Cryptocurrency is the digital currency that runs through blockchain technology. As a result, it can ensure secure online payments without any engagement of any third party or intermediaries. “Crypto” alludes to the different codes and algorithms and a cryptographic system that protects these entries.
However, trading in the cryptocurrency market is often frightening for novice and master traders due to the vast amount of expert and technical language and procedures jumbled together. If you are keen to generate crypto trading signals, the following methods would be an effective way to earn higher profits from crypto trading.
What is crypto trading?
Unlike the conventional exchange, the cryptocurrency market continues to trade 24/7. It comprises buying and selling of digital assets against profit. Similarly, as in the traditional currency market, crypto has its digital currency exchange. Those cryptocurrency exchanges offer traders to be involved in digital coin trading.
In starting trading the cryptocurrency, traders need to select a wallet and an exchange. There are numerous wallets available, and you may buy these assets from there to start your cryptocurrency trading journey. Roundabout 1,500 cryptocurrencies are accessible. Still, the novice should begin trading with market-leading cryptocurrencies to reduce losses because of the current extreme volatility of the crypto market.
How to trade using short-term price movements in trading strategy?
Short-term traders mainly utilize the short-term price momentum strategy. The strategy includes a process for the traders to actively and closely monitor the crypto market. It also helps traders have better knowledge and determine how they can make the trades. It takes plenty of dedication and commitment of the traders to observe the market trends.
Although the cryptocurrency market is open 24/7, still trading here has several risk factors, and the profit is uncertain. Despite that, crypto trading is a substantial manner of making money by working online. It makes you gain around 5% to 10% profits on your investment as it invests in the asset’s volatility. However, along with this strategy, traders endeavor to gain small profits and add them to become a larger amount.
Additionally, the method of investing in financial assets provides updates to traders on what is going on in the market. It helps traders to place multiple orders in a single day as well.
A short-term trading strategy
It has developed based on the market trend. We will add the Stochastic oscillator indicator for the trade signal in this trading strategy. Besides, we will add the 50 period EMA to understand the market trend. Moreover, you can apply this strategy to the M5 and the M15 time frames.
Bullish trade scenario
First, you have to add the Stoch to the chart. Along with this, add the 50 period exponential moving average indicator.
- 50 EMA will help us identify the market’s uptrend in the lower time frame.
Entry
Open a buy trade when the price pullbacks to the 50 EMA and have a bullish candle close. Besides, the Stochastic oscillator had a bullish crossover below the oversold level 20.
Stop-loss
Place the stop loss order below the 50 EMA with at least a 5-10 pips buffer.
Take profit
Set the take profit order at the upcoming resistance level. Or else, you can take the profit by calculating at least a 1:3 risk/reward ratio.
Bearish trade scenario
First, you have to add the Stochastic oscillator indicator to the chart. Along with this, add the 50 period exponential moving average indicator.
- 50 EMA will help us to identify the downtrend of the market on the lower time frame.
Entry
Open a sell trade when the price pulls back to the 50 EMA and have a bearish candle close. Besides, the Stochastic Oscillator had a bearish crossover above the overbought level 80.
Stop-loss
Place the stop loss order above the 50 EMA with at least a 5-10 pips buffer.
Take profit
Set the take profit order at the upcoming support level. Or else, you can take the profit by calculating at least a 1:3 risk/reward ratio.
A long-term trading strategy
The long-term crypto signal trading strategy has developed based on the price range breakout. We will add the Ichimoku cloud indicator in this trading strategy to understand the market momentum. Moreover, you can apply this strategy to the H1 and the H4 time frames.
Bullish trade scenario
First, you have to add the Ichimoku cloud indicator on the chart. Then draw a range of the market and wait for the range to break upward with an impulsive bullish candle.
- Ichimoku cloud adds more confluence by residing below the price.
- Senkou span B also broke the range and climbed over the price.
- Kijun line and the Tenkan line are holding the price as support.
Entry
If above mentioned all the trading conditions are met; then you can open a buy trade.
Stop-loss
Put the stop loss order below the Ichimoku cloud with at least a 10-15 pips buffer.
Take profit
Take the profit by calculating at least a 1:3 risk/reward ratio. Otherwise, you can take the profit when the Senkou span B breaks below the price.
Bearish trade scenario
First, you have to add the Ichimoku cloud indicator on the chart. Then draw a range of the market and wait for the range to break downside with an impulsive bearish candle.
- Ichimoku cloud adds more confluence by residing above the price.
- Senkou span B also broke the range and nose-dived below the price.
- Kijun line and the Tenkan line are holding the price as resistance.
Entry
If above mentioned all the trading conditions are met; then you can open a sell trade.
Stop-loss
Put the stop loss order above the Ichimoku cloud with at least a 10-15 pips buffer.
Take profit
Take the profit by calculating at least a 1:3 risk/reward ratio. Otherwise, you can take the profit when the Senkou span B breaks over the price.
Pros & cons
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Final thoughts
Finally, trading cryptocurrency involves all the potential obstacles to mass adoption. Hence, it makes sense that even the master traders make err instead of getting on the safe side. Although It is known that cryptocurrencies and blockchain technology are not going anywhere since they provide so many advantages. Such as flexibility, transparency, and decentralization are the main among those. And those are the advantages that consumers strive for in a currency nowadays.
