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I am writing this article to help people understand how to start trading in cryptocurrencies, but this article is not in any way a financial advice to anyone out there. I request you to do your own research before investing, as the Crypto market is a high risk and high return and highly volatile market.
What is cryptocurrency trading ?
Cryptocurrency or “Crypto” trading is a way of either increasing the quantity of a particular Crypto you hold or to increasing the amount of cash you already hold.
For example :
- You have –1 BTC– , To increase the quantity of BTC you will trade against other Crypto like Ethereum. When you close the trade in profit you will see you have more than 1 BTC, it could be any amount depending on the % of profit you booked.
- You have 100$ in USD and you want to increase the cash you have, you opened a trade in Crypto for example BTC, so you bought 100$ worth of BTC and sold it for a 10% PROFIT. So now you have 109$, the 1 dollar went to the exchange as a fee for providing a platform for you to trade successfully.
Sounds pretty 🔥 easy isn’t it, but it’s not that simple guys there are a lot of indicators, trend lines, strategies out there that are really good but fail to predict the exact movement of the price. You have to find the resistance and support and trade with a strategy.
So how can we profit $$ trading cryptocurrencies ??
It’s not that difficult as well to start, keep learning and improving with no loss and good profits. Let me show you how that’s done.
- 1st you need to create a watch list of a few coins, as taking you are a new trader, I will suggest you to go with coins which are in the top 30 on Coinmarketcap, visit the site to see how cool it is. If you want to make a profitable trade, then create a list of 10 coins from the top 30 coins. It’s because those coins will never ditch you if your prediction goes wrong as they are old, profound and respected projects in the market. I am not saying they can’t die, I am just saying that their chance of killing your initial investment is too low.
- 2nd watch all the Crypto charts, look for support and resistance. Support and resistance are formed by joining the wick on the top and bottom of 3 or more candles. For example, look at the graph below. Below is a graph of one day, i.e each candle represents 24 hours. In the section of candles you can see there are two trend lines in blue color moving parallel to each other. The upper line represents the resistance and the below line represents the support.
- 3rd after finding the support and resistance we need an indicator to see the money movement, i.e We need to check whether a coin is overbought or not. For that we are going to use the indicator Called “RSI ” –> It stands for “relative strength index”. If the graph moves above the pink region the coin is overbought, that means it can fall down any time, that’s not a good time to buy the coin. Similarly if the graph is below the pink region then the coin is oversold, that means it will likely go up from here, this is a great time to buy the coin. You can create support and resistance lines in the RSI section as well to be more accurate about the movement of that crypto. That’s it with the RSI.
- The 4th indicator we are going to use is the MAC-D –> which stands for moving averages convergence and divergence. This basically helps in understanding the trend reversal and how powerful it is, but we cannot rely completely on it as it gives too many false signals as well. It consists of three things.
1. Mac-D line -> Which is the blue line, it helps us determine upward or downward momentum (market trend).
2. Signal line –> Which is the red line and it helps in spotting the reversal, or you can say entry and exit points for our trade.
3. Histogram –> It calculates the convergence and divergence of both the lines. In lay man language it helps us understand how big is the difference in between both the line.
4. Zero line ––> This the invisible line between the green(upward) and red(downward) histogram. on which the histograms are made.
If the MAC-D line crosses the Signal line it’s a bullish signal but, we have to see how strong is the reversal, to check that see how big histograms are being created. If the MAC-D line crosses the Zero line and the Signal line then it is a great signal to enter the trade. and as the difference starts to decrease, that is if the histograms start getting smaller, that’s when we need to close the trade.
So how do we open a trade to make profit, Simple from using the above information proving tools. .!!
1st –>> We draw the support and resistance for the graph, then we check the RSI – relative strength index and then we check the MAC-D for getting the valid entry point. and to see how strong the momentum is of that particular reversal.
If our candle is at the support or resistance for the Crypto, then we will check for the RSI line is in the middle of the pink region or below it, if it is below or in between then it is a good signal for opening the trade(buying the coin). But we still have to check the MAC-D. If the MAC-D is showing that the blue line has crossed the red line and is below the zero line then it is a bullish signal with medium strength. And if it crosses the red and zero line and the gap is increasing in an ascending order then it is a bullish upward trend with momentum.
Okay guys that’s it, I hope I was able to make it as simple as possible for you..
I hope all of you make a huge amount of profits, so that you can share some with me in the donations below 🔥🔥✌️✌️😉😉.. will appreciate that.
Ethereum & TOKEN — >> 0x1b5047A8715c7Cf0c8663302CFB512217907C94e
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