Short Period Trading: Top Cryptocurrencies to Choose

There are many strategies of bitcoin trading out there that can help you make a profit. It takes a bit of luck and a lot of skill to implement the strategy you want and execute it in the best possible way. There are many ways to categorize approaches and strategies, and one of them is directly related to the time you want to invest in this activity.

Simply put, there are short-term and long-term types of trading, and both can be as effective if you do them right. In this article, we’re going to focus on short-term trading, examine what it is, and what the best cryptocurrencies are for those who want to engage in this type of activity.

What is short-term trading?

In the world of cryptocurrencies, a short-term trade is usually executed when you buy cryptos and hold it for a short period. The goal is to sell it as soon as possible and make a profit that way. But how much time is actually indicated as “short-term”?

Well, any term, smaller than a year, is considered short in trading. A short term trade can mean that you’re buying a cryptocurrency and selling it a couple of minutes later. However, you can also hold it for a couple of months. Short-term is, technically speaking, anything that’s not more than a year.

How is short-term trading different from long-term one?

There’s another term used for long-term trading — HODL or Hodling. Essentially, those crypto traders who want to make a big profit would buy a cryptocurrency and hold it for years if needed, until they see a huge opportunity to sell it and make a huge profit. Hodling is riskier, but it can bring better rewards.

Therefore, if you’re new to the world of cryptocurrencies and crypto trading, it’s always better to start with short-term trading first. If you want to learn more about different types of cryptocurrency trading, make sure to check out this article. But before that, let’s check out the advantages and disadvantages of this approach.

What are the advantages of short-term trading?

As you probably already know, cryptocurrencies are extremely volatile, especially when compared to fiat currencies. In all stable countries, fiat currencies don’t change more than 1% on a daily basis, but that’s not the case with cryptos. The price of cryptocurrencies fluctuates a lot, and that’s why short-term trading can be a great opportunity to make big gains in a matter of hours — even minutes.

Also, there are many cryptocurrencies to choose from, and with their prices fluctuating so much, experienced traders can find an opportunity to make money by trading them on a short-term basis.

Are there any disadvantages?

Although short-term trading is much quicker compared to the long-term one, you still need to do your homework before you actually make a trade happen. Simply put, the market is volatile, and you need to make a thorough analysis in order to find out what crypto to buy or sell. In fact, you’ll probably focus on the analysis more than on trading itself. This is different compared to long-term trading, where you just need to “hodl” your cryptos and wait for the right opportunity to sell them and make a profit.

Another disadvantage of short-term trading is that it can lead you to a mistake if you let your emotions overtake your reason. Simply put, some traders often make emotional trades, without thinking it through, and that is one of the pathways to losing all your funds.

What are the best cryptocurrencies for short-term trading?

Let’s take a look at some of the cryptocurrencies that are popular for short term trading. Believe it or not, most of them are already popular cryptos, as they still provide the best opportunity for making gains in shorter timeframes. Read on!

Bitcoin

It’s majesty — Bitcoin. There’s no trading without Bitcoin nowadays, as it still occupies the place in the market. Moreover, Bitcoin is still very volatile, so it offers a perfect opportunity for making a profit with short-term trading. No matter what you do, you will not be able to escape Bitcoin, so why not embrace it and make sure to get the most out of it.

There are traders who only focus on Bitcoin trading, and don’t even pay attention to other cryptocurrencies. Some of them also implement short-term trading strategies and are pretty successful.

Ethereum

Ethereum is the second most popular cryptocurrency in the world, and it is the main crypto to support the Ethereum platform — the most popular platform for building decentralized apps. People trust Ethereum and trade it often, but the cryptocurrency is just as volatile as Bitcoin and other cryptos. Therefore, ETH could give you a great opportunity to earn money in short-period trading if you execute your strategy properly and make timely trades.

Litecoin

Litecoin has been under the spotlight lately as it was supposed to undergo a halving process. Judging by the demand/supply rule, the price of Litecoin is bound to go up, as the supply would be much lower. In that case, using Litecoin for short-period trading would be helpful to make a profit.

Conclusion: Learn & Analyze Before You Trade

What you should understand before you engage in short-period trading is that it’s not a game of chance. In fact, it’s not a game at all. Trading cryptocurrencies is a serious activity that requires a lot of skills, time, and effort if you want to be successful. Moreover, you need to spend a lot of time learning about trading and analyzing possible scenarios before you take action.

Once you feel ready enough, make sure to start with one of the three cryptocurrencies suggested in this article and see how it goes. If you start making a profit, feel free to include other cryptos as well. There are hundreds of cryptos out there, and their prices are very volatile, you just need to play your cards right to make them work in your favor and earn money from them.

Note: this article es from our guest writer Mary Ann Callahan, the linkedIn profile is Mary Ann Callahan