The winning above trading strategy can be adopted in the exchange of cryptocurrencies. It works so much to say one with both Ethereum and Bitcoin, respectively, silver and gold medals in terms of popularity.
Overlap of the graphs and analysis of the indicators
The first rule for a winning bitcoin trading strategy can only start from the analysis of the charts. After analyzing the graphs, it is advisable to know the main trading indicators, the usefulness of which will be very evident when you have to invest in cryptocurrency trading. After analyzing the graphs, it is essential to support the analysis of the OBV (On-Balance Volume) indicator.
This is an indicator widely used in the field of day trading, where the opening and closing of investment sessions take place on the same day. The OBV indicator considers the total flow of money related to a given asset. However, what you need to take into account is not only the volume of trades but, above all, the price trend of the period you take into consideration.
Examine the price differences between Bitcoin and Ethereum
The utility of simultaneously analyzing Bitcoin and Ethereum charts are handy, to identify the real price differences between the two most renowned cryptocurrencies. It is not only about price differences, but also about ” smart money divergence. ” Not surprisingly, the two currencies have different market values. At btradesignalpro.software one can get detail information of bitcoin transaction.
It follows, therefore, that the primary purpose of the analysis above revolves around the identification of those time frames in which the cryptocurrency records an increase or a decrease in value, while the other presents different values. Proactively reading weak signals in the virtual currency market determines your trader’s success.
Monitoring of the OBV indicator before giving rise to a sale
The analysis of the graphs aims to identify what is known as “smart money divergence.” Afterward, it becomes useful to understand if, based on the elements collected, it makes sense to invest or not.
If Ethereum recorded an increase in its value, which led it above the key resistance until the breakout was reached when the Bitcoin value ended the session in negative, the smart money strategy divergence indicates that in the short term, the breakout will also be achieved by
Bitcoin.
An indication of considerable importance is provided by the OBV, which, as a technical indicator, takes into account price changes and trading volumes. After assessing whether the performance of the indicator is identical to that of the trend of the cryptocurrency, the subsequent analysis will compare the OBV level and that of the indicator at the time when the cryptocurrency had reached the breakout.
Setting a purchase limit threshold at the resistance level
On the best bitcoin trading strategy, taking into consideration the fourth rule that you must abide by always set a purchase limit, to be placed near the resistance value. With the deal in question, all you do is anticipate the breakout. The stop loss proves to be an indispensable tool when it comes to stem losses and to establish well in advance the value of the asset, which must block purchase or sale.
The operation is automatically blocked, to manage the investments better, to safeguard the available budget against sudden changes in assets that frequently occur with Ethereum and with Bitcoin, and finally to improve performance with Bitcoin Pro.
Correct positioning of the stop loss
Making the best use of the stop loss is fundamental for the simple reason that its positioning will result in the outcome of trading with Bitcoin. Insiders are of the idea that the stop loss should be positioned just below the market entry price.
Also, if all these strategies seem difficult to you, it is recommended that you open a demo account on one of the following brokers. They offer free assistance, and they can teach you how to use the trading signals, they are available to explain the best methods to invest and all the tricks of the trade.
Remember to:
- Follow the news on Bitcoin and the markets: paying attention to the news on cryptocurrencies, allows you to keep up with the market changes. Setting up alerts and notifications is very useful
- Use technical indicators like OBV: utility comes out when it comes to justifying each of your operations. Other useful indicators are the MACD, Stochastic oscillator, and the VWAP.
In conclusion, several tricks allow you to minimize the risks when it comes to trading strategies on bitcoin. The best thing is to study.
