7 Proven Ideas for Successful Crypto Trading

What are the Proven ideas for successful crypto trading? Investing in crypto assets involves high risks due to the volatility of the crypto market.

This is a fact that is known to all traders which is why you, especially if you are a beginner, need to follow a strategic plan to go ahead with your investment endeavor. This will prevent you from incurring losses on the capital invested.

You will need to follow the ideas and tips of the experts regarding crypto trading for that matter.

Also, you must have some basic understanding of the crypto market as well as the candlestick charts along with blockchain technology.

These tips and ideas will enable you to use the online charting tools and other indicators in the best possible way to make your investments more productive.

There are many different trading opportunities, which might be very exciting, but to be a successful crypto trader you should choose the right one to make considerable profits. Knowing the tricks is the key in this case.

With so many things to know and learn, it is needless to say that investing in and trading with the digital asset class should never be hurried or involve any guesswork.

This article will tell you about just that which will help you to leverage one or all of the strategies at once to maximize your profits from the available opportunities, sometimes, irrespective of the market movements.

7 Proven Ideas for Successful Crypto Trading

Proven Ideas for Successful Crypto Trading

You will come across lots of websites that will tell you about the different ways in which you can make successful crypto trades.

However, not all of these ideas may be helpful to increase your probability to make profits. Check out Crypto Dollar Cost Averaging Strategy.

Here are some of the best ideas to follow to create a successful crypto trading strategy and be well ahead in the competition.

These ideas will also prevent you from making any panic decisions while buying or selling crypto assets, which most of the times prove to be wrong.

1. Combining Price Action and Trading Strategies:

Whether you trade with Bitcoin, Ethereum, or any other crypto coins, the best way to go ahead in order to ensure that you make a lot of profit from your trades is to combine the price action strategy along with the crypto trading strategy.

Ideally, this should be combined in a ratio of 17:1. This ideally is the best crypto trading idea for making maximum profit and therefore features at the top of this list.

The good thing about this strategy is that you will need to use only one specific and probably the best indicator: the On Balance Volume or OBV, especially when you trade with Bitcoins.

This indicator will use a variety of price activities and trading volumes to point out the amount of money flowing in and out of the market and analyze them. There are three specific indications of the OBV such as:

  • When the OBV is trading down and the Bitcoin is trading up, which indicates people selling the assets.
  • On the other hand, if it is just the opposite, it indicates it is time for buying Bitcoins.
  • When the two move in the same direction, which is what you really need to see because this indicates the best time to trade.

However, none of the technical indicators available is 100% correct all the time. Therefore, make sure that you use the OBV indicator and support it with other evidence to get more confirmation and make your trades more sustainable.

2. Setting Up the Price Charts

Another good idea to buy crypto at the right time to enhance your profit probability is by setting up the price charts properly. Once again, the OBV will play a significant role in this matter.

For this, first you have to overlay the price chart of the specific crypto coin you want to trade with the OBV indicator.

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If you wish to trade with both Bitcoin and Etereum or simply want to make a comparison then you will need to overall all the three properly. This will give you three distinct windows such as:

  • One for the Bitcoin chart
  • One for the Ethereum chart and
  • One for the OVB indicator.

Once this is set up properly, you should now try to spot the difference between the prices of Bitcoin and Ethereum to find the divergence quotient. This process is called the Smart Money Divergence.

In simple terms it means when the price of one crypto coin swings high or breaks above a resistance and that of the other coin fails to do so.

Next, before buying, you should confirm with the OBV to find out which particular crypto coin is ‘lying.’

Also, wait for the OBV to move in the direction of the trend since that will indicate the price of the lagging coin will soon move beyond the resistance level or the state in which it was trading before.

If you only make out the right swing you will be able to increase your profit, provided you place the right buying limit order.

3. Placing the Buying Limit Order

Your chances of making profits from a crypto trade will be enhanced significantly if only you place the buying order correctly. Here is an idea to do it in the best way.

Always make sure that you place the buying limit order at the resistance level. This will ensure that you catch on the probable breakout.

You must follow the OBV indicator once again for that. When it gives the green signal, place the buying limit order simply at the resistance level.

This will surely trigger a trade if you are dealing with Bitcoins because the price of it will always break much higher than you can expect, much sooner than later.

Now, you should look for protection. This means that you will now need to place the stop loss order and take your profits.

It is advised that you place your stop loss order always under the breakout candle. Use stop losses. Ideally, you should set up the stop loss orders on every trade you make.

And, when it comes to taking profits, do the same when the OBV reads 105,000. Both these are smart trading moves because the OBV reading of 105,000 is considered to be the extreme case that indicates a trend hiatus.

This is the best time to take profits. However, your profit loss ratio should be none other than 2:1.

4. Enhancing Potentiality of Day Trading Strategy:

If you are into day trading with Bitcoin then, be informed that there are considerable amounts of risks involved in it.

However, there is nothing to abstain from day trading because there are lots of ways in which you can minimize these risks.

Here are some of the best ideas from some of the top experts in crypto trading that will help you a great deal in this matter and boost up your Bitcoin day trading strategy.

First, you should combine different types of crypto coins in your trade so that it is well diversified. This means that you will not have to take on all the risks associated with one particular crypto coin.

Second, make sure that the trading costs are minimized because too much of it, even though it may be small in amount, will eat up a major portion of your profits.

Since you will be making multiple trades in a day and open different positions and pay for the transaction fees for each, the ultimate amount will be quite high.

The best way to reduce trading costs is to choose a crypto exchange that charges low or no fees for making a transaction.

Next, you should keep a close watch on the different trading times so that you can make your plans accordingly.

It is required to make sure that the trading times match with your daily schedule so that none of your other commitments are affected while you sit in front of your computer the whole day.

