How to trade Crypto
Are you a crypto trader looking to improve your fortunes? Are you new to the crypto world? Then this post is for you. Here we look out the basic knowledge every crypto trader should have.
We also look at some crypto strategies and how to enter trades by using them. We have also made recommendations for crypto exchanges and the best crypto trading signal platforms for some of the ranking cryptocurrencies like bitcoin.
Things you must know before starting a crypto trading
There are a lot of posts out on the internet with this theme, but here we have studied bitcoin and other altcoins markets and come up with these points.
Keeping the knowledge below at the back of your mind always is a sure way to the potential profit in the crypto market.
- Money Capitalization
Tokens with a high market cap and enormous circulating supply are hypothetically less vulnerable against control and wild volatility, though littler market cap coins can see wild value springs on positive or negative news. A little market cap coin with small circulating supply is additionally regularly vulnerable against control by huge holders.
- Trading volume
Ordinarily, this isn’t an issue for the best 20 tokens recorded on crypto exchange information providers like Binance. Yet, as traders start to explore increasingly obscure smaller market cap altcoins, it’s critical to examine what number of tokens are really being purchased and sold consistently.
- Stop-losses and taking profits
While this tip is anything but a metric that plays into digital asset analysis, it is staggeringly critical to have a plan for each trade.
This encourages one not to succumb to emotion-driven trading. Great financial specialists build up a game plan for the price at which they mean to purchase and sell an asset without veering off from this plan.
Some portion of this procedure incorporates pondering about moves one will make if the trade goes belly up.
A stop-loss request secures investors against a huge loss of assets by selling the asset at a foreordained value somewhat underneath the buying cost.
Stop- losses ensure against this and most traders suggest that a stop-loss be set 2 to 4% underneath the buying price.
With this stated, it is additionally essential to take note of that in the cryptocurrency market, stop hunts or stop runs are the typical practice that more prominent financial investors use to compel smaller investors out of their positions.
Investors will in general, position their buy and sell orders around an asset’s resistance levels, and during a stop hunt, enormous investors and whales push the price toward a path that can trigger a lot of stop orders and lead to an exceptional change in the asset’s price.
Brokers can abstain from turning into a casualty of a stop run by putting in their sell stop requests somewhere away from resistance and support areas.
Safely storing your cryptocurrency
Since you have your crypto investment, the following crucial step is deciding how and where to store it securely.
While keeping your Bitcoin and some other crypto money on your exchange is an alternative, the counterpart hazard makes this strategy less secure and clever to be stayed away from if possible, especially for significant sums.
Once in a while, the clients get repaid, and other times they don’t, in any case, this is certainly a risk that each digital asset holder must know about when giving up authority over their assets to some trusted entity.
Putting resources into digital currency doesn’t need to be troublesome or dangerous. Investors need to have a plan before making a move and each responsible trader consistently does their very own analysis before investing in any asset.
How to trade cryptocurrency
Learning how to trade cryptocurrency involves employing a lot of analysis and strategies. Although most of them do work and yield profits, some are guaranteed to boost profit margins.
Since bitcoin is the number one cryptocurrency and in recent years has become the hottest trading market in the world as compared to stock trading and gold trading, we use it as a reference.
Before you start trading bitcoin, you must first of all, open a bitcoin wallet. You should consider going through this step by signing up with a reputable cryptocurrency broker. Some of these brokers have special offers and deals on signing up.
Next, you have to begin to actively seek the best possible solutions to trade and how to invest money in bitcoins.
You can do a trial and error practice on some analysis though it is recommended you use a demo account for this.
You should bear in mind that the best trading strategies ought to be the ones that are non-dependent on bitcoin price; that is, it can be deployed whether the price is fluctuating either upwards or downwards.
The market is highly volatile and still trade even when the day has ended, so you are always at risk of losing money.
Before taking any position, ensure you have a solid plan in place. It is also essential to note that these strategies can be used even in other crypto markets.
These strategies include day trade crypto strategy and swing trade crypto strategy.
How to day trade crypto
The unique character market requires that you have a firm knowledge of how it works before day trading. Here, we will provide you with what you need to navigate this strategy successfully.
Day trading crypto requires the right timing and good liquidity to enter the make with precision. The major scope behind day trading is to identify trading opportunities that offer potential for quick profits.
Its name does not suggest you have to trade every day. Avoid trading on weekends and low-volume days. Here are a few steps to how to day trade crypto while making a buy trade.
