How Crypto Trading Signals are created
Crypto Trading Signals Group needed? Are you considering going into cryptocurrency investment but lack the relevant skill? Do you know that you do not need to be a professional to start receiving daily profits? If you can buy a crypto asset at the right time, you unlock great potentials and returns. Yes, that is where crypto signals become relevant. Even if you are a professional, it is not enough to get crypto signals always. You must have a plan to begin this journey.
Crypto trading signals aren’t something you receive randomly because they are based on various factors including fundamental analysis, technical analysis, market situations, rumors, and the latest news in the market. As you can see, they involve a lot of effort and time. Since you don’t have the time to put these various factors together and come up with signals, the only option available is to opt for providers of crypto signals.
Importantly, trading cryptocurrencies requires a certain level of experience, which most beginners lack. However, getting these crypto trading signals can serve as a way of wetting your wet pending when you are good at analyzing the market for yourself.
What are Crypto Trading Signals?
Cryptocurrency trading signals are trading suggestions or ideas based on different factors to sell or buy a particular coin under a predetermined price. Professionals generate these signals for both new and unsuccessful traders. Additionally, there are special trading bots and algorithms designed to send these signals to traders automatically.
Usually, these trading signals come with a protective stop loss and take profit for each coin. With these two parameters, you are covered within the trading period even when you don’t have access to your trades. The importance of setting a stop loss is to minimize the loss a trader may get into peradventure the trade goes against him.
Nowadays, various cryptocurrency trading platforms offer traders to copy trade their signals. However, the risk involved tends to be high unless such trader platform has the abilities to trade effectively. Notwithstanding, there are those who offer crypto trading signals at a fee. These subscriptions to these crypto signal providers’ rangers from monthly, quarterly, and annual plans.
The signals are sent to each client in a timely manner to enable them to take advantage of the current market. To make it easier, let us use an example to illustrate this. Assuming a provider sees potential in Bitcoin against the Dollar and decides to forward this signal below.
BUY BTC/USD @ $6,500
Take Profit $7,200
Component of a good cryptocurrency trading Signal
What to do: The first step is the action you have to take – to buy or sell. In cryptocurrency trading, you only have two options, which are the buy and sell option. In our previous example, the action was to buy rather than sell.
Coin to sell: After deciding what action to take, the next step is to determine the cryptocurrency to sell or buy. What this means is that you need a particular coin to sell or buy. In the example above, we triggered a buy action for the crypto pair – BTC/USD. So far, you have learned how to buy (action) the coin (BTC/USD) of our choice.
Price: The third component is the price at which you want to buy a particular coin. The crypto price can be the one above the current market or the current market price. Peradventure, your signal provider sends you a signal that requires you to buy a coin you have to act swiftly. Depending on the cryptocurrency exchange you are using, the market price may move faster than expected.
Stop Loss and Take Profit: Your signal provider will always send signals with its take profit and stop loss. There is always a risk to reward ratio whenever such a signal is sent. If you are getting the signal from a provider, you don’t have to play guess the area to close your trade. However, with a good stop loss, you can minimize your losses while maximizing your profits.
How Crypto Trading Signals are Created
As already mentioned, cryptocurrency signals are created or generated based on various factors. However, in this section, we will focus on two important factors that enable signal providers to generate accurate signals.
Crypto trading signal providers use three major technical analysis components to generate signals. These components include charting lines, patterns, and indicators & oscillators. Technical analysis involves the study of prices, statistical trends, and volume to identify relevant opportunities for each trade. These providers have technical analysts that observe price movement patterns, trading signals along with other important analytical tools to analyze the strength and weaknesses of each cryptocurrency.
These signals are created with various technical tools such as Bollinger bands, simple moving average, moving average convergence divergence, etc.
Fundamental analysis deals with how global economic news event affects the market. The idea behind it is that if a particular country’s economy is strong, then its currency should be strong. Evidently, news event plays a vital role when creating signals. For instance, in September 2017, the bans of initial coin offering (ICO) lead to the collapse of the price of Bitcoin from $5000 to $2900. However, this is just a side of the coin because when companies such as Dell and eBay announced their intention to accept Bitcoin as a means of payment, the price of Bitcoin skyrocketed.
Both technical and fundamental analyses are put into consideration before signals are created. As you can see, the job of a crypto signal provider isn’t as easy as many depict. It involves hours of study and research to generate the best quality signal available to clients. Many signals are created by Robots. In Forex this also exists.
If you think you cannot withstand the reliability and accuracy of crypto signals, then it is best for you to learn the art of trading cryptocurrency. However, taking cryptocurrency trading signals can go a long way in increasing your profit.
Crypto trading signals are created using various fundamental and technical analysis. The choice to decide if it is suitable to subscribe to a signal provider totally lies in you. However, it is hard to find a reliable cryptocurrency trading signal with a success rate of 90%. Notwithstanding, you can take advantage of those available while you harness your crypto trading skills.