Dash Trading Strategy: How To Trade Altcoins For Diversification


It is unwise to put - as they say - all your eggs in one basket, so trading different instruments is always a good idea for risk management.

It also stays true when trading cryptocurrencies; you can’t just keep trading Bitcoin or Ether forever if you want to make the most out of cryptocurrencies.

With that philosophy in mind, I’ll present you an opportunity to do just that by adding Dash to your crypto trading portfolio.

What Makes Dash Unique?

Dash is one of the most popular private cryptocurrencies. The coin is also seen lately as one of the most stable cryptocurrencies, so long-term investors can see a good opportunity to take a position, but shorter-termed traders need to polish their indicators and pattern spotting skills.

This stability is due to a wider-spread adoption by many members of the crypto community, thanks to how private and practical Dash is.

How To Trade Dash

As we said, stability tends to mean a lot of sideways trends, and this means we need to use good indicators and Price Action techniques to identify the brief swings as soon as they start.

For example, take a look at this chart:

Before we go into specific trade examples on that 4-hour graph, let me point out a few things.

First, you can notice that a combination of an EMA and an SMA is plotted on the above chart. This is because both indicators let us analyze market trends, but since the EMA takes more recent moves into account, it makes an excellent tool for spotting when trends start reversing.

As you can see, in four different instances, the EMA broke my SMA, and all four ended up being reversals. They work as a “simpler” MACD.

Lastly, the Parabolic SAR is a great companion to these due to how it helps to confirm the signals provided by them. Also for more advanced and professional trading, it's always great to use trendlines, supports and resistances and Price Action patterns, but to keep things simple, we'll stick to using moving averages and Parabolic SAR for the purposes of these examples.

Now, let’s get into the trade examples which are actual positions that I took:

Breaking down the trades:

  1. I spot a crossover right at the first bearish candle, so I decide to go short when I see a second candle forming in the same direction with both MAs following the same way (my entry price was at 204). This ends up being a very long trade (note that it’s a 4-hour chart), and I exit when I spot another convergence, placing my S/L at the last bearish candle’s max, exiting at 184.7043 with around 20 points in profit!
  2. Then, the next position is a BUY order I place to quickly capitalize on that convergence that finished my previous trade (blue arrow). Since I’m just looking for a quick profit, I simply place my T/P at the second next round number (190) and pocket that modest income! Here it was only a fast scalping trade and I had this trade confirmed from lower time-frames that there was a strong buying pressure.
  3. On the last position (red arrow), I spot a crossover that confirms a previous forming trend, so I go long at 188.0000. I ride the small trend for a while until I see that first red bearish candle formed. As it closed, I moved my S/L below the low of that red candle to lock my profit in case that the market would continue further down. The trade was opened for one more candle, the market started rising again a bit, but then a big bearish candle followed and it closed my trade, still a handsome profit.

These were some specific examples of how we can trade Dash.

As you probably know, I prefer to trade with strategies and techniques that are universal and can be usually traded (with some minor modification) on all instruments - these techniques that prove to bring profitable results for a long time and on a lot of instruments are usually my gold mines!