Cryptocurrency trading is now more profitable than running a hedge fund. Traders are making a killing from buying and selling cryptocurrencies, ICOs and blockchain assets.
Imagine if you had waterput $100 into Litecoin ter December 2016. Today, 7 months zometeen, you would have $Two,400. A whopping 2300% terugwedstrijd!
Traders are making super enormous profits by buying low and selling high
Spil ordinary spil this strategy sounds on paper, it is tighter to pull off te real time. You need to look at a price chart and determine whether it is a right time to buy or not.
The last thing you want is to buy at the top and see prices tumble down to a low.
The most profitable traders know
- How to time an ideal entry price when the market about to budge up
- How to stay waterput, control emotions and wait
- When to sell and book profits.
If you are looking to make profits, make use of thesis Five certified cryptocurrency trading implements to help you time your entries, know when to hold and most crucially when to sell and take profit.
Five Certified contraptions for making money trading cryptocurrencies
- Moving averages lines
- Price support and resistance levels
- Trading patterns
- Elliott Wave Analysis
Candlesticks are a mechanism of indicating prices of cryptocurrencies on charts. They are an improvement on plain line charts because they carry more information about market activity than line charts. A large segment of cryptocurrency traders uses candlestick charts.
Candlesticks include four prices te one diagram. You can quickly tell the highest and lowest bid price and the opening and closing price of the day by looking at one candlestick. Candlesticks are pretty accurate at capturing market sentiment during trading sessions.
Technical Chartists determine when to inject or uitgang a trade by reading candlestick patterns. They are consistent across all time zones from the shortest 1 minute chart to yearly charts. There is no reason why you too cannot interpret patterns to arrive at a trading decision.
Some examples of patterns include:
A hammer is an example of a candlestick that forms after a long downtrend. It signals fading momentum of the prior trend and a take overheen by buyers. You will spot it at the bottom of a trend before price reverses to an uptrend.
This pattern resembles a bang hammered plane into a houtvezelplaat. The long wick and petite head indicate a strong rejection of bears’ efforts to sell. Instead, bulls take overheen and buy, forcing the price to close above previous prices.
The hammer is a high confidence buy signal.
A bearish devouring is a sample pattern that forms at the top of a bull trend. When you see it on a chart, expect a possible switch te market direction. The pattern emerges spil a brief white candlestick overshadowed by a longer black candlestick.
You will notice this pattern after an uptrend momentum is fatigued. Bears come te at the top and sell cryptocurrencies forcing prices to druppel and kickstart a switch te direction.
Your strategy at this point should be to reduce part of your position. Wait for a third candlestick the following period to confirm a utter reversal and uitgang.
Two) Moving averages lines
Moving average lines are part of a group of charting contraptions known spil indicators. They come te two forms: exponential and plain moving average lines.
Moving averages aggregate past prices and average them out overheen a period. The formula for both elementary and exponential moving averages varies. A 20-day moving average line, for example, sums up the closing prices of a digital asset divided by 20 days that make up the period. This cuts out the noise of day to day price movements and gives you get a clearer picture of price direction.
The most typical time frames for cryptocurrency charts are the 7, 21, 30, 50, 100 and 200-day moving average lines. You can tweak the days to getraind your proefje.
- Trading signals from moving average lines: Bullish and bearish cross
Both long term and brief term moving average lines combine well for strategic buy entry and close uitgang signals.
A bearish and bullish cross are two commonly used signals for uitgang and coming in a position respectively.
Ter a bearish cross, the shorter term moving average say 21, cuts below the longer term moving average say 50. This cross signals an expected bear trend and an uitgang for you.
Te a bullish cross, a brief term moving average line such spil 7 cuts above a long term moving average line like 50. This cross translates to entry price signal for you.
Spil you read your charts, add exponential and ordinary moving average indicators to refine your buy and sell strategy.
Trio) Price Support and resistance levels
Resistance levels act against an upward momentum of price. Price is coerced to halt, haul sideways or pauze down. A switch of trend and direction goes after at this level. Similarly, support levels shove against price but te a downward momentum. Price bounces off a support level or may haul sideways. Eventually, price resumes the uptrend using support spil a launch padachtige.
Resistance and support levels are psychological and persist overheen years, months, weeks or days. Because all traders see thesis price levels and expect the same price behavior, it reinforces the significance of thesis levels. The crowd acts collectively to reduce or add to their trading position.
