Monero is yet another private cryptocurrency among the spectrum of those we’ve already discussed here so far.
Like the others we’ve seen, Monero is a very famous cryptocurrency between the group, and this ensures a good amount of liquidity for traders.
Thanks to that, Monero can be a very profitable cryptocurrency to trade, including for scalping strategies!
And to top it off, no one will know who’s trading it!
Why Should You Trade Monero?
Privacy aside, there is another very important feature regarding this crypto coin, and it’s one that makes it a worthwhile investment.
Its developers took a special focus on stopping ASIC mining. Why is this important? Well, without ASIC miners, more people can process transactions and this leads to more circulating capital, AKA liquid money!
How to Trade Monero
Thanks to its noticeable liquidity, Monero can be traded on many timeframes, including the shortest like 1-minute and 5-minute charts! This is important because it’s something not many cryptocurrencies offer.
Here we have a 5-minute Monero chart, one of my favorites for trading this digital coin:
Looks good, doesn’t it?
But what are you looking at, specifically? Because, sure, the graph looks very organized, and the uptrend surely looks nice for swing traders or longer-term investors who would be glad to see that the currency is doing good, even if it’s for just a couple of Dollars.
However, there’s something to be seen:
If you’ve been paying attention to our previous articles, you will be easily able to spot this pennant.
To help you remember, pennants are brief breaks that usually continue the previous trend after a small reversal. This indicates a prime position for trading in the direction of the trend!
Let’s break down the trade example that is shown on the chart above:
We can spot that the second green candle after the reversal successfully breaks the resistance set by the pennant (or more precisely the trend line - the upper side of the pennant).
Hence a BUY order can be placed when this trend continuation occurs.
Following standard customs, the S/L should be placed below the lowest price in the pennant. Placing it even a little higher would be acceptable as well, but placing it slightly lower to give it more breathing room, just in case, can often help to avoid being prematurely stopped out. However, as you can see from the chart, after the entry point, the market hasn´t gone against the trade a single point.
Again, as standard, we should continue to watch and follow how the Price Action is developing. Then when the Pin Bar at the top of the bullish swing formes, the trade should be closed (which happened around 20 minutes later) - giving a very nice and quick profit!
Here’s another trade using a MACD so you can see how easy it is to spot when trends start (both with Price Action / chart patterns and with indicators as well), this time on an hourly chart:
We can see that the MACD shows a strong turn at the first blue arrow and it’s looking to converge. At this point, a SELL order can be placed on the next candle when we see that a strong bearish candle forms in addition to the crossover.
The S/L can be placed above the previous candle’s high (it was also its opening price).
Most traders would place a T/P order based on some fixed RRR (Risk Reward Ratio) - for example twice or thrice more than the value of Stop-Loss. But setting T/P orders in this way is rarely appropriate because it doesn´t reflect the current market situation. As you can see from the chart, the bearish momentum was building up and we were nicely riding this downtrend and gaining increasing profits.
Sure enough, after almost a full day, the MACD is starting to converge (again as in the previous trade example earlier in this article), so it is right to exit the trade when the crossover on the second blue arrow occurs. The trade was closed on the opening of the next bullish candle.
Monero is one of my favorite cryptocurrencies for trading, so it´s definitely a good idea to include this crypto coin into your trading portfolio.
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