Profitable crypto trading
Are you someone who has dabbled in trading but hasn’t found much success? Or maybe your day job prevents you from experiencing the thrill of trading?
Maybe you’ve been losing money because of a flawed crypto trading technique or a lack of discipline. If any of this sounds familiar, you are not alone.
Let’s look at a basic but successful trading strategy that may help you generate huge gains. Consider employing a single 20-period Exponential Moving Average (EMA) to achieve substantial returns in the turbulent realm of cryptocurrency trading. You may trade at any time since crypto trades around the clock, and with the market’s volatility, profit chances are everywhere.
What is crypto trading?
Crypto trading is the process of buying and selling cryptocurrencies such as Bitcoin or Ethereum in order to benefit from market fluctuations. The benefit of cryptocurrency trading is that it operates 24 hours a day, seven days a week, unlike conventional stock markets, allowing you to trade at any time.
A proven crypto trading strategy: Step-by-step guide
Step 1: Use the 20 EMA to identify entry points
When the price crosses the 20-EMA, it is a critical entry signal in cryptocurrency trading. If the price crosses over the 20 EMA after several lower lows, it is a strong buy signal. On the other hand, if the price falls below the 20 EMA after attaining higher highs, it is appropriate to enter a short position.
This strategy is very beneficial for day trading, using the 1-hour candlestick as the primary time frame. Once you’ve identified this pattern, go to a 15-minute chart to improve entry accuracy.
Going long (Buy position)
Watch for scenarios in which the price crosses above the 20 EMA following many lower lows. This signals a bullish trend, which is an excellent chance to buy.
Going short (Sell position)
After several higher highs, if the price falls below the 20 EMA, it is a signal to sell.
Step 2: Refine with lower timeframes
Once you’ve found a trend on the 1-hour chart, go on to the 15-minute chart for a more specific entry point.
Avoid premature entries
If the price fluctuates around the EMA line and touches or breaks, avoid trading that position. This method will help you reduce erroneous entries and increase your trading success rate.
Pullback and entry
The price frequently retracts after crossing the 20 EMA. When the price approaches the EMA line but does not touch it, the main trend begins to rise; this is an excellent time to join the trade. If the price retraces but does not break the EMA, it is a signal to buy or sell, depending on the trend.
BTC/USD / 1H & 15 MIN
Step 3: Set a stop loss
Having a stop loss is an essential component of this method.
Why?
Cryptocurrency markets are very volatile, and without a stop loss, a deal may rapidly go against you. By basing your stop loss on the 20 EMA, you can automatically close your trade if the price reverses course and crosses back over the EMA, thereby mitigating your losses. This basic discipline may help you avoid huge losses.
Step 4: Exit with profits booking
How can you exit a trade profitably? There are two main techniques to book profits:
Trailing stop loss
As previously discussed, using the 20 EMA to trail your stop loss ensures the protection of your profit during market reversals.
Price objective
Another option is to establish your objective based on the previous rally distance. After a reversal, establish your profit goal at the same distance as the previous price gain.
Step 5: Maintain discipline and avoid emotional trading
Finally, although having a proven crypto trading technique is important, discipline is the true key to success. Stick to your plan, follow your signals, and avoid making trades based on emotions or outside projections.
The market fluctuates, but the 20 EMA remains your leading indication. Follow it, and you’ll be on your way to successful cryptocurrency trading.
Final thoughts
Using this technique properly yields excellent results despite its apparent simplicity. Whether you’re a day trader or a swing trader, employing the 20 EMA to guide your entry and exit locations will dramatically enhance your trading results. Keep in mind that achieving success in cryptocurrency trading requires dedication and discipline, not blindly following every forecast.
By following these steps, you will be able to confidently navigate the tumultuous world of cryptocurrency and benefit from market swings.
Disclaimer
This post is just for informative purposes and does not constitute financial advice. Trading and investing involve risk, and past performance does not guarantee future results. Before making an investing or trading choice, readers should undertake their own research and evaluate their own circumstances. The author and platform accept no responsibility for any financial losses or damages stemming from the use of this material. Receive personalized advice from a qualified financial advisor.
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