5 Types of Cryptocurrency Traders

How crypto trading works in today's market

If you have ever watched Bitcoin (BTC) jump 5% in an afternoon and thought "I want in," you are not alone.

 

A cryptocurrency trader buys and sells digital assets based on price movements, aiming to grow fiat currency like the U.S. dollar or build a larger stack of crypto assets over time. That usually means watching market trends, doing basic market analysis, and using simple trading strategies with clear risk limits.

 

Unlike traditional currencies issued by a central bank, Bitcoin runs on blockchain technology, where transactions are recorded on a blockchain network, not controlled by a single institution. That structure shapes how the market behaves: it runs 24/7, volatility is higher, and market news can move prices fast.

 

The real challenge is not prediction. It is discipline. Beginners often lose money by chasing pumps, panic-selling dips, or trading too big.

 

This guide focuses on the trader types that exist and what each one actually does, so you can choose a style that fits your time and risk tolerance.

 

Who can be a cryptocurrency trader?

A cryptocurrency trader actively participates in financial trading by choosing when to buy crypto, when to sell, and when to do nothing. That is different from "set it and forget it" investing, where someone might buy cryptocurrencies and hold through multiple cycles.

 

The core trader skill is not winning every trade. It is not losing big. For beginners, the real goal is not blowing up before you learn.

 

How cryptocurrency trading works for total beginners

Most people start on a crypto exchange or crypto platform by opening an exchange account, funding it, and placing orders to trade cryptocurrencies such as trade BTC, Ethereum (ETH), or other popular pairs.

 

At a high level, trading involves:

• Choosing a regulated, secure platform with transparent, low fees

• Funding your account via credit/debit cards, bank account transfer or crypto deposit

• Executing trades using market or limit orders

• Deciding whether to trade spot assets or use leverage

 

If you are new here, understanding these mechanics before placing your first trade matters. You may browse the hyperlinks above, or read our crypto beginner's 101 article for more information.

 

In this article, we will be focusing on identifying a trading style that suits your needs, goals and lifestyle so you can best maximize your gains!

 

What type of crypto trader are you

Each trader type optimizes for a different mix of time, decision speed, and risk control. That is the simplest way to find the style that fits you.

 

Here are the main trader types you'll encounter:

• Day traders – Open and close positions within hours

• Swing traders – Hold for days to weeks

• Scalpers – Trade in seconds to minutes

• Position traders – Hold for months or years

• Algorithmic/bot-assisted traders – Use automated systems

 

Many beginners experiment with paper trading (demo accounts) or very small positions before committing to a specific style. This lets you test trading strategies without risking real capital.

 

Day traders

Day traders open and close positions within the same day. They aim to capture short bursts of volatility and avoid holding overnight. They live on technical analysis, short timeframe charts, and rapid market analysis.

 

What makes them different

• They react to fast market dynamics

• They need strong discipline because the market gives instant feedback, and it is not always kind

Beginner reality check

Day trading often looks exciting, but it also stacks decision fatigue. Many beginners overtrade because they confuse activity with progress.

 

Swing traders

Swing traders hold positions from days to weeks, aiming to capture a move within a broader trend. For beginners, this style often fits real life better because you do not need to watch the screen all day.

 

What swing traders do well

• Trade fewer times, but with more planning

• Combine technical analysis with bigger-picture market trends and catalysts

 

Why swing trading works for beginners

There is generally less noise in swing trading since you will be following the larger market trend. Since trade is not dependent on speed, there is generally more time to think and decide before trading.

 

This means there is a lower chance of emotional whiplash.

 

Scalpers

Scalpers aim for tiny moves, often entering and exiting in seconds or minutes. They rely on execution speed, high liquidity, and cost control because fees matter more when you trade constantly.

 

The real risk

Scalping punishes mistakes. One lapse in discipline can erase many small wins, especially with volatility and spreads.

 

Beginner guidance

If you are new, this is usually the wrong starting lane. Learn to manage risk first, then decide if you want to play at this speed.

 

Position and long-term traders

Position traders hold for months or years, focusing on bigger cycles and fundamentals. They still trade, but they do it with patience and rules.

 

They often track:

• Macro narratives like fiscal policies

• Major upgrades

• Adoption signals

• Supply mechanics like Bitcoin's limited supply, plus the mining-backed security model that keeps the network reliable over time

Is this style good for beginners?

Sometimes, yes. If you prefer a slower pace and want fewer decisions, position trading can be a practical starting point because it reduces overtrading and short-term noise. The trade-off is that you must be able to sit through volatility and occasional deep drawdowns without panic-selling.

 

Beginners who struggle with patience often abandon the plan at the worst possible moment.

 

Algorithmic and bot-assisted traders

Algorithmic traders use rules and automation to execute a strategy. That could be as simple as "buy when the moving average crosses" or as complex as multi-market execution.

One key detail

Bots can help you act faster, but they do not make a strategy safer. They follow your settings, and mistakes can compound if the plan is not solid.

 

For beginners, keep automation on a short leash. Use it for alerts, planned entries, and basic risk limits, not decision-making.

 

Quick comparison table of all 5 trader types

 

Core skills every crypto trader should understand

Regardless of which style you choose, certain core skills dramatically improve your chances of surviving long-term in this industry. Let's break down what matters most.

Tools, strategies, and risk basics

Every trader type relies on the same foundations:

• Basic tools like price charts and learning to read support & resistance to do technical analysis

• Simple strategies like copy trading to start, some exit strategies

• Strict risk rules like this article on risk management strategies

Security and custody basics

• Enable two factor authentication (2FA), use strong passwords, and watch for phishing

• Explore different crypto storages and consider hardware wallets for larger long-term holdings

• Know the custody model: a crypto asset service provider may hold assets for you depending on the product

Regulation and credentials

Rules differ by jurisdiction. Some frameworks cover virtual assets and service providers, such as Poland's VASP (Virtual Asset Service Provider) license.

Beginner start checklist

Start simple: pick a lane (often swing or position), open a secure exchange account, fund a small amount, begin with spot, plan each trade, and journal decisions. If consistency is an issue, our team has prepared a guide on how to build a consistent trading habit for your reference.

 

Final note

A cryptocurrency trader is not someone who trades nonstop. It is someone who can buy and sell with rules, manage risk, and stay calm through volatility.

 

Start small. Learn the mechanics. Respect the risks involved. Then scale only when your process is consistent.

 

How to buy crypto on Toobit

To buy crypto on Toobit, create an account, complete verification, and go to Buy Crypto.

 

Choose a token, select a payment method, and confirm the purchase. Your assets will appear in Spot Account once the transaction settles.

 

Congratulations, you now know how to purchase crypto on Toobit!