May 31, · The swing failure pattern (SFP) is a very common pattern in Bitcoin and cryptocurrency markets, and one that gives a very high reward/risk ratio trade. It is caused by big traders looking for large liquidity to fill their orders by hunting stop-losses and baiting breakout traders. Technical analysis gauges display real-time ratings for the selected timeframes. The summary for Bitcoin / U.S. dollar is based on the most popular technical indicators — Moving Averages, Oscillators and Pivots. Results are available at a quick glance. 1 minute. Dec 17, · Bitcoin is currently trading near $23,, having hit a new lifetime high of $23,77 during the European trading hours. Read more about Bitcoin Technical Analysis Fibonacci.
Bitcoin technical tradingTechnical Analysis of Bitcoin / U.S. Dollar (BITSTAMP:BTCUSD) — TradingView
Further, every number gets closer to the Meanwhile, working the sequence in the reverse order gives extension levels. The challenge lies in picking the most relevant price points while drawing Fibonacci extension and retracement levels. Fibonacci tools served the purpose in when bitcoin traded in uncharted territory for 10 months.
Many analysts are expecting bitcoin to chart a like meteoric rally in However, Noble believes it could play out in the coins associated with decentralized finance DeFi. When asked about the level to watch for during potential pullbacks, Noble said the Newbies and amateur traders often misread the above or overbought reading on the day RSI as a sign of bearish reversal.
In reality, the indicator can and does stay overbought longer than sellers can stay solvent, to paraphrase economist John Maynard Keynes. A similar pattern was observed on the daily and weekly charts during the bull run.
It goes up, it sits and goes up again. In fact, it can be counterproductive as it could cause the trader to second guess their decision. Consequently, the market cap tells you a lot about a particular asset. You can examine the market cap to gain a deeper insight into the stability of an asset. Websites such as CoinMarketCap.
You can use these charts to spot trends in the market. In the case of Bitcoin, you will notice that over the last 9 years the asset has gained considerable value.
Candlestick charts are the most popular style of chart used in the crypto space today. At first, these charts can seem as strange as the controls of an alien spacecraft to the untrained eye.
However, it only takes a few minutes to understand these remarkable trading tools. Candlestick Chart — Binance Trading Window. Candlestick charts provide you with a plethora of information at just a glance. You will notice the red and green candlesticks are laid in succession. Importantly, each candle shows you the price movement of an asset over the selected timeframe. Candlestick charts provide you with everything you need to know to understand the current state of the market value of an asset.
You can see the opening and closing prices, the daily high and low, and you can decide on what time intervals you what this information displayed. A green candlestick indicates that Bitcoin closed higher for the time period than its opening value.
Anytime you see a red candle, it indicates there were some losses incurred by the asset. Where the main body of the candle begins is the opening price for the day. If the candle is green, the opening price will be the bottom of the candle body. You will notice that the top or bottom always lines up with the proceeding candle in the chart.
This alignment represents the close and opening of the next trading day. This time can varies depedning on the trading interval you choose. There are also small lines sticking out from the top and bottom of the candle.
These lines are known as shadows. Shadows represent the high and low for the day. In this way, you can ascertain an incredible amount of information from a candlestick chart in seconds. This data can then help you to make a timely investment decision. Certain candles can indicate the start of trends. Consequently, an entire terminology has emerged surrounding these indicators.
Here are the most common candlestick indicators you will see when trading Bitcoin. A hammer candle can indicate a bullish reversal is about to occur. The candle shows that when the market opened, sellers forced the price to drop steeply. This downward pressure was met with stronger buying pressure.
This pressure resulted in a shift in momentum. Importantly, the momentum was pushed back down a slight bit, but not before the day closed. Hammers are easy to spot because they contain a shadow that is sometimes 3x as long as the body of the candle.
Hammers let you know that buyers are in the market and they are controlling the price action for the day. The falling star candle is the opposite of the hammer candle. When you see these candles it means that the buyers had control of the market when the day opened but before the close, their gains were erased by strong bearish pressure.
In turn, you can predict that more selling pressure is entering the market. Falling stars have very small lower shadows with the upper shadow accounting for the majority of the candle.
A bullish engulfing pattern again signifies that buying pressure is strong in the market. In this 2-candle pattern, you see that the sellers forced the price down the day prior. The following day, sellers regained control and dwarfed the losses the bears introduced the day prior.
