involved with the current market trends.
I hope you have learned something new. I will greatly appreciate for any questions and corrections by commenting below this article.
Thanks a lot for reading until the end.
Stay safe and God bless!
