NEO is a relatively younger and interesting project. Dubbed the second Ethereum, NEO has unique and valuable features and many are asserting that it can overtake its older counterpart in the future!
This kind of publicity, alongside with many other features, has given it a big boost in popularity which has helped solidify it as one of the biggest cryptocurrencies today.
If you are interested in making money with NEO, then take a seat and keep reading because I’m going to show you how to trade and take advantage of this great opportunity.
NEO is a very profitable market for both long-term and short-term investors and traders thanks to a variety of factors.
First, short-term traders can greatly benefit from its liquidity. Compared to ETH, NEO lets users program in popular languages like Java, which really opens the gates to a wider target. This translates directly into liquidity.
Long-term traders can also gain a lot from NEO thanks to its huge support from the community, in which the government of China takes part. This is a great advantage considering that China’s regulations have been a large factor for plummeting crypto prices in the past.
If that’s not enough, NEO token holders can also benefit from earning GAS, which is the currency of the NEO network.
Let’s start with the NEO coin itself by looking at this chart:
You may quickly notice the good liquidity so far. For a 5-minute chart, most candles have enough substance in them, with nearly half the stuttering in case of other cryptocurrencies.
This is especially good because it allows for pure price action analysis, look again:
Boom! You get a cup and a handle chart pattern, this time not continuing a trend, but reversing one!
From there, it’s fairly easy to continue!
Wait for confirmation; this comes in the shape of a bullish candle breaking the moving resistance at the handle.
Place a trade accordingly; Go long at the next green candle when the blue trendline (handle) was broken.
Set S/L; at the lowest point of the handle; the bottom of the cup is another good point.
When it comes to profit targets, there are two good approaches. First, these patterns often mean a bullish trend, so you may decide to just ride it and see how much you can make from it (for example by moving S/L based on the Parabolic SAR or a moving average). Secondly, you may place a T/P at a point of the first nearest support or resistance level (in the trade above it would be around 16.09). And it´s also possible to use time-based exit rules as well.
This is where things get interesting. If you hold onto your NEO, you are entitled to GAS from mined blocks. Since NEO cannot be divided (and could come as an expensive investment), GAS is much easier to trade.
Here’s a chart of GAS:
There! As liquid as NEO. Actually, GAS can be said to surpass NEO in that sense since most people see NEO as just an entrance to this token.
Now, on the same chart, we have this:
We can see here an inside bar forming after a consolidation breakout.
This can be traded by placing a SELL STOP order below the inside bar’s lowest point (since a strong downtrend is underway). My Stop-Loss was simply above the high of the Inside Bar.
- Since the market started to reverse very quickly, it is appropriate to close this trade manually at 4.95, which would pocket a nice profit from this trade.
Now, you may be saying to yourself - it was possible to trade the breakout of the sideways range - and yes, you are correct! This is how simple Price Action patterns are to trade and how easily they provide high-quality signals and profitable opportunities.
See you here next time with another profitable trading strategy.
Take care and trade well!