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Cryptotrading: entry points for technical analysis

Cryptotrading: entry points for technical analysis

The cryptocurrency market is on the rise: Bitcoin continues to update price highs and there are all prerequisites for the continuation of the bullish trend in 2021. Even football clubs have digital coins. Technical analysis is a great option how to make money on binary options - let's start by looking for reliable entry points.

Let's define the terms. In technical binary options strategy, “entry point” does not mean the exact price of an asset, upon reaching which one can open a new or close the current deal. I mean a zone 5-7 points above/below the calculated value, it can be wider when volatility is growing or less in a sideways market.

Trend indicators

Each of the following methods for finding entry points has its characteristics and deserves a separate big article. We will not go into detailed descriptions of how to use the techniques, read blog, but here is only a direction for your own ideas based on standard indicators present in all trading terminals.

1. Trend lines.

The "classic" method is to see where the market is going, the start/end of rollbacks, where you can open trades. The image shows an uptrend, top binary options signal on bounces from the support/resistance line.

2. Moving Average (MA) crossover.

Crossings indicate a trend reversal, open a binary option at the next candlestick, and exit when an opposite signal appears or an obvious reversal. On strong trends, you can additionally enter on a rebound from Moving Average, as shown in image.

3. Alligator by Bill Williams.

One MA can not give the right binary trading signal, if only because it is the most lagging technical indicator. You need several moving averages with different periods, usually called "fast", "medium" and "slow". Bill Williams managed to find a combination that works well on most cryptocurrencies and is understandable for beginners: downtrend, when the lines are arranged as follows (from top to bottom): "Jaw" (blue), " Teeth "(red), "Lips" (Green). For uptrend, the situation is reversed. Do not open when intertwining lines - "Alligator sleeps".

Oscillators and channels

In addition to filtering delay MA, oscillators add important information about the current state of the market – how much its balance is shifted towards buyers (bulls) or sellers (bears). 

Channel indicators can be considered analogous to trend lines; they are built automatically according to the specified parameters, which reduce the risk of visual errors.