This pattern shows a bearish candle followed by a larger bullish candle. Reversely, the bearish engulfing pattern lets you know that sellers are entering the market in droves. The first candle in this pattern will show gains from the day prior.
The next candle in this pattern will reverse the gains and show even stronger losses. A morning star pattern utilizes three candles to determine market trends. A morning star is a bullish reversal pattern that shows a struggle ensuing between buyers and sellers. On day one, you see that sellers had full control over the market. This sales pressure was countered on day two and reversed on day three.
The evening star pattern is the opposite of a morning star. Here you see that buyers get exhausted after two days of pressure. On day one, the buyers were able to control the price.
On day two there advancements were met with equal pressure and by day three, they lost control of the market.
You can easily spot star trends because they have no body because the pressure on both sides of the market was equal. The morning star candle indicates that sellers are now in the backseat and bulls are in control. Evening Stars show that bears run the market currently.
The formula reads as:. By comparing the current and past market fluctuations, as well as the magnitude of recent gains to recent losses, the RSI attempts to establish if an asset is overbought or undervalued. An overbought asset will usually depreciate in the near future. An undervalued asset will go up in price as its intrinsic value is realized.
This means that you must use this tool in conjunction with other indicators to improve your results. RSI indicators are prone to false buy and false sell signals. When using this strategy, the focus is on identifying breakouts around familiar price ranges and chart patterns such as:. When a breakout occurs, it is often followed by a substantial buying or selling momentum in the direction of the breakout with traders attempting to catch the momentum to profit from it.
This day trading strategy is based on the trade of the underlying trend of Bitcoin. This used to be a profitable approach when the cryptocurrency market knew only an upward direction but with ranging cryptocurrencies, a breakout approach would be better. Although, should a new trend in Bitcoin be established and it is characterized by higher highs and higher lows in uptrends, or lower lows and lower highs in downtrends, this trading strategy may yet again become more viable.
This strategy refers to catching price corrections which may go against an established trend. This strategy is not recommended for beginners as it involves a substantial amount of risk associated with the level of volatility in the cryptocurrency market. The name of the strategy is self-explanatory.
Automated trading involves making use of AI technology such as trading robots, or Expert Advisors, to trade on behalf of the trader. There are numerous trading bots available with different parameters programmed which can be downloaded or purchased.
A lot of Forex brokers and crypto exchanges also provide such robots to traders. The trading bots are programmed according to different strategies and when choosing a bot, it depends on the traders trading needs, objectives, and parameters in deciding which one to use when trading.
This strategy is, however, notoriously risky as the cryptocurrency market is volatile and in using this strategy, it may lead to substantial losses. This strategy is rarely recommended, and it requires a strict risk management plan.
In Hedging Bitcoin, traders open strategic trades to decrease or eliminate the risk of existing positions. Traders hedge an existing holding by opening a position to short their current position. This involves the selling of the asset on the current market price in the expectation that it will decline.
Should the market price fall, traders will then buy their asset back for the lower price and coin profits from the difference. This means that, when using this strategy, traders will be trading on times when massive news breaks. This includes instances where the news reports events such as natural disasters, terrorist attacks, and others which cause assets to fall.
However, this is a risky strategy as there is a likelihood that prices on these assets may fall even lower. This strategy entails that a trader enters a position as the price dives should the expectation be that the current trend will endure. This also involves a lot of discipline in trading psychology as it may trigger the overwhelming urge to close the position should the price continue declining in a downward trend.
Trading, and Bitcoin trading, deserves a lot of consideration and tactic with the goal on making profits and minimizing any losses. Therefore, it is imperative for traders to ensure that they start with a basic understanding of Bitcoin trading first before trading. There are numerous strategies that can be employed when trading Bitcoin and traders are urged to ensure that they thoroughly research and learn their strategy before moving to another. The general rule concerning strategies is that it is better to have one good strategy that works instead of having numerous strategies that increase the chance of losses while they do not make profit at all.
In addition, traders need to realize that there is no holy grail of strategies where trading, Bitcoin included, is concerned and one trading strategy that works for a trader will not work the same for another trader as each has their own trading styles, needs, and objectives. When trading in Bitcoin it is imperative to secure your investments.
Bitcoins are only as secure as the wallet storing them. Best Forex Copy trading Platforms and Brokers according to research in South Africa, Copy trading, also known as social trading, mirror trading, or auto trading […]. View Share. Sign up and we'll let you know when a new broker review is out.
