Trading strategy for bitcoin
Bitcoin Trading Strategy For Beginners - aicrypto4.de The arbitrage trading strategy is conceptually very straightforward. Put simply, it is the simultaneous buying and selling of an asset to make a financial gain on its price difference between two markets. Mar 24, · Trend trading is a strategy that relies on the current trends in the Bitcoin world. You’ll need to keep a close eye on what others are talking about and plan to do. For example, bitcoin became incredibly popular in , when the price rose to almost $20, per BTC. Bitcoin trading can be extremely profitable for professionals or beginners. The market is new, highly fragmented with huge spreads. Arbitrage and margin trading are widely available. Therefore, many people can make money trading bitcoins.
Trading strategy for bitcoin4 Bitcoin Trading Strategies To Use in - NorseCorp
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. Ready to get started? Tap here now to get the E-Book Completely Free! Please Share this Trading Strategy Below and keep it for your own personal use! Thanks, Traders! We specialize in teaching traders of all skill levels how to trade stocks, options, forex, cryptocurrencies, commodities, and more.
Our mission is to address the lack of good information for market traders and to simplify trading education by giving readers a detailed plan with step-by-step rules to follow.
Will this system continue to crank out big gains in the second half of and beyond? No one knows. Similar to the long-only volatility breakout system above, this one also takes fast gains, whenever the market offers them:. A modified ParaSar swing trading system at work in Litecoin.
This style of long-only breakout system may work best in an uptrending bull market, or after bullish reversals from major lows. Securing high-probability gains quickly can help eliminate the risk of subsequent, adverse market action. Regardless, the basic ParaSar buy signal, volatility expansion, volatility trailing stop and ATR-based profit target concepts presented can offer you the raw materials needed to build and then fine-tune your own trading system — on bitcoin, Litecoin, or any other altcoin.
Spend at least as much time researching and internalizing the following concepts as you do the pure technical indicators needed to trigger your entry and exit signals:. Building your bitcoin trading system is relatively easy once you understand the basics of market price action.
Studying tens of thousands of charts in real-time can also provide you with an even keener, intuitive sense of probable market direction. What is a bitcoin trading system? Also, contemplate the fact that without a pro-level understanding of trade sizing and trading psychology, it will be difficult for you or any other bitcoin trader to experience the joy of a steadily rising account equity curve, month after month, year after year.
Devote as much time as you need until you master the art of trade sizing and trading psychology before risking a single dollar in the bitcoin or altcoin markets. To learn more about bitcoin trading and investing, leverage the knowledge base found in the Bitcoin Market Journal weekly newsletter. Subscribe today! All trading systems were constructed by me with the tools included standard in TradeStation Sign up for our newsletter and keep us honest.
Proven Stats Can Provide Trader Confidence Bitcoin traders who have rock-solid faith in their properly tested trading system stats are the ones who stand the best chance of reaping consistent gains over time. Who Are You? Your first task in constructing your bitcoin trading system is to evaluate your own investment psychology: Do you prefer to limit bitcoin market exposure to 14 days or less?
The phenomenon that is Bitcoin has gripped the mainstream market primarily due to the fact that the digital currency has shown it is a good way for people to make money.
Bitcoin, first thought of as a currency, and then as a digital gold, has also permeated the investing space and become a hot new asset that is one of the best ways to make money.
Another reason Bitcoin has become so popular in the trading space is that, as an asset, it ticks some of the boxes that make it highly profitable — when the right trading system is used. The high volatility of the asset, coupled with its global liquidity and availability, means that there are a number of ways in which Bitcoin trading can be affected. However, determining the best investment strategy, and how to start trading Bitcoin for profit , requires a bit of research and knowledge as there are a number of options available to traders, but they all have their strengths and weaknesses.
Beginning on your Bitcoin trading journey is very easy. In fact, as compared with more traditional means of trading and investing, Bitcoin is one of the simplest, and most inclusive. All a trader really needs to begin trading is a Bitcoin wallet , and all a person needs to get a Bitcoin wallet is a smartphone.
A Bitcoin wallet allows a person to buy, hold, and sell Bitcoin straight away — usually through an exchange which can be linked to the wallet. Simply buying, holding and selling Bitcoin is an actual trading strategy, and one of the more popular ones at that. Once you have a Bitcoin wallet, you are then able to purchase Bitcoin through traditional means, like bank payments or card purchases, and from there, you can use you Bitcoin on various platforms that are amenable to different trading strategies.
For instance, a platform like Binance offers futures trading options on Bitcoin and other cryptocurrencies — and that may be the trading strategy you use as the best way to make money off of cryptocurrencies. Then again, PrimeXBT offers margin trading services and that would suit your Bitcoin trading strategy better. Open free account. Bitcoin has been around for over 10 years now, but in terms of it being an investable and tradable asset, that drive has only come recently.
The biggest advantage that Bitcoin has over other traditional stocks, bonds, assets and commodities is that it is a volatile market. Volatility is often seen as a bad thing, but it is a double-edged sword, and for Bitcoin, the majority of its volatility has been in an upwards trajectory making it an asset that offers high profitability.
More so, Bitcoin is easy to acquire and an inclusive asset that needs a person to only own a smartphone and have as little as10 to their name to begin trading.
Bitcoin trading is also designed to be easy for these very reasons. Many of the platforms that offer trading have attempted to make it easy and uncomplicated to attract new users to the space. Bitcoin is also an asset unlike any other.
It operates a bit like a digital gold, in that it does not exist in the physical realm and has the properties of gold when it comes to accruing value, but it is also decentralized, which means there is no one entity that controls it. So, when you invest in a stock, your stock price can fluctuate depending on what businesses decisions the company takes, but that does not happen with Bitcoin.
Other advantages to trading in Bitcoin include the fact it has a transparent, immutable ledger to track and trace transactions. It is a scarce resource with there only ever being 21 million in existence, it has low transaction fees which are often taken into consideration by certain trading platforms, and probably — most importantly, Bitcoin is the best performing asset of the last decade by a considerable margin.