Passive trading strategies are easier to manage and don’t require as much time. If you choose long term trading you can mostly rely on the historical data to make a trade. However, crypto is only a decade old and there is a limited amount of data available. Nevertheless, long-term traders evaluate historical data with recent activity in the market to predict how certain digital assets will act in the long run. This strategy will come in handy when investing in more known cryptocurrencies.

Advantages of long-term trading:

-It surely is less stressful, because you do not need to monitor the market 24/7

-Time-saving, meaning you can spend extra time to research other assets to invest in

-You will spend less money on fees

Disadvantages of long-term trading:

-You can miss out on volatility of the certain asset and miss a chance to make profit it requires you to have more knowledge about the industry as you cannot invest based on one news or recent event

-You need to do a lot of research before investing

-Long term trading demands a lot of patience

Passive Trading Strategies:

Buy and Hold: Involves buying and holding an asset. It’s a long-term passive play where investors purchase the asset and then leave it alone, regardless of market conditions. A good example of this in the crypto space is HODLing, which typically refers to investors that prefer to buy and hold for years instead of actively trading.

Buy the Dip: This involves averaging in as the cryptocurrency price goes down or settles. Rather than going all in, you will allocate more when the price is lower than the last high. With cryptocurrency we see many little dips, and every few weeks or so we see a bigger dip or some call it a “correction” or “crash”. At these times it is great to buy more than you typically would to build up a long position.

Dollar Cost Averaging (DCA): This involves investing a total sum of money in smaller increments.

Example: I want to invest $1200 into cryptocurrency. Rather than investing it all at once, I could dollar cost average in with $100 each month for the year to total what I intend to invest. Advantages of DCA strategy is that you save time and effort so no need to worry about timing the market, you can set up automatic investing, and it's easy and perfect for beginners.

Other Trading Strategies:

Margin - Margin trading is a key part of leveraged trading. It is the term used to describe the initial deposit you put up to open and maintain a leveraged position. When you are trading cryptocurrencies on margin, remember that your margin requirement will change depending on your broker, and how large your trade size is. The main point of margin trading is that you trade using borrowed money, that is provided by a third party. Be careful when you are trading with leverage! Yes, it increases your chance of profit, however, it also increases your chance of loss. Do not use the margin trading technique if you do not have funds to cover up that loss.

Pump and dump - a scheme that involves boosting the price of an asset through false information. When the price has gone up a significant amount (“pumped”), the perpetrators sell (“dump”) their cheaply bought bags at a much higher price. Pump and dump schemes are rampant in the cryptocurrency markets, especially in bull markets. During these times, many inexperienced investors enter the market, and they are easier to take advantage of.

Arbitrage - Arbitrage is a difference in the price of a cryptocurrency between two exchanges at the same time, is called arbitrage. For the eagle-eyed trader with the capacity to swiftly act with their trades, it can be an opportunity to make some money. Factors to consider: fees are charged by exchanges for making these transactions, plus, the need for a transaction to be confirmed on the blockchain can delay the process long enough for the window of opportunity to close before it’s executed.