Crypto Trading Strategies for Beginners | 4 Core Concepts to Understand

Crypto Trading Strategies for Beginners | 4 Core Concepts to Understand

OUR CRYPTO TRADING STRATEGIES FOR BEGINNERS GUIDE WILL INTRODUCE YOU TO 4 CORE CONCEPTS THAT ARE THE FOUNDATION TO ANY CRYPTO TRADING STRATEGY.

crypto trading

If you’re looking for a comprehensive guidelines to getting started in Crypto, make sure you read our other article first!

Take your learnings from your crypto trading for beginners guide, and go head-to-head in a lobby!

CRYPTO TRADING STRATEGIES FOR BEGINNERS

RSI

Making trades based on the Relative Strength Index of a given coin. RSI is one of the most common beginner strategies and, if used correctly, can navigate your Bot effectively through different market conditions. 

The RSI in its simplicity is an indicator that analyses the momentum of a coin by measuring the speed and change in the movement of price. The RSI helps identify whether a market is overbought or oversold. In other words, the RSI can be used to identify when it is a good time to buy or sell. 

When using a trading Bot and when using the QuidPro platform, traders usually set their RSI between the 30 to 70 range. Coins identified with an RSI of 30 and below are deemed to be a good time to purchase a coin because the coin is deemed oversold, which means the price may recover shortly, and an RSI of 70 and above are a good time to sell because the coin is deemed to be oversold and may lead to a potential sell-off. 

Users can decide whether they wish to use the RSI strategy for either purchasing or selling a coin, or both. 

  • Select an RSI of 30 and below in the Bots “Buy” tab of the Bots Parameters to instruct the Bot to purchase coins that have an RSI of 30 and below.
  • Select an RSI of 30 and above in the Bots “Sell” tab of the Bots Parameters to instruct the Bot to exit/sell trades that have an RSI of 30 and above. 

Using the RSI Index to help analyze how overbought or how undersold a coin can allow your Bot to strategically decide on when it is a good time to buy or sell a coin. 

TEMPORARILY EXIT MARKET VOLATILITY

There may be times where you wish to escape the volatility or the wild west like market conditions that you can find yourself in the crypto market. Sometimes the simplest strategy in terms of protecting your portfolio is by exchanging your crypto assets, such as Bitcoin and Ethereum, for stable coins like Tether and True USD (TUSD). 

You can capitalize on the market’s recovery by waiting for a more opportune time to re-enter. In other words, by re-entering a market at a lower price than when you exited, you will be in a better position than when you started. This is because your portfolio will be larger than it initially was. The beauty here is that your “perfect timing” resulted in a more profitable position at no cost at all. 

PORTFOLIO %

In a nutshell, the sum of all the funds that you have available in your portfolio is equal to 100% of what you have available. Duh. By increasing or decreasing the “Portfolio %” in your Bots Parameters you change the % of the portfolio that you give your Bot permission to trade with. 

“Portfolio %” works in conjunction with “Available Trade Slots”. First, the Bot will look at how much % of your Total Portfolio that the Bot is allowed to trade with, next it looks at how many “Available Trade Slots” have been selected.

  • Selecting a “Portfolio %” of 100% and 1 “Available Trade Slot” means that the Bot will use 100% of what is available on a single trade. 
    • Warning, selecting 100% of your portfolio to use on a single trade is not recommended for obvious reasons.
  • If 50% of the portfolio and 1 Available Trade Slot is selected, it means that 50% of the total portfolio will be used on one trade. 
    • Once the Bot has performed the trade, because it only has 1 Available Trade Slot, the Bot will NOT look to purchase any additional coins.
      • This is important to note because if your trade slots are “full”, and the there is an attractive market with many other potential opportunities, the Bots will not be evaluating any of the opportunities to Buy.
  • If 80% of your portfolio has been selected to trade with, and you have selected to have 2 Available Trade Slots, then the Bot will look to buy 2 Coins, using 40% of the Total Portfolio 
    • Portfolio = 1BTC
      • 80% = 0.8 BTC
        • 40% of 0.8 BTC = 0.32BTC per trade.

* It is important to note that you cannot change the base asset of a Bot when it is busy competing in a QuidPro Lobby. 

BASE ASSET

When considering how to set up your Bot and how to create a trading strategy, you need to think about what Base Asset you are going to wish to use to convert everything back to in order to understand the performance of the Bot. 

When creating a new Bot, users can select from the following available Base Assets:

  • Bitcoin
  • Binance
  • Tether

IN CONCLUSION

These crypto trading strategies for beginners allow Traders to add/edit the following components to their strategy to improve on their Bots profitability.

RSI

  • To identify if a particular trade is overbought or oversold
    • Below 30 = underbought – Attractive time to Buy
    • Above 70 = oversold – Attractive time to Sell

Exiting in Times of Volatility 

  • Sometimes the market gets too volatile and you can limit your losses by resetting your portfolio / converting your portfolio into a stable coin that is not being affected by the market’s volatility. 

Managing Portfolio %

  • Decide how much of your Portfolio you wish your Bot to trade with. 

Base Asset

  • When setting up a Bot, users can pick from 3 different Base Currencies to base their Portfolio on:
    • BTC
    • BNB
    • Tether

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