Top 5 Strategies To Become Profitable In Crypto Trading

Introduction

If you’re a crypto trader looking to improve your results, you’ve come to the right place. With over 9 years of hands-on experience in the crypto space, we’re revealing the top 5 strategies that have helped us achieve consistent profitability. These battle-tested approaches have proven effective across various market conditions and can significantly enhance your trading performance.

Strategy 1: Level-to-Level Swings on Daily Charts

One of the most reliable approaches in crypto trading is identifying and trading level-to-level swings on daily timeframes. This strategy focuses on key support and resistance levels that have been tested multiple times.

How It Works: The daily chart provides a clear macro view of price action, filtering out much of the noise that plagues lower timeframes. By identifying significant support and resistance levels where price has previously reacted, you can anticipate future bounces or rejections at these zones.

Implementation Tips:

• Mark horizontal levels where price has shown strong reactions at least twice
• Wait for price to approach these levels and look for confirmation signals
• Enter trades when price bounces off support or gets rejected at resistance
• Set stop losses just beyond the key level to manage risk
• Target the next significant level for your take-profit

Why It Works: Markets have memory, and traders collectively respect levels where major buying or selling has occurred previously. Daily charts remove emotional short-term fluctuations and help you focus on high-probability setups.

Strategy 2: Bollinger Bands at 1.5 Standard Deviation

While most traders use the default 2.0 standard deviation setting for Bollinger Bands, using 1.5 standard deviation provides earlier signals and captures moves more frequently.

How It Works: Bollinger Bands measure volatility and potential overbought or oversold conditions. The 1.5 standard deviation setting creates tighter bands that touch price action more frequently, offering earlier entry and exit signals.

Implementation Tips:

• Apply Bollinger Bands with 20-period moving average and 1.5 standard deviation
• Look for price touching or breaking the lower band as potential buy signals in uptrends and vice versa in downtrends
• Consider taking profits when price reaches the upper band when long and vice versa when short.
• Combine with other indicators for confirmation
• Watch for “band squeezes” which often precede explosive moves

Why It Works: The 1.5 setting provides a balanced approach between sensitivity and reliability. It catches moves earlier than the standard 2.0 setting while still filtering out most false signals. In the volatile crypto markets, this adjustment can significantly improve timing.

Strategy 3: 12/21 EMA Crossover Strategy

The exponential moving average (EMA) crossover is a classic momentum strategy that identifies trend changes early and keeps you on the right side of the market.

How It Works: This strategy uses two EMAs: a faster 12-period EMA and a slower 21-period EMA. When the faster EMA crosses above the slower one, it signals bullish momentum. When it crosses below, it indicates bearish momentum.

Implementation Tips:

• Enter long positions when the 12 EMA crosses above the 21 EMA
• Enter short positions when the 12 EMA crosses below the 21 EMA
• Use higher timeframes (4H or daily) for more reliable signals
• Avoid trading crossovers during choppy, sideways markets
• Combine with volume analysis to confirm the strength of the move

Why It Works: EMAs give more weight to recent price action, making them responsive to current market conditions. The 12/21 combination provides a sweet spot between speed and reliability, catching trends early while avoiding excessive whipsaws.

Strategy 4: 8 EMA on H1 and Daily Charts

The 8 EMA is a powerful dynamic support and resistance indicator that works exceptionally well when viewed across multiple timeframes, specifically the 1-hour (H1) and daily charts.

How It Works: The 8 EMA acts as a magnet for price during trends. On the daily chart, it identifies the primary trend direction, while the H1 chart provides precise entry timing when price pulls back to this moving average.

Implementation Tips:

• First, identify the trend on the daily chart using the 8 EMA
• If price is above the daily 8 EMA, look for long entries only
• Drop down to the H1 chart and wait for pullbacks to the 8 EMA
• Enter when price touches or slightly penetrates the H1 8 EMA
• Place stops below recent swing lows (for longs) or above swing highs (for shorts)

Why It Works: This multi-timeframe approach aligns your trades with the dominant trend while providing low-risk entry points. The 8 EMA is fast enough to stay close to price during trends but smooth enough to avoid false signals.

Strategy 5: 200 MA on H4 and Daily Charts

The 200-period moving average is widely regarded as the ultimate trend filter and works brilliantly on 4-hour (H4) and daily timeframes for crypto trading.

How It Works: The 200 MA represents the long-term equilibrium price. When price is above it, the long-term trend is bullish. When below, the trend is bearish. This indicator acts as a crucial decision-making tool for trade direction.

Implementation Tips:

• Check the daily 200 MA first to determine the primary trend
• Use the H4 200 MA for intermediate trend confirmation
• Only take long trades when price is above both the daily and H4 200 MA
• Only take short trades when price is below both moving averages
• Watch for bounces off the 200 MA during trends for entry opportunities
• Be cautious when price is chopping around the 200 MA (indicates indecision)

Why It Works: The 200 MA is one of the most watched indicators by institutional and retail traders alike. It creates a self-fulfilling prophecy effect where traders collectively respect it as a significant level. Trading in alignment with the 200 MA dramatically improves your win rate.

Bonus Strategy: Funding Fee Arbitrage

For more advanced traders, the funding fee arbitrage strategy offers a market-neutral way to profit from perpetual futures markets.

How It Works: Perpetual futures contracts use a funding rate mechanism to keep their price anchored to spot prices. When markets are extremely bullish, funding rates can become excessively high (sometimes 0.1% or more every 8 hours). You can exploit this by simultaneously buying the spot asset and selling an equivalent amount in perpetual futures.

Implementation Tips:

• Monitor funding rates across exchanges (use aggregators like Coinglass)
• Execute the strategy when funding rates exceed 0.05-0.1% per 8-hour period
• Buy the exact amount in spot and short the same amount in perpetuals
• Collect funding fees while remaining market-neutral
• Close both positions when funding rates normalize
• Account for exchange fees and potential price discrepancies

Why It Works: This strategy profits regardless of price direction because you’re hedged. You’re essentially getting paid by over-leveraged long traders while taking on minimal directional risk. During extreme market euphoria, this can generate substantial returns with lower risk than directional trading.

Final Thoughts

These five strategies (plus the bonus) represent proven approaches that have consistently delivered results across different market conditions. The key to success isn’t just knowing these strategies, but implementing them with discipline, proper risk management, and patience.

Remember:

• Never risk more than 1-2% of your capital on any single trade
• Always use stop losses
• Journal your trades to track what works best for you
• Backtest strategies before risking real capital
• Markets change, so continuously adapt and refine your approach

Start with one or two strategies that resonate with you, master them completely, and then gradually incorporate others. Consistency and discipline will always beat complexity and over-optimization.

Happy trading, and may you become a profitable trader.

Trade on MEXC Zero Fee.