Your cryptocurrency trading style depends on various factors like your available funds, how often you trade, your willingness to take risks, and your financial goals. In the world of crypto trading, there are at least 7 different types of traders, each with their unique strategies.
If you're curious about which type of crypto trader you might be, you're in the right place. In this article, we'll explore several common types of crypto traders based on their characteristics. Keep reading to discover which category fits your crypto trading style.
Main Categories of Crypto Traders
Before we delve deeper into the many sorts of traders, we must first understand the different forms of trading. All traders build their strategies on two distinct types of trading: long-term and short-term.
Long-term investors are looking for long-term returns. They are continually hoping to profit from growth in value over time. The majority of long-term trades entail purchasing the coin at some of its lowest prices. Traders then monitor and wait for it throughout the various market periods. They don't give up, no matter what the market conditions are. They only sell when the coin or token is at its highest value.
Short-term trading, on the other hand, is all about making quick money. It entails looking for market changes in the least amount of time. It might happen over minutes or hours. A trader may simply purchase and sell the asset numerous times in a single day. Short-term trading is ideal for individuals with the time and skills to do analysis. Short-term trading also offers a competitive advantage versus long-term trading. Traders respond quicker to market fluctuations, resulting in lower losses.
Now, let us delve into the distinct subcategories within these groups of cryptocurrency traders.
Scalp Trader
A scalp trader makes a modest profit by buying and selling cryptocurrency numerous times per day. This is done as the trader gets into a profitable trade. Scalpers are traders who employ this method of trading and can perform as many as 100 transactions.