Support and resistance trading is one of the most basic, yet highly effective trading strategies that can be used across all trading instruments.
Also, it doesn't matter if you trade Bitcoin, Ethereum or any other Crypto or even any other market. The same support and resistance techniques work on all markets and bring the same profitable results as well.
There are many ways you can trade cryptocurrencies - either Bitcoin or any other altcoin - depending on what you base your predictions on. From fundamentally studying the asset, reading news and press releases that may modify the price, to evaluating how its price fluctuates, traders have myriads of opportunities when it comes to how they want to evaluate the market.
And, when it comes to technical analysis, price action is the main protagonist of any profitable trader's studies.
What Is Price Action?
Price action is the movement in the price of an asset. Whenever you look at a chart, you are indeed staring at price action.
That is because every candlestick shown on the chart is the representation of price action.
Why Should Traders Take Price Action Into Consideration?
Well, that's an easy question to answer.
Price action can tell an experienced trader what to do next. It lets you know how strong a trend is doing, where important support and resistance zones are or if there are any important bullish or bearish Price Action Patterns. If the movements increase in size, then the trend has momentum; in the opposite case, it's losing its power and might get to a sideways trend and to a low volatility period.
Let's look at a D1 BTC/USD chart for a moment:
Trading breakouts is a very popular strategy among traders in many markets, not just with cryptocurrencies. However, when it comes to cryptos, trading breakouts can be somewhat intimidating after the first impression.
But, you don’t need to worry about that! In this article, I’ll share my secrets with you regarding how to spot breakouts and how to take advantage of them.
What’s A Breakout?
Many people say that long-term trading is way too risky. They may point out that you are putting in too much capital in very few assets or trades (even one, perhaps), while others say that you aren’t making any money in the meantime.
A lot of traders then come out saying that short-term trading is too frantic, that you need to be glued to your screen so you can make a small quantity that could be eaten away by your spreads anyway!
To appease those who’d rather stay in the middle, I’m presenting you here with a few tips for the daily BTC chart!
1. Why Should I Use The Daily (D1) Chart?
If you look at this graph...
Probability is nothing more than the likelihood for an event to happen. We use probability to know how close to being certain we can be regarding an outcome.
When it comes to trading, high probability trading is a way to call the act of opening and closing positions where the chance of profit is very high.
Even though you can never be 100% sure that something is going to happen when it comes to trading, there are methods you can use to ensure that your trades have the higher chance of being profitable.
1. Measuring Momentum Through Price Action
Knowing when a trend is dying out or bursting is very important when it comes to placing a trade. The momentum of the trend is your first signal regarding which position you should open.
Trend Following trading systems provide some of the best and most profitable trading opportunities in Cryptocurrencies and Bitcoin.
As the name suggests, in this strategy I trade in the main direction of the market - so I simply go in the direction of the price moves. This is always an advantage as I don't care about the real value of Bitcoin or other Cryptocurrencies, but I simply trade in the direction of price.
Thanks to this strategy, most of the time I am on the right side of the market
1. Expectations Vs Reality
The blockchain technology is not a self-sustaining technology but the services it offers might last for hundreds of years. In the end, it is a technology and is destined to fail until we as a society trace the malfunctions and possible errors and try to rectify them. More importantly, we shall be able to generate and capture the value it has to offer.
The above statements predict the emotions and expectations of the investors tied to this system, no doubt blockchain and bitcoin offer the most secure transaction channels and you can't feel more comfortable elsewhere. Yet our humid practices of just extracting the revenue out of the system instead to make it more stable will leave the bitcoin in peril even if somehow it revives in 2019.
There are many ways you can take on the crypto market; you may take long positions with hopes of raising hundreds in weeks or months, or you may take the day trading path.
So, now we’re taking an approach to day trading using the 5-minute charts.
In this article, I'm going to show you a way how to make your trades safer without having to rely on any indicator - but you will just need to look at the charts!
There are people who simply weren’t born for long-term trading. There are many traders who rather take smaller trades with the advantage of frequency, thanks to benefits like smaller losses, no overnight fees, and let’s face it, more fun.
So, if you’re looking for ways to make your day trading more successful, then don’t be afraid. We will show you some ways you can enter trades with this timeframe and provide you with examples on how to carry them out.
Day trading is a style of trading and not a specific strategy in itself. Day traders prefer the ability to open a larger number of smaller trades instead of opening one trade and holding it for a longer-term.
1. Best Indicators For Trading the 15m Timeframe
The best indicators for this 15-minute chart strategy are the EMA, MACD, and Parabolic SAR.
The EMA lets you spot trends easier, and you can get good information if you use for example a combination of two different moving averages. The MACD offers a similar function, but it’s better for confirming trend strength. On the other hand, the Parabolic SAR lets you gauge short-term momentum and provides good stop signals when coupled with the rest.
Why do I like the 6 Hour chart? Not many use it. Most traders use standard time charts, so using less common parameters for your trading can place you ahead of the pack thanks to how to using unique information to make trades.
Note: Using custom time frames is something that you might not be able to do on your current broker, so make sure that’s available if you want to use it. If your broker doesn’t support this feature, then you may want to start looking for another one for the long term.
1. Trading The 6 Hour BTC Chart Without Indicators
As I’ve stated previously, price action is a very powerful and versatile indicator in its own right.
That’s because all other tools are really just ways to simplify the information provided by price action and are derived from price action. Hence, elite traders rarely use indicators and they can obtain all the information they need just by looking at the candlesticks alone!
So, let’s see how I traded this 6H chart just by using price action:
Double tops and double bottoms are some of the most popular chart patterns for traders. Therefore, they tend to be those you learn first when it comes to trading chart patterns when trading cryptocurrencies.
Due to how commonplace they are - and how profitable it can be to know them - I’ve prepared this guide so you can know exactly how to proceed when you encounter one!
So, read on and learn how to trade double tops and double bottoms!
What’s a Double Top?
While I’m not much of a long-term trader myself, I can certainly recognize the attraction towards this approach.
Many traders are attracted to this approach thanks to the instant nature of it all and how it eliminates the long waiting times of long-term investing.
Since it’s still quite a hectic way of investment, I’m here to give you my guidelines on how to do it seamlessly.
We as humans feel comfortable with patterns, which are homologous with habits, and from that, we can see and start patterns anywhere we go without even noticing a lot of the times we do!
Thankfully, that also is true for and can be applied to trading. These patterns, once identified, can give you significant clues regarding where the price will head, usually with high accuracy.
Here, we’ll delve into the most important and popular chart patterns and how to trade them on cryptocurrency charts.
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