Also, make sure that you are up to date with the latest events and news surrounding the crypto market.

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This will help you to make more productive and profitable plans to trade your coins and stay ahead of the competition. Follow the news and news stories and also set up alerts for notifications.

Finally, make sure that you use proper tools and indicators for a proper technical and fundamental analysis.

One such is OBV but there are others that may be useful as well. A proper technical analysis is absolutely necessary to justify your trades, each of them, and maximize your profit chances, from each of them.

5. Following Golden Cross and Death Cross Strategy:

The Golden Cross and Death Cross strategy is a particular crypto trading strategy that uses Moving Averages.

The MAs are typically a chart that indicates the mean average of the price of a crypto coin with the help of a simple line. These price movements are calculated over a specific period of time. For example:

  • A 50 MA indicates the average price of the crypto coin over the past 50 days and
  • A 200 MA indicates the average price of the crypto coin over the past 200 days.

Always consider a long time frame, a week for an example, because that will indicate the price movements even better.

This is however a long-term crypto trading strategy and you should not consider anything that is less than 18 months.

In this method, you should ideally look for the crossovers. There are typically two specific types of crossovers you should be looking for such as:

  • Convergence – This is called the Golden Cross and indicates the 50 MA crossing over 200 MA and
  • Divergence – This is called the Death Cross and indicates the 50 MA crossing below 200 MA.

Considering convergence will mean that you are looking for a momentum in the price for a short term that will exceed the momentum for a long term.

This is ideally a signal to buy the crypto coins. This is the specific situation of the market when there are more buyers in the market which eventually drives the prices of a specific crypto asset higher.

Divergences, on the other hand, are just the opposites of convergences. This is when the short term momentum falls in comparison to long term momentum. This signals the time to sell off your crypto holdings and exit the market.

To set up the moving averages you will need to follow these steps:

  • Log in to your account to access the online charting tool
  • Make changes in the time frame to either daily or weekly
  • Search for Moving Averages by clicking on the indicator button
  • Double click on it to add two MAs.

To complete the setting, you will also need to make changes in each of the Moving Averages such as its length to 50 and 200.

If you want the two lines of the moving Averages to appear in two different colors to help you distinguish between the two, you may also click on the style and color.

Experts suggest that if you want to follow this long term strategy you should be patient and not expect to make profits overnight.

Also, this strategy should only be practiced in an extremely volatile market condition, which is when the prices of the crypto assets are moving up and down sharply.

If the two lines of the two Moving Averages diverge and converge more often, it will indicate a sideways movement of the market.

This will trigger multiple buying and selling. This is a specific situation that only occurs in two conditions such as:

  • When the market is extremely uncertain and
  • When there is the same number of bullish and bearish traders in the market.

This is the only downside of this particular crypto trading idea. However, you will still gain considerably which will prevail over the losses you may incur from very low volatile periods.

6. Trading with RSI Divergence Strategy:

RSI or Relative Strength Index divergence strategy is one that should be followed by a crypto trader who is more technical and strategic.

This is a strategy that will help the traders to identify and trade according to the timing trend reversals even before that happens. This is the time when the price starts moving from a downward trend to upward trend.

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The Relative Strength Index is a specific chart indicator that calculates the average number of profits and losses to evaluate the momentum.

This is usually done over a period of 14 days. There is a line in this indicator that moves between 0 and 100. This indicates two things such as:

  • When it is on the lower side or below 30, it indicates the crypto asset is oversold and
  • When it is on the higher side and over 70, it indicates the asset is overbought.

Therefore, the ideal time to trade is when the line is between 30 and 70. This will indicate a stable and more reasonable price without much of a chance to rise and fall suddenly.

However, the experts warn not to use this trading strategy based on the line of oscillation alone because it can at times show wrong results.

Therefore, you will need to consider other factors to make your trading strategy more productive.

Make sure that you consider divergences for over a time period of four hours, if not daily. This will enable you to make out the stronger movements in the price line of the asset both in the midterm and in the long term.

Also, make sure that you look for smaller alterations in the price trends such as a pullback when there is a downward trend.

This will help you to spot the divergence which will show the changes in price momentum from bearish to bullish.

7. Other Crypto Trading Ideas:

In order to make the most of the volatility of the crypto market and the significant movements of the prices of the crypto assets, here are some of the other proven ways that will enable you to follow a crypto trading strategy to make more profits.

  • Crypto Scalping – This is the strategy of making small trades that will minimize the chances of incurring losses and take advantage to the fullest of the small movements of the market by making a quick entry and exit position in the day. This strategy is much safer and allows trading any time.
  • Dips and Hold – This is the strategy of buying crypto coins when you notice an upward movement of the crypto asset which is undervalued. This specific trading strategy does not need any high-end software to make most accurate predictions.
  • Staking Coins – Investing in staking coins is another good crypto trading idea. The main advantage of this strategy is that you will need little or no maintenance after you buy and lock the coins. You will also be able to sell these coins whenever you feel like without needing to wait for the following staking cycle.
  • Lending – You can lend your crypto holdings to the lending platform so that they do all the trading and simply pay you interest on your borrowings. This is one of the best ideas to make profit from crypto assets but it needs creating a strong crypto portfolio. However, the best part of this strategy is that you will not need to sit in front of your computer the whole day to look for the best opportunities or risk your money.

However, it is important to know in the end that no matter whichever crypto trading strategy you choose, it is always advised that you research a lot before jumping into it.

This will make you knowledgeable and protect you from incurring losses.

Conclusion

If you follow the right crypto trading strategies with a cool head you will be on the top. You will need to do a lot of research to know a lot of things. These ideas from the experts will help you make profits from your trades in all market conditions.