Beginner Tutorial 7 Successful Strategies for Cryptocurrency Traders

Ultimate Guide 7 Proven Strategies for Beginner Cryptocurrency Traders

Author: Jeff Wilser, Consensus Magazine; Translation: Songxue, LianGuai

Let me pull back the curtain. To understand how traders view the current cryptocurrency market, take a look at the evolution of this article. Initially, I planned to title it “How Traders Find Investment Opportunities in the Crypto Winter.”

But traders communicated a different message to me: this is no longer the winter of cryptocurrencies. “In a bear market, Bitcoin doesn’t rise 130% for 10 consecutive months,” trader Adrian Zduńczyk told me via Twitter/X DM. Zduńczyk believes the early stage of a bull market will begin in January 2023. “Many projects have mistakenly referred to it as the crypto winter or bear market,” Zduńczyk said, “when they mean a slow economy.”

This question is not just an academic one. Understanding the macro environment is crucial for many traders to plan short-term trends. This is one of the oldest views in trading: the trend is your friend. In an upward trending market, you go long, while going short may lead to failure. The opposite is true in a bear market.

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Some traders have embraced the possibility of a crypto spring, while others still feel uneasy about a bear market. “It’s tough for traders. We’re human, and we’re emotional,” said Christopher Inks, head of Texas West Capital Trading Group. Inks mentioned that for many traders who got used to the lackluster price movements in 2022, “there’s a recent cognitive bias making it hard to realize the bottom has arrived.” Like Zduńczyk, Inks is also a believer in the new bull market cycle, stating, “In fact, our rebound has been going on for approximately a year.”

There are also traders who don’t care about the wind direction – they are happy to go long or short. “From my perspective, it’s always a bull market. Always. We don’t care which direction the market is heading,” said LianGuaiweł Łaskarzewski, operator of the hedge fund Nomad Fulcrum. “Based on market sentiment, we use different strategies, which may lean more towards shorting rather than going long.”

This brings us to the first of two disclaimers: not all traders trade in the same way, have the same strategies, or view the market from the same perspective. If they did, by definition, there would be no trading – every buyer needs a seller.

The second disclaimer is: this is not financial advice. Please refrain from buying or selling anything based on quotes you read in this article.

In summary, here are seven strategies that cryptocurrency traders are currently using to find elusive and enticing investment opportunities.

1. More Breakouts, More Signals, More Trades

Adrian Zduńczyk runs a trading team called The Birb Nest, where he has a set of specific rules and signals for entering trades, usually based on breakout signals. These signals are the same in both bear and bull markets, but what’s different is that they occur more frequently now than in 2022. Zduńczyk says, “When a price breakout is confirmed, I will make a buy trade.”

Typically, these trades fail, as Zduńczyk admits, with a winning rate of only 30%. “I make a living losing money,” he jokes. But he sets strict stop losses (the maximum loss per trade) and allows profitable trades to continue, so his 30% winning probability is enough to offset the 70% losing rate. This mathematical setup remains the same in both crypto winter and crypto spring, but now he spends more time trading instead of sitting on the sidelines.

2. “Moon Bag” Strategy

This strategy is proposed by former CoinDesker journalist and host of The O Show, Wendy O. If a project she invests in starts to “moon,” she starts taking profits and then recovers her initial investment. “What I have left is my moon bag. I fully own it,” says Wendy. At times, she may place this “moon bag” on a staking platform (if available) to earn passive income while waiting for the project to “moon.”

3. Related Arbitrage

LianGuaiweł Łaskarzewski doesn’t care about bull or bear markets and shares two examples of asset price trends related to each other. “The direction of Tesla’s development is the same as Nasdaq,” he says. Then, you can plot two price curves—one for Tesla’s price curve and another for Nasdaq’s price curve. “If the spread between them keeps widening, we can make money through the spread. Whether it goes up or down doesn’t matter to us.” The same principle applies to the forex market (e.g., the price difference between the US dollar and the euro) or the cryptocurrency market (e.g., the price difference between Bitcoin and products like Solana or BNB).

4. “Wyckoff Method”

Over 100 years ago, a financial technician named Richard Wyckoff introduced a theory that the market exhibits periodic fluctuations, and understanding these cycles provides signals for when to buy and sell. They are still used by traders and referred to as the Wyckoff Market Cycles. Christopher Inks studies charts and uses these cycles to guide his setups. “My edge is actually in understanding market psychology,” says Inks. “Being able to interpret price movements and trading volume.” Inks mentions that these cycles occur both in longer time ranges (weeks and months) and shorter time ranges (minutes). Inks states that this helps to determine the direction of trends, and “one of the best things a trader can do is trade in the direction of the trend.”

5. Not Just Trading Cryptocurrencies

Many cryptocurrency traders are also stock traders and forex traders, always looking for the best setups. “Why limit yourself?” says Łaskarzewski. “If you can make money elsewhere, why restrict yourself to the cryptocurrency market?” Łaskarzewski’s company often moves capital from cryptocurrencies to oil, then to Tesla, then to gold, and then back to cryptocurrencies. Yes, tokenization of RWA is part of this larger strategy. Łaskarzewski emphasizes, “Tokenization is 100% important.” He adds that his company will be launching their own RWA token in January, allowing more investors to buy into the fund.

6. Use Leverage with Caution

During our phone conference, Wendy A. emphasized multiple times that these are not financial advice – so I’ll reiterate that here – and she also added that she personally doesn’t use excessive leverage. “If I do, it’s at most 2x or 3x,” says Wendy. Łaskarzewski agrees and points out that overleveraging is one of the reasons why beginner traders get crushed. “They use 100x leverage, and if the market moves 1% in the wrong direction, they lose everything,” says Łaskarzewski.

7. Flipping

An old but useful strategy, and a key part of Nomad Fulcrum’s toolbox. “We have night bulls and day bulls operating at different time frames,” says Łaskarzewski. “Hourly, minutes, 15 minutes.” The basic principle is to identify price ranges where a bounce often occurs when it touches $15 and then gets “rejected” (goes lower) when it touches $20. There are plenty of complex indicators (usually focused on trading volumes) to help refine the criteria, but the idea is to buy at $15 and sell at $20, repeating the process.

The theory is simple, execution is difficult. From personal experience, I’ve tried flipping US stocks every morning for the past two years. How’s it going? Let’s just say, if it were easy and profitable, do you think I’d be writing this article? Or, in other words, proceed with caution.

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