Sell some of your position at resistance levels, add to your position at support levels.
Support levels are excellent signals for adding to your trading position. At strong resistance levels, you want to sell some of your cryptocurrency holdings. Wait for price to turn direction, find a support zone and buy back te.
Four) Trading patterns
You can trade profitably by identifying patterns and trading on the expected price direction. Cryptocurrency charts often form patterns that give a big picture outlook of where price is likely to head te the future. Chart patterns reoccur te both bear and bull markets. Once you spot a familiar pattern, you can quickly tell which price direction to expect.
Some of the most common patterns te cryptocurrency charts include:
The head and shoulders pattern is a reversal pattern and signals the end of a trend. It resembles a head, flanked by a right and left shoulder. The head and shoulders surplus on the neckline. If you are keen, you will see how this pattern forms on different time zones.
When spotted at the top te an uptrend, it is known spil a Head and shoulders pattern. Its alternative is the inverse head and shoulders pattern that shows up at bottom reversals.
Sell on the pauze of the right shoulder te a downtrend, buy the pauze of the neckline ter an uptrend
The sell or buy signal is clear when the right shoulder is about to finish and pauze the neckline. Price violates the neckline strongly and proceeds on the opposite trend.
You want to sell at the neckline when you see this pattern at the top and buy at the neckline when you spot it at the bottom.
- Bull and bearish flags or pennants
Flag and pennant patterns are continuation patterns. When flags show up, the momentum of the prior trend is still te force. You will spot this pattern te both uptrends and downtrends.
The formation of flags and pennants resembles a flag on the end of a pole. Both pennants and flags are a makeshift pause ter the trend.
Control your emotions during bullish and bearish pennant flags continuation
Ter uptrends, bullish flags and pennants signal higher prices ter future. You should add to your long position or buy more. Ter downtrends, do not worry about the bearish flag and pennant. Wait for the pattern to accomplish and trend to proceed. Consider adding to your brief position.
- Ascending and descending triangles
Triangles show up ter both uptrends and downtrends. They signal a continuation of the prior trend and form when the market is tired right before picking up momentum for continuation.
Control your emotions and consider adding to your prior trading position during triangle formations
Ascending triangles are a pause ter an uptrend. Prices coil up and consolidate into a triangle structure just below a resistance level. Conversely, descending triangles are a pause te a downtrend. Once the triangle patterns accomplish, a breakout goes after ter the direction of the prior trend.
You should be patient during triangle formations. Thesis structures take time to consolidate before cracking out. Triangle patterns are a signal to keep holding or add to your prior position.
Five) Elliott Wave Analysis
Elliott Wave theory has proven successful te identifying the bottom of bear markets and forecasted expected tops te bull markets.
Elliott wave divides market moves into two basic trends: impulsive flaps and corrections. At any one time, prices are either trending upwards or downwards with intermittent corrections.
Trends are impulsive flaps and subdivide into Five swings while corrective sways subdivide into Trio sways and budge te the opposite direction. The motive wave is labeled spil 1 – Two – Three – Four – Five, followed by an a – b – c correction. Wave 1, Three and Five are impulsive sways, while Two and Four are corrective flaps.
Pick up any price chart and take a look at the candlestick price lines on any time framework. You will be amazed at how this structure repeats itself on both higher and lower degrees.
How do I profit from Elliott swings?
The most profitable trades are positions held during motive swings. You should hold through impulsive sways 1, Three and Five, and be patient during corrective swings Two and Four.
Corrections often loser fresh traders. Fickle traders usually sell during corrections, mistaking them for a switch te trend. Don’t be one of them.
Elliott wave analysis helps you to identify when a market is trending, when it is te a corrective state and when the trend has switched. Buy at the beginning of the motive wave and rail the trend. Be patient and peaceful and hold during corrective sways. Sell the end of the motive wave when a switch ter trend and direction is confirmed.
With thesis technologies te palm, you are ready to begin analyzing charts and trading for profits! There are more mechanisms ter the cryptocurrency industry, but thesis should get you to a good commence.
Once you combine thesis technologies on a single chart, you can arrive at the best decision on whether to sell, buy or hold. A lotsbestemming of other traders also use thesis technics. So go out, join other traders and exchange ideas.