Technical trading bitcoin
Bitcoin Technical Analysis Technical analysis requires you to utilize a combination of tools to predict if the price of Bitcoin will rise or fall. Importantly, technical analysis provides you with more insight into the market. Consequently, the better you are at it, the more success you will have trading. Oct 23, · Bitcoin trading is the act of buying low and selling high. Unlike investing, which means holding Bitcoin for the long run, trading deals with trying to predict price movements by studying the industry as a whole and price graphs in particular. Bitcoin Trading & Technical Analysis. Is it possible to make more than $ per day by trading Bitcoin? Yes, the only thing you need is the knowledge behind the winning strategies. Learn everything there is to know about how to make money by trading Bitcoin. From the very basics all the way to .
Technical trading bitcoinBitcoin Trading - Technical Analysis Roadmap - aicrypto4.de
In this way, you are able to remove emotion from your decisions. Main Movement — The main movement is the major trend currently underway. This trend is going to encompass years of market activity. For example, the main movement in Bitcoin is bullish if you look at the complete trading history of the asset.
Medium Swing — A medium swing is a secondary market reaction. This reaction can last for up to three months. Medium swings include price retraces. Short Swing — Short swings are daily price fluctuations. A short swing can last up to a month in some scenarios. These minor movements occur due to market speculation.
As such, Bitcoin experiences short swings throughout the week on a regular basis. The accumulation phase occurs when knowledgeable investors receive some sort of valuable information that relates to them a significant change in market conditions.
This information could include knowledge acquired from inside the company or from other avenues that could affect the market. In either case, the results are the same. These investors begin buying or selling their assets in a bid to position for the news. Notably, this phase is difficult to detect as the market movements are minimal. The reason for the miniscule market adjustments is that the majority of investors are not privy to the information the first movers received.
Since only a small number of people have access to this information, these sales go unnoticed amongst the daily trading volume. Absorption occurs when the general public begins to take notice of the market trend emerging.
This participation leads to more market activity. Consequently, more investors jump on board the movement. Eventually, this scenario leads to speculation fueled by FOMO fear of missing out. If the market is tanking, investors will get scared and panic sell their Bitcoin further fueling the price drop. In this phase, early investors begin to reintroduce their accumulated holdings to the public.
These investors already realized a profit and now they are exiting their positions before the trend reverses. This exit causes the emergence of a swing that creates a price retrace in the market. Untrained investors are left with the holdings of those that were ahead of the trend. The market reacts instantaneously to all information regarding an asset. This reaction encompasses all the data surrounding the investment.
The value of your asset reflects the sum of all the hopes, fears, and expectations of all the market. News such as future regulations, major institutional adoption, and the introduction of new financial products all play a major role in the pricing of Bitcoin. Additionally, non-Bitcoin related issues can affect the price of your asset.
Occurrences such as major elections can cast doubt on the stability of an asset in the future. This scenario is especially true when speaking with new unregulated assets such as Bitcoin. Also, major events such as war, natural disasters, or pandemics affect the market value of assets as well.
The volume of an asset is the amount of market activity it experiences. In the case of a bull trend, you should notice jumps in the trading volume. This price raise should correspond with a spike in market volume.
In a pump, large investors manipulate the price of an asset using their weight to initiate price trends. This rule states that a market in motion will remain in motion until a trend reversal occurs. Basically, if you notice a large scale trend, you can expect that the trend will continue until you notice the start of another accumulation period by educated investors.
Unfortunately, it can be very difficult to successfully determine when a trend reversal is underway. The market will always have small and medium swings. These movements can make it extremely tricky to verify if a movement is actually the start of a reversal.
A careful evaluation of all outside trading factors can help you to make the right choice in these situations. Technical analysis requires you to utilize a combination of tools to predict if the price of Bitcoin will rise or fall. Importantly, technical analysis provides you with more insight into the market. Consequently, the better you are at it, the more success you will have trading. Here are some key concepts you need to understand to simplify your technical analysis.
These are the most popular time frames available on Bitcoin exchanges today. The time -frame you use depends heavily on your trading style.
For example, if you are a day trader, you will use hourly, all the way down to the minute trading window. The reason for this decision is simple. You need the most up-to-date information because you are conducting micro trades.
Day traders can open and close their trading position in minutes. Additionally, they can trade continuously throughout the day. For these actions, you need up to the minute analysis. The situation is reversed for long term traders. These traders prefer to hold their position for months and even years.
In some cases such as with HODLers hold on for dear life , they may never intend to sell their Bitcoin holdings. Long term traders depend on long term trends.
These traders need to examine months of data at the same time to get a better overview of the larger trends.
It does long term traders no service to examine the smaller fluctuations in the market. In fact, it can be counterproductive as it could cause the trader to second guess their decision. Consequently, the market cap tells you a lot about a particular asset.
When you print lots of money, inflation goes up which makes the currency value going down. There is a limited amount of Bitcoins. This holds true for the majority of the other cryptocurrencies. We will use our best Bitcoin trading strategy.
