Price Action Trading Strategies For Cryptocurrencies
Strategies for trading prices for cryptocurrencies
The cryptocurrency markets have been in a wild walk in recent years, the prices fluctuating wildly between bulls and bears. While some investors consider the encryption market as a high risk game, with a high reward, others are more cautious and prefer to trading with consecrated trading strategies. In this article, we will explore three key strategies for trading prices for cryptocurrency.
Strategy 1: Following the trend
Following the trend is one of the most popular and effective trading strategies on cryptocurrency markets. This approach involves identifying the direction of the market impulse and adjusting the positions accordingly.
* Identification tendencies : Look for long-term trends that are established by a combination of technical indicators, such as moving environments, RSI and Bollinger bands.
* Setting the stop losses : After identifying a trend, set the stop losses to a level where your profit target is the key. This way, if the price reverses the direction, you will be protected from other losses.
* Adjusting positions : After a trend reversal, adjust the positions to block profits or limit losses.
Example: Bitcoin (BTC) The recent UPTREND was determined by the increase of feelings and increasing institutional investments. As the prices increase, traders adjust their positions to block profits or limit losses.
Strategy 2: Average Reversion
Average reversion is another popular trading strategy that involves identifying over -stated conditions or surveillance on a cryptocurrency market.
* Identifying overlapping/surveillance conditions : Look for extreme price movements and identify areas where the price has reached a constant or low level.
* Setting the stop losses : After identifying an overloaded/overcoming condition, set the stop losses to a level that is easily above/below the current price. This way, if the prices come back, you will be protected from additional losses.
Example: Ethereum (ETH) has undergone significant volatility in recent months, increasing prices after prolonged decrease. Traders adjust their positions to block profits or limit losses, as the market continues to tend up.
Strategy 3: Breakout transaction
The trading of sale is another popular strategy that involves identifying the areas in which the prices are detached from the consecrated intervals.
* Identification of interruptions : Look for price movements to be separated from set levels, such as moving environments, support/resistance levels or other key technical indicators.
* Setting the stop losses : After identifying a breakup, set the stop losses to a slight level above/below the breaking point. This way, if the prices reversed the direction, you will be protected from additional losses.
Example: Recent breakdown Bitcoin (BTC) was determined by the increase in support level and increasing the trading volume. Traders adjust their positions to block profits or limit losses, as the market continues to tend up.
additional tips
* Use Technical Indicators : Use a combination of technical indicators, such as moving media, RSI, Bollinger bands and MACD to identify trends, reversals and burglaries.
* Focus on trends : Tracking trends and average reversal strategies are more effective than interrupting trading, which can be more volatile.
* Manage the risk
: Always set the stop losses and manage the risk by adjusting the positions accordingly.
Conclusion
The strategies for trading price actions for cryptocurrencies offer a number of advantages over the traditional market analysis. By identifying trends, setting stop losses and regulating positions, traders can block profits or limit losses with confidence. Do not forget to always use technical indicators, focus on trends and manage the risk to ensure success in cryptocurrency markets.
Disclaimer : The information provided is only for educational purposes and should not be considered investment counseling.