All data is delayed by at least 15 minutes. Tel: Read Review. Download our free e-book. Skip to content Search. What is Ripple? What is Litecoin? Is Luno Safe? Best Brokers. Forex No Deposit Bonus. Open a Bitcoin Wallet. Broker of the Month. Bitcoin Overview When trading Bitcoin, it is the simple process involved with buying low and selling high.
Fundamental Analysis Fundamental analysis involves the evaluation of mainly both economic and financial variables along with several others. There are numerous variables that influence the demand of Bitcoin including: User adoption Transaction activity, and Trading User adoption is important as it is crucial to the long-term viability of cryptocurrency, and the driving force behind user adoption is the fact that money has various uses.
Technical Analysis Technical Analysis in Bitcoin trading requires traders to read charts and it is an essential skill in trading Bitcoin successfully. Ways to Trade Bitcoin There are numerous ways in which Bitcoin can be traded with two of the most predominant ways being the trading of Bitcoin and other cryptocurrencies on Forex and thus through a Forex broker , or by trading through a cryptocurrency exchange platform.
It is one of the best trading platforms which provides traders with an array of tools such as: Advanced charting tools A wide range of timeframes to choose from Different order types, and more.
How to choose the right broker through which to trade Bitcoin Numerous Forex brokers have started making provision for the trading of Bitcoin by offering cryptocurrencies as a financial instrument in their portfolios of assets offered. But before traders can start with selecting a broker, there are some key points that need to be considered in choosing the right broker namely: Traders need to know their needs whether it is educational sources, as a beginner, trading tools, research sources and tools, and more.
It is also imperative to understand what trading goals and objectives the trader has. Narrowing down the field — as soon as the trader knows what they need, they can look at brokers to identify which ones will more sufficiently meet those needs. Both these ways in which Bitcoin can be traded have distinct differences such as: Bitcoin currency pairs are traded in the same way as conventional Forex pairs. Should the trader buy a Bitcoin currency pair, they are speculating that Bitcoin will strengthen against the quite currency.
When dealing with Bitcoin CFDs, traders can profit from the change of price in Bitcoin without owning the asset. After selecting a Forex broker to facilitate the trade in Bitcoin and other cryptocurrencies, traders can follow the following steps to start trading Bitcoin: Open an account with the selected Forex broker. Create a trading plan. Conduct analysis along with research, and Place a trade. How to choose the right Cryptocurrency Exchange Platform Bitcoin and Cryptocurrency exchanges allow for the sale and purchase of Bitcoin.
The steps involved in trading Bitcoin through an exchange involve the following: Selecting a cryptocurrency exchange platform.
Opening an account. Depositing money into their account, for exchanges that require this, and Opening the first position on the exchange, whether to buy or to sell. Ensure that there is a plan It would be detrimental for traders to start trading blindly as there is no framework provided for the needs and objectives of the trader and essentially traders also have no idea where their entry and exit parameters are. Do not leave funds on an exchange Earlier in this article, hot and cold wallets along with the issues surrounding security on exchanges was discussed.
Beware of giving into fear or greed These are two emotions that tend to control and drive the actions of traders.
Learn the lessons Regardless of whether traders are successful or not, there are lessons to be learnt in trading. Know and Analyse Bitcoin Market trends Firstly, traders need to learn the basics of Bitcoin trading followed by what both fundamental and technical analysis entails and how it must be done. Plan a long-term goal Bitcoin trading needs to be done at a set pace as it is not a sprint to see who can make the most profit in the most efficient or fastest way.
Know the risk factors Trading involves a lot of risks and it is imperative for traders to ensure that they have risk management protocols in place to minimize their losses. Correct use of Leverage Leverage is a useful tool in trading, despite the financial instrument being traded, as it allows the trader to open larger positions despite their initial capital. The use of programmatic strategies This involves experience, skills, and knowledge in coding as it opens a new world for traders to refine their trading skills and to tailor their strategies to precisely what they need.
Learn different methods There are various ways in which Bitcoin can be traded where strategies, utilities, and methods are concerned, and traders should take time in exploring different options to find ways which cater specifically to their needs and objectives. Size positions accordingly While trading, traders are urged to put the correct amount of funds into a trade while keeping tabs on specific sizing methods to ensure that the risk and reward ratios are correct and to avoid putting too much funds at risk.