Trend + vfxAlert: profit on cryptocurrencies.
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- Strategies
Trading on trend indicators remains one of the most profitable strategies on any financial asset. Let's see how trading cryptocurrencies works with vfxAlert tools.
Add broker to vfxAlert
We will work on the cryptocurrency trading platforms Olymp Trade. Add a broker in the settings:
Creating trading preset
The second step to create a preset for filtering crypto trade signals. Choose Bitcoin, Ethereum and Litecoin. vfxAlert signals will confirm trend indicators.
Only strong signals and all calculation algorithms. We will look at the signals for all expiration periods, but remember the high risk of minute options. Expiration should start from 5 minutes.
Indicators and examples signals
All trend indicators work on Moving Averages which are always late. Trend crypto trading signals always need to be confirmed with overbought or oversold oscillators. You also need the speed of the trend and the balance of power of buyers / sellers.
To do this, we use Dashboard - a complex indicator vfxAlert. The "warmer" the BUY or SELL color, the more reliable the signal. Read more on the blog.
We start trading by installing Bollinger Bands on the chart. This is a classic technical trend indicator for trading pullbacks from the borders of the price corridor and the breakdown of the midline.
Read more on the blog. The example confirms the correct operation of Bollinger crypto trading strategies. The price rebounds from the upper border of the channel (resistance level), the midline breakdown confirms the DOWN option.
See another Bollinger signal in the video:
The next option for trending crypto trading is Fibonacci retracement levels. It is a proven technical tool for trading trend continuations and reversals. Unlike Bollinger, it does not use a Moving Average, so breakouts or bounces from levels are more reliable. Available on all brokers and crypto exchanges.
You can use automatic Fibonacci levels from Olymp Trade or manually adjust the level grid for the current cryptocurrency market.
The first example is to continue the trend. The zero Fibonacci level was broken with confirmation by the sinal and Dashboard on vfxAlert. According to statistics, continuation signals are more profitable than reversal ones. Open DOWN option.
The opposite situation is a reversal from the zero level. Dashboard confirms the start of the uptrend, you can open the UP option.
Advice. There was a strong candlestick reversal pattern before the opening candle, so you can open a trade. But, newcomers to trading cryptocurrencies should wait for the breakdown of the first Fibonacci level after the reversal.
Recommendations about use …
- The strategy can be used for crypto trading on AltCoin such as MONERO or DASH. It is not recommended to change the basic Bollinger settings. AltCoins are very volatile. If you make Bollinger very “wide”, there will be many false signals.
- We do not miss strong reversal candlestick patterns such as Doji or Pin bar. You can open a trade even when all the conditions of the strategy are not present. Also, such patterns can cancel even the best crypto signals of any strategy.
- On cryptocurrency trading, we always use strict money management, even when trading is profitable. The option amount is not more than 10 percent of the current deposit.
Summarize.
Cryptocurrency investments, even with high volatility, are a good way for passive and trading profit. All standard technical analysis tools work. The main thing is not to risk the entire deposit and take only strong signals with confirmation from vfxAlert.