How to use trading signals for successful trading on the spot
The world of cryptocurrency trading has become more and more popular in recent years, thousands of traders trying to win their lives buying and selling cryptocurrencies. While some individuals have achieved significant success, many others have lost money because of weak trading strategies.
A common mistake that many new traders take is to rely only on their own intuition or emotions when making decisions about their trades. However, this approach can be disastrous if the trader does not use any technical analysis, indicators or other tools to support his decisions.
In this article, we will explore the use of trading signals for successful trading on the scene on the cryptocurrency market.
What are trading signals?
Trading signals are alerts indicating when a trade based on predefined conditions should be entered or exit. These signals can be generated using various technical indicators such as:
- Movement media
- Relative force index (RSI)
- Bollinger Bands
- Stocastic oscillator
- Impulse indicators
Types of trading signals
There are two main types of trading signals:
Bullish and Bearish .
* Bullish signal : This type of signal indicates that the market is in trend upwards, indicating a potential purchase opportunity.
* Bearish signal : This type of signal indicates that the market is in a tendency down, indicating a potential sale opportunity.
How to use trading signals for successful trading on the spot
To effectively use trading signals, follow these steps:
- Choose the right indicators : Select indicators that are relevant to your cryptocurrency pair and have a proven record in generating profitable signals.
- Set multiple alerts : Set multiple alerts at different price levels such as 10 pips above or below the current level.
- Set up alert settings
: Adjust the alert settings to optimize your trading experience including:
* Thresholds (eg 5% move over/below the current price)
* Time times (eg 1 hour, 4 hours of charts)
* Alert frequency (eg every hour only when the signal is generated)
- Use a trading plan : Elaborate a trading plan that presents the risk management strategies and input/outputs.
- BackTest Your Strategy : BackTest Your trading strategy using historical data to ensure that it generates long -term profitable signals.
Example of use of trading signals for on -site trading
Let’s say you are a business trader (BTC). You have chosen to use Bolninger bands as an indicator, setting alerts to 10 pips on top and below the current price. Your trading plan includes:
- Input: Buy BTC when signal is generated (eg, movement by 0.1% over the current price)
- Exit: Sell BTC when signal is generated (eg 0.1% movement below current price)
Using trading software such as Metatrader or Tradingview, you would configure your alerts and configure your plan as follows:
| Indicator | Threshold | Time time |
| — | — | — |
| Bollinger belts 10 pips above | 4 -hour graph |
Once you have configured the plan, you can monitor the indicator and enter transactions accordingly.
Tips for successful trading on the spot with trading signals
While the use of trading signals can increase your chances of success in the on -site trading, it is essential to remember that no trading strategy is righteous. Here are some additional tips to keep in mind:
* Remain discipline : Stay in your plan and avoid impulsive emotional factors -based decisions.
* Learn continuously : Be up to date with market developments and adjust your indicators and plan as needed.
* Manage the risk
: Set the stop loss rates and risk reward relationships to protect your capital.
* Monitor your transactions : Pay attention to the performance of your transactions and adjust your strategy accordingly.
