Price action trading strategies for cryptocurrencies
The cryptocurrency markets have been on a wild race in recent years, the prices fluctuating wildly between bulls and bears. While some investors consider the cryptography market as a high -risk and high reward game, others are more cautious and prefer to negotiate with established trading strategies. In this article, we will explore three key price trading strategies for cryptocurrencies.
Strategy 1: following trend
The following trend is one of the most popular and effective negotiation strategies in the cryptocurrency markets. This approach consists in identifying the management management of the market and adjusting the positions accordingly.
* Identification of trends : Look for long -term trends that are established by a combination of technical indicators such as mobile averages, RSI and Bollinger bands.
* Adjustment of stop losses
: Once you have identified a trend, define stop losses at a level where your profit objective is the key. In this way, if the opposite price, you will be protected from other losses.
* Adjustment positions : After a trend reversal, adjust the positions to lock profits or limit losses.
Example: Bitcoin (BTC) The recent trend was motivated by the increase in feeling and the increase in institutional investments. As prices increase, traders adjust their positions to lock profits or limit losses.
Strategy 2: Average reversion
Another strategy of popular negotiation strategy which consists in identifying the conditions of surfferation or surveillance in a cryptocurrency market.
* Identification of excessive conditions / occurrences : Look for extreme price movements and identify the areas where the price has reached a record or low level.
* Adjustment of stop losses : Once you have identified an excessive / superventing condition, define the stop losses at a slightly higher / lower level at the current price. In this way, if prices bounce, you will be protected from other losses.
Example: Ethereum (ETH) has experienced significant volatility in recent months, the prices increasing after prolonged slowdown. Merchants adjust their positions to lock profits or limit losses while the market continues to rise up.
Strategy 3: Trading in small groups
Trading in small groups is another popular strategy which consists in identifying the areas where prices come out of the established ranges.
* Identification of escapes : Look for price movements that cross established levels such as mobile averages, support / resistance levels or other key technical indicators.
* Adjustment of stop losses : Once you have identified a break, define the stop losses at a level slightly above / below the escape point. In this way, if the prices reversed management, you will be protected from other losses.
Example: The recent Bitcoin failure (BTC) was motivated by the increase in support levels and the increase in trading volume. Merchants adjust their positions to lock profits or limit losses while the market continues to rise up.
Additional advice
* Use technical indicators
: Use a combination of technical indicators such as mobile averages, RSI, Bollinger and MacD bands to identify trends, inversions and eruptions.
* Focus on trends : Average trend monitoring strategies are more effective than trading in small groups, which can be more volatile.
* Manage the risk : Always adjust the arrest losses and manage the risk by adjusting the positions accordingly.
Conclusion
Price trading strategies for cryptocurrencies offer a range of advantages compared to traditional market analysis. By identifying trends, defining stop losses and adjusting positions, traders can lock profits or limit losses with confidence. Do not forget to always use technical indicators, focus on trends and manage risks to ensure the success of cryptocurrency markets.
Warning : The information provided is for educational purposes only and must not be considered as investment advice.