How long have you been trading crypto? Have you figured out what kind of trader you are?
In this post, we will be identifying and discussing the different types of traders in the crypto market and if you haven’t already identified the type of trader you are then after reading this you will.
The types of traders are identified from the types of crypto market trading there is which are scalping, day trading, range trading, swing trading, and position trading.
Scalping involves buying and selling cryptocurrencies within a short period for assured profits.
Scalpers are always looking to make profits from little price movements. They are mostly impatient traders that lookout for the little and short minute profits they can make from the market changes of some cryptocurrencies and so they must understand the impacts of every market change to save themselves from losses they are not willing to incur.
Being a scalper can be time-consuming because it requires you to focus full time on market monitoring.
2. Day Traders:
Day trading is short-term asset holding that depends on price movements.
Day traders are devoted to leaving the market each day with good and substantial profit as most of them operate full-time. KIn day trading, there is full reliance on the daily price movements and technical market analysis.
At the beginning of the day, day traders analyze the market using the market tools to predict the price movements of the asset (crypto).
Day traders calculate their entries at the start of the day and exit by the end of the day.
Market price changes can happen very swiftly and because of this the day traders optimize the stop loss and take profit tools in trading.
Being a day trader requires a lot of caution because the market can move against your analysis at any given time in the day.
3. Range Traders:
Range trading is no far different from the day traders. Range traders basically buy and hold for a particular period. It can be days and weeks but not too long. They buy crypto at a particular price e.g BTC at $60k hoping and knowing that there will be a price increase to a specific price of $67k and then sell at the price they have hoped for.
Range traders usually analyze the market and rely on fundamental analysis more to back their reasons for holding the coin.
Most times range traders can end up as bag holders because the market moved against their speculation.
4. Swing Traders:
Swing trading is nearly similar to range trading in the sense that it involves buying and holding a coin/asset for a couple of weeks and even months just to benefit from the appreciation in its price over time.
Swing traders are trading on a semi-long term basis by giving their coins time to appreciate in their value and then sell later in months after their coins must have added value. Technical analysis tools are a swing trader’s best friend because analyzing and the kind of crypto he’s buying into is very essential. The goal of swing traders is to capture a huge chunk of profits from the price appreciation.
5. Position Traders:
Position traders buy investments for the long term. They believe in the coin/asset that they are buying into and trust that it will appreciate over time. They are not concerned much about the short-term price fluctuations in the market because it does not affect their goal but if some market news is likely to affect their investment for the long run, then they will take their necessary actions.
Position traders may also be called investors as they aim to reap profits in the latter.
Majorly from all the listed types of traders, we see two types, the long-term and the short-term traders. Some want to reap the benefits of buying a coin immediately and some will rather have it appreciate to a certain level and take it from there. Whichever type of trader you consider yourself to be, you need to be knowledgeable about the things that concern the market that you are into.
written Joy Abia