5 Best Trading Litecoin Strategies

With thousands of cryptocurrencies in the market and new tokens launching all the time, choosing what to trade can feel overwhelming for you. But you don’t always have to chase the latest coins. Litecoin (LTC), launched in October 2011, has stood the test of time and remains one of the most actively traded crypto assets.

Often called “digital silver,” LTC sees billions in daily trading volume according to Coingecko data, giving you the liquidity and market depth needed for profitable trades. But if you want to maximise your earnings, you need the right strategies.

In this article, you’ll discover the five best Litecoin trading strategies to help you trade smarter and boost your profits. They include: 

• Scalping 
• Dollar-cost averaging 
• Keeping a close eye on market trends and news
• Using technical analysis 
• Using stop-loss 

Ready to explore these trading options? Read on! 

Litecoin Trading Strategies 

1. Scalping

One of the many standard techniques of LTC trading is scalping. This strategy involves detecting short-term price changes in an asset and capitalising on them for profits. In other words, scalping is a short-term trading strategy involving quick trades to profit from small price movements in an asset such as LTC. 

This strategy involves entering and exiting trades quickly without waiting for long-term trends. Notably, scalping works best in highly volatile markets, where frequent price fluctuations create more profit opportunities. 

Additionally, from my experience as a successful scalper, lower time frames, such as 5 minutes, 30 minutes, or 1 hour, are best for analysing price charts for trade entry, exit, and stop loss. 

2. Dollar-cost averaging

Dollar-cost averaging (DCA) is an investment strategy in which you divide your capital into smaller amounts and invest at regular intervals rather than making a lump-sum purchase. The interval could be daily, weekly, biweekly, or monthly. This approach helps alleviate the impact of market volatility and ensures you get a balanced average price over time. 

Let’s say you have $100 to invest in LTC. Instead of using the $100 to make a one-time LTC purchase, you can make two purchases using $50 each or four purchases using $20 each, all at different prices and set intervals. If you plan to HODL your Litecoin investment for the long term, DCA is the best strategy for you.

3. Keep a close eye on market trends and news.

The crypto market is highly volatile, and how quickly you catch on with trends and news can determine whether your trade is profitable.  For instance, a news article reveals that a whale is opting out of their Litecoin investment. More often than not, this might lead to a dip in the price of LTC due to the sell-off. 

Accordingly, keeping a close eye on ecosystem developments means you get timely insights on whether you should enter or exit an LTC trade. Notably, market trends can change at any time amid new developments in the space. Therefore, following market trends and learning fundamental analysis are among the best strategies for Litecoin trading. 

4. Use technical analysis

Like every other cryptocurrency, Litecoin’s price is prone to high volatility, which causes it to form different chart patterns. While volatility can be a problem for traders, especially beginners, mastering technical analysis can help you navigate the crypto market profitably. 

For context, technical analysis uses historical price data and indicators to ascertain future price actions of a particular crypto asset. Technical analysis knowledge is a valuable tool in deciding entry, take-profit, and stop-loss prices when engaging in LTC trading. 

Several technical indicators, including Bollinger Band (BB), Moving Averages (MA), Moving Average Convergence Divergence (MACD), and Relative Strength Index (RSI), can help you know when a trend is about to change. 

While each of these indicators can help you predict an asset’s price action, it is advised that you don’t make a Litecoin price analysis based on one indicator alone. In other words, a combination of various indicators and candlestick patterns can help you make a more precise LTC price analysis. 

5. Normalize using stop loss

One of the reasons many crypto traders always experience liquidation is their refusal to place stop-loss in trades. You don’t joke with your stop-loss if you are a risk-averse trader. 

As the name implies, the stop-loss feature helps you put a limit to how much you’re willing to lose if a trade fails to go as planned. Without a stop-loss, your emotions can take over, causing you to make panic decisions or hold onto a losing trade for too long.

Let’s say you buy LTC at $30, expecting to sell it at $40, booking a $10 profit. However, if the market moves against you and the price of LTC drops, a stop-loss can protect you from excessive losses. For example, if you set a stop-loss at $25, your trade will automatically close if the price falls to that level, limiting your loss to $5 per LTC instead of risking a deeper decline.

Sure, there are many instances where placing the wrong stop-loss caused crypto traders to lose profits. Thus, the best place to place a stop-loss is below the asset’s most critical support level from your entry price. A well-placed stop-loss ensures that your risk is managed, allowing you to trade with discipline and confidence.

Frequently Asked Questions (FAQs) About Litecoin Trading Strategies

What affects Litecoin’s price?

Like every cryptocurrency, Litecoin’s price is affected by supply and demand. When the buying pressure surpasses the selling pressure, the price moves up. Factors like scarcity and market sentiment also affect the LTC price. Additionally, Bitcoin’s price action can influence the price of LTC. 

How can I sell my Litecoin? 

I have you covered if you want to sell your Litecoin for cash. With the Breet App, you can swap your Litecoin seamlessly for money anywhere in Nigeria or Ghana. 

What are Litecoin trading hours?

Generally, the crypto market doesn’t pause or go on weekend breaks like the Foreign exchange trading. Thus, Litecoin can be traded 24/7. You can trade Litecoin at any time and from anywhere. 

Is it a good idea to trade Litecoin?

Litecoin is a well-known cryptocurrency that has existed in the crypto market for many years. LTC has grown significantly in value since its launch, giving savvy investors and traders huge profits. Hence, trading LTC is a good idea. However, you must be well-equipped with back-tested trading strategies to help you use the coin’s volatility for your gain. Remember, you always sell your Litecoin for cash on Breet. 

How does Litecoin trading differ from Bitcoin trading?

Both Bitcoin and Litecoin are cryptocurrencies. In other words, you can use the same strategies or methods to trade both of them. So, Litecoin trading is not that different from Bitcoin trading.