The money flow index indicator
- Pick coins with high volatility and high liquidity
- Apply the money flow index indicator
- Wait for the money flow index to hit the 100 level
- Buy if mfi= 100
- Hide your security stop loss below your position and take profit after 60 minutes of taking the position
On balance volume indicator
- Overlay bitcoin chart with ethereum chart and the OVB indicator
- Identify smart money divergence between bitcoin price and ethereum price
- Look for the OVB to increase in the direction of the trend
- Put a buy limit order at the resistant point to attempt catching the possible breakout
- Place your stop loss below the breakout candle and take profit at OVB 105000.
How to swing trade crypto
Intermediate periods are used to look for market trends and open positions. As with the name, we are looking for scenarios where crypto prices are likely to swing downwards or upwards.
These fluctuations are what crypto traders are banking on to make progressive trades. There are so many indicators used in swing trading.
When the indicators pick up trends in between 3-15 periods, we check to determine for resistance or support. Next is to look for reversals or countertrends. If the countertrends are clearer, you can pick a position.
The idea is to enter the make when the countertrend swiftly reverses and price swings occur. There are some advantages to learning how to swing trade crypto. They include
- It gives great risk to reward trading opportunity that means small money for more substantial profits
- It aids the trader get rid of intraday noise and trade smartly
- The use of technical indicators ensures traders do not risk making speculative trades but informed decisions.
- Unlike day trading, you need not stay glued to your screen for a whole day
Like every other strategy, the swing trade has a couple of risks involved with it
- Risks of trades overnight or weekends- this can lead to incurring avoidable losses
- Sudden reversals bring losing positions
- Traders are easily caught off guard if price trends do not play out as predicted.
Swing trading with Bollinger bands indicator
Developed by John Bollinger, it is used to spot overbought and oversold positions in the market.
It makes use of price changes. It is composed of three averages
- a central average- simple moving average
- Two other moving averages at both sides of the central average. They are at a distance of two standard deviation from the central moving mean.
Below are a few steps on how to swing trade crypto using this indicator
- Wait for the price to reach the upper Bollinger band
- Wait for the price to break underneath the middle Bollinger bands
- Look for the breakout candle which is a big, bold candle that closes near the low range of the candlestick
- Sell at the close of the breakout candle
- Hide your protective stop loss above the breakout candle
- Take profit once it breaks and close back above the middle Bollinger bands
Crypto trading signals
They are advice or suggestions generated through analysis. They can be used to enter either a buy or sell trade. There are three types of market analysis used to generate crypto trade signals. They are
- Technical analysis
- Fundamental analysis and
- Sentiment analysis.
However, the fundamental and technical methods are used to generate the best crypto trading signals because of their more significant efficiency. Psychological and emotional parameters may govern sentiment analysis.
Furthermore, algorithms can be programmed to give crypto trade signals based on certain technical indicators. Therefore, the primary objective of any signal would be to provide investors with informed advice.
It should have a precise entry point and a stop loss and take profit levels. The programmed analysis can be automated to form trading bots that provide crypto trading signals while also eliminating the psychological and emotional sides of the trading procedure that is inherent with humans.
How to generate crypto trading signals
There are tons of ways to generate signals from the crypto market. The crypto market is quite young, so traders do not have the data, resources or expertise to generate these signals themselves.
This has lead to so many signal providers in today’s market. Bots like DEXbot from bit shares are the most common generators of crypto trading signals.
They are programmed to identify specific patterns based on some indicators. They can either inform the trader or automatically make the trade on the trader’s behalf.
Social media networks have also influenced the circulation of crypto trading signals over time. Crypto trade signals telegram, crypto trade signals WhatsApp are some of the social platforms used to circulate signals.
Crypto trade signal telegram is popular among younger traders because they allow users to replicate trades of the other users automatically.
The biggest aim for the generation of crypto trade signals is to offer an inexperienced trading market informed decisions as most traders depend on crypto signal providers like
My Crypto Paradise to feed them ideas and suggestions. Whether you generate ideas yourself, depend on signal providers, mirror other traders’ trades or using a bot, the goal is always the same.
At MyCryptoParadise, we offer people the opportunity to get the best crypto signals and enhance your trading proficiency.
You could sign up for a free trial or buy a membership on our platform. We provide users a path to financial freedom through the crypto world.
In ParadiseFamilyVIP members group, you get up to 9 best crypto trading signals on Binance, Bitmex, and Bybit every day. You also get daily insights on the market, cryptoanalysis, daily updates and so much more.
Our trades review each crypto signal for accuracy using our hybrid set of market indicators and risk management strategies before sending it out to the VIP group. This is to ensure high profits and low risks.
Our crypto trading signals and coaching are through the crypto trade signal telegram platform. It is because of its proven reliability and accessibility.
Learning how to trade cryptocurrency is simple to start but bear in mind that there are some essential factors that you need to understand for you to have a profitable experience.
Always remember to open a wallet that is reputable (Coinbase, Binance, Bitmex and Bybit) to ensure the security of your assets.