Exploring the allure and strategy of crypto trading: Insights from Parth Chaturvedi of CoinSwitch

The Appeal of

The primary draw of cryptocurrency trading lies in its extreme volatility. "Crypto, like any new asset class, exhibits significant ," Chaturvedi explained. "This attracts both long-term investors looking to build wealth and short-term traders seeking outsized returns based on market movements."

Chaturvedi stressed the importance of distinguishing between the mindsets of investors and traders. "If you're not planning to park your wealth for at least five years or weather a complete market cycle, you should consider yourself more of a trader than an investor," he advised. "The market is always right. It's the most rational price discovery mechanism that exists."

The Dynamics of Market Behaviour

One of the critical aspects Chaturvedi highlighted is understanding market behaviour. He emphasized that in crypto, as in any market, prices are in constant motion, driven by myriad participants. "Reasons might become irrelevant in the market. You can have a long-term perspective, but the market often reacts to short-term events."

The ability to profit in any market condition, up or down, is a distinctive feature of crypto trading. Chaturvedi pointed out that products like perpetual contracts allow traders to take both long and short positions, capitalizing on price movements in either direction. "In a highly volatile market, a trader can make money on all these different movements," he noted.

Rules for Successful Trading

Chaturvedi outlined several cardinal rules for traders to follow. First and foremost is the importance of entering trades with a predefined loss. "Always define the loss potential for any trade," he urged, emphasizing as a key to long-term success.

He also cautioned against emotional attachment to trades. "If you start losing, don’t get emotionally attached. Stick to your stop-loss or trigger prices," he advised. Consistency and discipline are crucial, as is the need to specialize. "Don't use multiple systems. Become an expert in one market behavior before moving on to others."

Executing trades flawlessly is another critical aspect. "A lot of times we set triggers but fail to execute on time. Constant market monitoring is necessary," Chaturvedi said. Keeping a detailed trading journal can help traders learn from both their mistakes and successes.

The Necessity of Strategy

Chaturvedi addressed the common question of why traders need a strategy if they know a trade can make money. "You need to build discipline and consistency," he emphasized. "You can't rely on one-off tips. Make informed and rational decisions, manage risks, and adapt to changing market conditions."

Recent market movements illustrate this point. Ethereum's price surge following news of a potential ETF approval exemplifies how rapidly market conditions can change, necessitating a flexible strategy.

Effective

Chaturvedi shared insights into key trading indicators such as Exponential Moving Averages (EMAs) and the (RSI). "EMAs help identify market cycles, while RSI indicates whether an asset is overbought or oversold," he explained. He also highlighted the importance of understanding market depth to assess liquidity and execute large trades without significantly impacting prices.

Leveraging Technology

CoinSwitch Pro offers advanced tools for traders, including charting tools from TradingView and arbitrage opportunities across different exchanges. Chaturvedi demonstrated how these tools could be used to track market movements and optimize .

The Future of Crypto Trading

As the crypto market continues to evolve, tools and strategies will become increasingly sophisticated.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

Source: Forex-Markets-Economic Times