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Cryptocurrency trading strategies: tips and best practices


Cryptocurrency trading has become increasingly popular in the UAE, with more and more traders seeking to capitalise on the many opportunities afforded by digital currency investing. While there is great potential for profit in this arena, it also carries a significant amount of risk. As such, any trader needs to be well-informed about the strategies that can lead to successful trades.

This article will provide an overview of six different cryptocurrency trading strategies and best practices to follow when engaging in cryptocurrency trading activity in the UAE.

Day trading

Day trading involves opening and closing positions within a single day’s market session. It’s attractive because it offers the possibility of quick profits if done correctly; however, it can be perilous due to its high frequency of buying and selling. Traders should ensure their positions are well-timed and use proper risk management techniques to protect against losses if a trade does not go as planned.

Additionally, day traders should be aware of the news surrounding the cryptocurrency they wish to purchase, as this could affect prices significantly within a single day’s trading session. The best practice when using this strategy is diversifying one’s portfolio and moving quickly but judiciously.

Swing trading

Swing trading involves taking a position that lasts longer than a single day, usually a few days or weeks. This strategy takes advantage of market momentum and relies on technical analysis to pinpoint the best entry and exit points.

Traders should be aware that this strategy requires longer-term commitment, so they must have the patience to ride out volatile market cycles while still taking advantage of opportunities as they arise.

Additionally, swing traders should maintain a diversified portfolio to spread risk across multiple assets and ensure their gains outweigh their losses over time. The best practice when using this strategy is to conduct thorough market analyses before entering positions and also keep a close eye on the news regarding their chosen currencies.

Position trading

Position trading involves taking a long-term view of markets and holding onto an asset for weeks or months, usually taking profits from small price movements rather than large ones.

This strategy can be attractive as it minimises the time spent monitoring markets and reduces risk by holding positions for extended periods. However, traders should know that this strategy is unsuitable for all currencies, as some are more volatile than others. The best practice when using this strategy is to diversify one’s portfolio and pick only those assets with high liquidity and low volatility to maximise gains.

For example, Bitcoin in Dubai is known to have low volatility and high liquidity, making it a prime choice for position trading.


Scalping involves taking advantage of small price movements within a short period. This strategy requires quick decision-making and research into market trends to identify potential opportunities. Traders should also remember that scalping is more suitable for experienced traders with deep pockets, as it carries a high risk of loss due to its fast-paced nature.

The best practice when using this strategy is to conduct thorough research into each asset before entering into trades and employ proper risk management techniques to protect against losses.


Arbitrage involves taking advantage of price discrepancies between different exchange platforms. Traders take positions on two exchanges and wait for the prices to converge, allowing them to profit from the difference. This strategy is attractive because it offers potential profits without relying on market movements; however, traders should be aware that even minor differences can have enormous consequences when trading at scale.

The best practice when using this strategy is to conduct thorough research into each asset before entering into trades and employ proper risk management techniques to protect against losses. Additionally, it’s essential to regularly conduct spot checks of multiple exchange platforms to identify arbitrage opportunities.


Hedging is a risk management strategy involving offsetting positions on two currencies to minimise losses due to volatile price movements. Traders should know that this strategy requires significant capital and can still incur losses if markets move drastically in their favour. The best practices for this strategy include:

  • Diversifying one’s portfolio.
  • Setting stop loss levels.
  • Employing proper risk management techniques to protect against significant losses.

Furthermore, traders should regularly monitor markets for any changes in trends that could affect their positions.

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