Many are interested in Bitcoin Cash trading as they see the potential to make a substantial profit; naturally, the adoption rate is high.

Although many consider Bitcoin the most successful among other cryptocurrencies, Bitcoin Cash also appeals to the masses. In fact, there are many online exchanges that enable easy access to Bitcoin cash; Blockchain Tradein to name one.

Cryptocurrencies are traded on decentralized marketplaces because they are run over a network of computers rather than being issued or maintained by a central authority, such as a government (called a blockchain). As a result, Bitcoin and other cryptocurrencies are not subject to many of the political and economic issues that traditional currencies are because of their decentralized structure.

This does not imply that external forces do not affect cryptocurrencies, either. On the other hand, cryptocurrencies are erratic and influenced by various variables, including supply and demand, media coverage, e-commerce payment system integration, and significant events.

Instead of focusing on the way to navigate the inherent volatility, it would serve your best interest if you strategize on diversification of your portfolio. For example, if you own cryptos, then owning Bitcoin Cash is a good idea.

You may minimize your exposure to the danger of a market move going against you and maximize your gains from good movements by diversifying the trades you make.

Bitcoin Cash is a hard fork of Bitcoin and has 32 MB per block against 1MB of Bitcoin. Thus transactions are faster compared to Bitcoin.

Strategies for trading Bitcoin Cash.

We have mentioned a few Bitcoin Cash trading strategies that are quite common with crypto traders.

Moving Average Crossovers

Understanding moving averages (MAs) and crossover trading tactics is important before you can trade them. So commence at the beginning: A moving average is a lagging technical indicator that creates a single trend line by dividing the total number of data points into the price points of a financial instrument over a given timeline.

While reducing the impact of sporadic price surges, this single trend line enables you to assess the current trend’s direction. It also allows you to assess support and resistance levels by analyzing earlier price movements.

What, then, should your crypto strategy look like with this indicator? The term “crossovers” refers to one of the primary ways to use the moving average. When an asset’s price crosses above or below a moving average to indicate a probable trend change, this is known as a price crossover.

Two moving averages, one short-term and one long-term can be applied to a chart as a further tactic. A golden cross, sometimes known as an uptrend indicator or a buy signal, occurs when the shorter MA crosses over the longer MA. An indication that the trend is changing downward is when the shorter MA crosses below, the longer MA; this is referred to as a death cross.

Relative Strength Index

A technical indicator called the relative strength index (RSI) is used to spot market momentum and overbought and oversold positions. It can also be used to draw attention to visible and covert divergence in the financial markets. Trend trading is another name for this kind of trading.

The RSI is a calculation of the lucrative price closes in relation to the unprofitable price closes, expressed as a percentage.

The following formula calculates it:

RSI = 100 – (100 / [1+RS])

An oversold position is normally indicated by a lower percentage, and a greater percentage typically indicates an overbought position. The indicator is shown as a percentage out of 100.

So, which cryptocurrency trading approach is ideal for RSI? Your risk tolerance and trading style will determine how you respond to that. When the price is range bound in nature, the RSI can also be used to trade short and long signals.

On the other hand, as markets frequently move in trends, utilizing an RSI indicator to identify trends for entry and trends for exit will help you decide when to engage.

Event-driven trading

A significant media presence may impact the market for a particular cryptocurrency exchange or coin. Taking advantage of these “events” is the primary goal of this cryptocurrency trading method. It is a well-liked trading approach for individuals new to trading.

Not just cryptocurrencies but other financial instruments like stock indexes, commodities, and FX pairs can affect their prices through news coverage of current events. Many seasoned traders will exploit this effect; it goes beyond mere guesswork.

Before an anticipated news release, such as an earnings report, you would typically wait until the market displays a consolidation pattern before taking action. This is because market breakouts can happen at any time. But because cryptocurrencies are so erratic and unpredictable, you might need to wait until after a news release like that has been released before making a deal.

While Bitcoin Cash trading, when the news is good, you should invest or buy and be ready to sell when the news is bad regarding Bitcoin Cash.

Scalping

Scalping is the technique of taking positions in accordance with a trend and frequently entering and leaving the market several times in rapid succession as it takes shape. It is one of the most short-term methods because individual deals are held for only a few seconds, at most minutes.

For active day traders, this trading approach is quite effective. Scalping concentrates on quantity-driven minute-to-minute price swings. You would end the deal as soon as it started to turn a profit.

You must act quickly and immediately terminate transactions that are losing money; therefore, there is no “waiting for the market to reflect patterns.” Scalping works better when the market is more erratic.

If you plan to scalp, consider using tear-off tickets. They let you establish a position in the opposing direction so that you are prepared to exit, either taking your winnings or containing your losses.

Remember that scalping might be dangerous if you’re making many trades in a very short time. Therefore, you must exercise caution when managing your risk.

Dollar Cost Averaging

Dollar-cost averaging (DCA), a crypto trading method without indicators, may be of interest to you. Traders of all experience levels frequently use the DCA technique. This is also one of the best ways for Bitcoin Cash trading, ensuring to make the best of the market opportunities as you spread your funds allocated towards Bitcoin cash over a period.

You split up your investments into smaller sums rather than putting all of your money into one item at once. These sums are then dispersed over a predetermined period and routinely invested on a specific day and time of the week—and just that particular day and time.

What does this look like in practice? Let’s imagine you decide to put money into bitcoin. You have allocated $20,000 for this reason and determined that a DCA plan will be the most effective course of action. To determine how many weeks you want the approach to last, divide your initial investment by that number.

For the purposes of this illustration, let’s assume that you want to invest your $20,000 over six months. You would then divide the initial sum by 24 (the number of weeks in six months), giving you an estimated $833 per week. Next, you put $833 into Bitcoin Cash every Tuesday at 2 PM for the following six months or until your initial investment is gone.

Why would you make such an investment? First, the impact of market volatility is lessened when an asset is purchased at regular intervals, so you normally get more money back from your final investment than if you had put all of your money into it at once.

Closing thoughts.

Trading Bitcoin Cash can ensure you invest an excessive amount of money you won’t regret even if you lose it. Although it reached roughly $3,000 in 2017, it is currently trending at around $120, which is within your reach. Since markets are down, now is an excellent time to invest in it.

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