How to Buy Cryptocurrencies Low and Sell High

The Cryptocurrency market is a volatile one hence the reason for the many risks involved.

The Cryptocurrency market is a volatile one hence the reason for the many risks involved. It is general knowledge that the buying and selling of Crypto are highly technical and traders have to be on top of their game in order to make more money.

However, consumer views revealed that while some people are wailing about the losses they have made, some people are still making massive profits from the market. And this is possible because they have mastered the art of how to buy Cryptocurrency low and sell high. 

So, how do you buy Cryptocurrency low and sell high to make a profit? Well, there’s a Cryptocurrency strategy called Arbitrage.

Arbitrage is the process of buying a Cryptocurrency project low and then selling high. Only that this is done simultaneously. For example, you could purchase a particular crypto project in a currency and then sell that project almost immediately to a different currency that has a higher value for the project. Automatically, you make a profit.

Here are a few ways you could buy Cryptocurrency low and then sell high

  • Simple Arbitrage

Simple arbitrage is one of the various ways you could practice buying cryptocurrency low and selling high, and just like its name, it is quite simple to master.

This is the process of buying and selling cryptocurrency projects simultaneously. In simpler terms, this means that you sell your crypto project immediately after you buy it and still make a profit. The only catch here is that the trade may need to be done on different exchanges.

  •  Triangular Arbitrage

 Just like its name suggests, it’s a type of buying cryptocurrency low and selling high that can be done with three currencies. 

For instance, you could buy a project using AUD and then sell it in USD, after which you convert it to another currency again to make a profit. 

Now, this type of rare inconsistency occurs between three currencies, especially when their exchange rates have differences. People who can take advantage of this are people who have come to understand how the system works and they have the software to run the trade.

  • Convergence Arbitrage

This is a “buy low, sell high” trading strategy that requires the price value of two similar projects to converge. What this trading strategy requires patience from the trader.

In simpler terms, convergence arbitrage is buying similar cryptocurrency projects at a future date and waiting patiently for them to deliver. In this trading strategy, your profit is equal to the level of convergence.

  •  Future Index Arbitrage

This Arbitrage trading strategy is one that is quite similar to convergence arbitrage, but more advanced. This involves depending on the future priced value of a project to make a profit.

This advanced strategy allows you to purchase a cryptocurrency project as a future project, thereby making a profit when the project meets your projected value.

Conclusion

You could practice any of the above methods of buying low and selling high, however, buying cryptocurrency low and selling high is a process that needs to be mastered because you would be trading on the lifeline of your prediction skills.