Cryptocurrency trading is currently one of the most lucrative professions that exist, especially knowing that you can invest in altcoins that today are worth pennies on the dollar and in a matter of weeks their price can increase or decrease drastically and people can take advantage of these fluctuations. However, it is necessary to know the market patterns in order to identify trends and make a profit every time the price of a crypto asset takes a long haul.
In this opportunity, we will talk about 4 strategies to trade cryptocurrencies that will make a difference in how you analyze the market. Remember that trading is not only about following patterns, but about having the correct psychology and strictly following a strategy that is true to your goals.
Disclaimer: this post should not be considered investment advice. This is only for educational purposes only. Never invest more than what you are able to lose and always ask for information to your professional financial advisors. We are not financial advisors.
Breakouts are a very popular strategy in which the trader takes advantage of the breakdown of support / resistance levels to position orders in favor of the path that the price takes, regardless of whether it is up or down. Among the 4 strategies to trade cryptocurrencies, it could be said that this is the most used.
Considering that after each break there is a pullback, our duty as traders is to enter after there is a bullish or bearish confirmation depending on our order, If the price of a cryptocurrency breaks a resistance level, goes back and then rises again, it means which is the perfect time to enter this trade.
One of the 4 strategies for trading cryptocurrencies is the moving average crossover. For this tactic we must activate the moving averages of 6, 18, 50 and 200 periods. Once the 6 EMA crosses the 18 EMA with the 200 EMA below, this indicates the start of an uptrend, while the 6 EMA crosses the 18 EMA with the 200 EMA above, It indicates the start of a downtrend.
Each price movement in the cryptocurrency market (and in any other market) will always be accompanied by a pullback. Pullbacks are setbacks experienced by the price that serve to bring the price to a range or to confirm the march towards a trend. In this case, supports and resistances are classic examples to explain pullbacks.
For example, if a trader wants to take advantage of a pullback, he must wait for the price to break a support / resistance level and place an order in the opposite direction to where the price has been heading. Trading pullbacks is convenient if we consider that they happen all the time and are trading opportunities.
Surfing the bull Flag is a strategy that can be applied to any pair of cryptocurrencies. The objective is to find the flag pattern that surfs the 6EMA or 18EMA, in a strong trend,
bullish or bearish respectively. It is recommended to place the Buy Stop just above the top of the corrective candle (+ spread) and the Stop Loss at the bottom that is closest to the 6EMA OR 18EMA. Repeat this process until the purchase order is activated with a new high in price.
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