We also have training for the best short-term trading strategy. While long term traders prefer to hold their bitcoin positions for extended periods of time, day traders have discovered that Bitcoin is lucrative for many reasons:. Because Bitcoin is more volatile than other tradeable assets, there will be a high number of profitable trading opportunities occurring each day. Like ordinary currencies, using technical indicators will make it easier to tell when price increases are likely to occur.
Volume, relative strength, oscillators, and moving averages can all be applied to Bitcoin day trading. It is important to pay attention to technical indicators and developing trends. In this next step, we will talk about OBV trading and how to get started buying and selling cryptocurrencies. This is a cryptocurrency trading strategy that can be used to trade all the important cryptocurrencies.
Before we move forward, we must define the mysterious technical indicator. You'll need this for the best Bitcoin trading strategy and how to use it:. It is used to basically analyze the total money flow in and out of an instrument. The OVB uses a combination of volume and price activity. This tells you the total amount of money going in and out of the market. How to read the information from the OBV indicator is quite simple. Here you can learn how to profit from trading.
In theory, if Bitcoin is trading up and at the same time the OBV was trading down, this is an indication that people are selling into this rally. The same is true in reverse if Bitcoin was trading down and at the same time the OBV was trading up. What we really want to see is the OBV moving in the same direction as the Bitcoin price. In this regard, our team at Trading Strategy Guides uses the OBV indicator with other supporting evidence to sustain our trades and gain more confirmation.
The next step comes from the Ethereum trading strategy which will be used to identify Bitcoin trades. Now, before we go any further, we always recommend taking a piece of paper and a pen and note down the rules of the best Bitcoin trading strategy. Your chart setup should basically have 3 windows. One for the Bitcoin chart and the second one for the Ethereum chart. Last but not least, make one window for the OVB indicator.
If you followed our cryptocurrency trading strategy guidelines, your chart should look the same as in the figure above. Simply put, we are going to look after price divergence between Bitcoin price and Ethereum. Smart money divergence happens when one cryptocurrency fails to confirm the action of the other cryptocurrency. For example, if Ethereum price breaks above an important resistance or a swing high and Bitcoin fails to do the same, we have smart money divergence.
And the Ethereum trading strategy as well. In the above figure, we can notice that Bitcoin's price fails to break above resistance while Ethereum's price broke above and made a new high. This is the first sign that the best Bitcoin trading strategy is about to signal a trade. The same principles have been true for all the other major asset classes for decades. Before buying, we need confirmation from the OBV indicator. This brings us to the next step of the best Bitcoin trading strategy.
If Bitcoin is lagging behind the Ethereum price it means that sooner or later Bitcoin should follow Ethereum and break above the resistance. Simply put, the OBV is a remarkable technical indicator. It can show us if the real money is really buying Bitcoin or if they are selling. What we want to see when Bitcoin is failing to break above a resistance level or a swing high, and the Ethereum already broke, is for the OBV to increase in the direction of the trend.
We also want it to move beyond the level it was when Bitcoin was trading previously at this resistance level see figure below. Here is how to identify the right swing to boost your profit.
Now, all it remains for us to do is to place our buy limit order, which brings us to the next step of the best Bitcoin trading strategy. Once the OBV indicator gives us the green signal, all we have to do is to place a buy limit order. Place the order at the resistance level in anticipation of the possible breakout. After all, we told you the OBV is an amazing indicator. Now, all we need to establish is where to place our protective stop loss and when to take profits for the best Bitcoin trading strategy.
Placing the stop loss below the breakout candle is a smart way to trade. When it comes to our take profit, usually an OBV reading above , is an extreme reading that signals at least a pause in the trend. This is where we want to take profits. In the figure below, you can see an actual SELL trade example, using the best Bitcoin trading strategy. While bitcoin day trading does have some risks, there are many ways these risks can be reduced. Here are some of the top ways to enhance your Bitcoin trading strategy.
Maybe one day our fiat money system will go under and be completely replaced by cryptocurrencies. However, as long as there are still profits to be made from Forex currency trading we encourage you to read our receipt for Forex trading success: How to Make Money Trading — 2 Keys to Success. We hope that The Best Bitcoin Trading Strategy — has shed some light on how you can use the same technical analysis tools that you use for trading the Forex currency market to now trade the cryptocurrencies.
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Long Short. Oil - US Crude. Wall Street. More View more. Free Trading Guide. Get My Guide. Show technical chart Show simple chart Bitcoin chart by TradingView. The Bitcoin price is prone to volatile swings; making it historically popular for traders to speculate on. Follow the live Bitcoin price using the real-time chart, and read the latest Bitcoin news and forecasts to plan your trades using fundamental and technical analysis.
S2 S3 R1 R2 R3 Pivot Points P S1 Daily Classical Pivot Points. Last Updated: Dec 24, Does Bitcoin? Real Time News.