The cryptocurrency market is growing at a rapid pace. As of January 2022, there are about 10,000 cryptocurrencies. That gives enormous opportunities for speculation.
Traders use many different ways to increase their capital in the cryptocurrency market. Consider the styles of short-term cryptocurrency trading.

Scalping

 

One of the most common trading methods. A trader opens and closes a transaction in a short period of time: from a few seconds to several minutes, occasionally the interval can reach several hours. That is, the number of transactions can reach several hundred per day. But the price difference of an asset between opening and closing a position is small. 

Profit is generated due to small fluctuations in the price of an asset, as well as numerous transactions per day. Traders use various indicators to determine the best entry and exit point for a trade.

Even in a relatively flat market, a small movement in the price of an asset occurs more often than a significantly large one. That is, on the set of these small movements, the trader wins. Trades are always closed on the same day. This method is very risky, especially for beginners.

Arbitration

 

In this case, a trader buys an asset on one exchange at a lower price and sells it at a higher price on another exchange. At the same time, a trader needs to take into account some factors in order to minimize risks. 

For example, commissions for depositing / withdrawing cryptocurrency, methods of depositing / withdrawing an asset, the duration of transactions, third-party factors (for example, a failure in the operation of the exchange). If the calculation is incorrect, the profit can be negligible, or the trader will have to close the deal at a loss. The trader closes all positions on the same trading day. To compare the coin rate on different exchanges, you can use the CryptoCompare or CoinMarketCap services.

 

Swing trading

 

This method is a cross between intraday trading and positional trading. In this case, the trader does not close the deal on the same day, but transfers it to the next one. This comes with some risks. The trader needs to conduct a thorough analysis. After all, the price of an asset may fall in the morning.

Whatever type of trading a trader uses, it is always necessary to analyze the market, all kinds of factors that affect the movement of the market, and your emotional state. A trader needs to constantly develop their financial literacy in order to minimize risks and increase profits.