Table of Contents:
- 1. Crypto Trading Signal Services – how to use
- 2. What are those?
- 3. What is important when it comes to using services with Crypto Signals?
- 4. Is it possible to improve the effectiveness of bitcoin signals?
- 5. Summary and conclusion
Crypto Trading Signal Services – how to use
Trading with Bitcoin and all other altcoins is not as easy as it may seem. Although there is a huge potential for profits, we should bear in mind that cryptocurrency exchange is unlike any other out there. Yes, there are some similarities to foreign exchange (forex) and to some other markets, but the fluctuations and rapid changes in the values make cryptocurrency much more dynamic, and as a result much less stable investment.
Besides that, we should also bear in mind that time is of utmost importance. We can spend hours on learning about Bitcoin, but it all comes down to one click. Knowing when to buy or sell Bitcoin can be really rough. For this reason people quite often decide to trust trading signal services, which offer us an additional knowledge and experience that come from cryptocurrency trading specialists. Thanks to signals, you can make the trade, especially if it correlates with your own research. Of course the main purpose of trading signals is to make sure that you don’t have to make the entire research all by yourself. What is more, all the preparations are also done. It means that the only thing you have to do is to invest your money on a signal that was checked by a professional.
Still, there are a lot of questions regarding signals. How the professionals conduct their research to make sure that their trading signal are legitimate? Are signals a trusted mean of learning what to invest? In order to answer these questions, we have prepared for you a set of information that will help you realize how crypto trading signal services work.
Crypto Trading Signal Services – what are those?
But before we do that, let us take a closer look at the idea hiding behind these services. To put it simply, services that offer us crypto trading signals are basically a suggestion and a recommendation that comes from a professional crypto trader. This information helps us decide whether it is a good idea to buy or sell a digital currency.
Although trading markets, especially the ones that concern cryptocurrency, seem to be very violent and dynamic, there is nothing random in there. There are two very important factors that influence the action of the price. These are fundamental developments and technical indicators.
One of the examples how fundamental developments work is the influence of very large company on Bitcoin. For example, if they takes an interest on one of the altcoins or Bitcoin itself, the market will most likely react on it and treat it as a good thing. As a result, the price of BTC will rise, quite significantly truth to be told.
When it comes to technical indicators, then it all depends on the analysis that we apply. If we know how to interpret the data from the carts, we will notice the peak positions in which the investors sell or buy units. These decisions can be quite simply verified – the only thing we have to do is to observe the chart and see the previous years and how it all looked like.
What is important when it comes to using services with Crypto Signals?
One of the most essential things when it comes to using such services is to know that the signals we receive are not going to invest for us. We still have to trade and we still have to take the risk. These signals are just information that you can use for your benefits. However, the decision whether you use them or not is yours.
Yet another thing that we should always remember is to make sure that we can take profits and stop losses. How do we do that? By simply locking in profits and limiting losses by introducing special points at which you will always close out the trade. In that way your profits will be secured. When it comes to “stop loss” levels, they will simply close the trade in order to limit the losses you have suffered so far.
Let’s take that the signal is telling us to buy BTC at $10,000. In such case, we will prepare two limit orders. The first one, the so-called take profit (TP) will be approximately $11,000. The Stops Loss (SL) will be at $9,500. If the value of BTC grows and reaches the TP limit, we will receive $1,000 for every Bitcoin that we invested. It means that we will receive a 10% profit. However, if its price drops, we will only lose 5% of the investment, namely $500.
Is it possible to improve the effectiveness of crypto trading signals?
Of course it is! One of the simplest and yet unappreciated tips we can offer you is to use signals that come from different groups. It doesn’t matter if you pick free or premium signals as long as they can offer you the following qualities. Only then will you be able to increase your chances to win with signals! So, in order to get more winning trades, we should make sure that additional signal providers offer us as follows:
- Different analysis method – we should choose at least one service that focuses on fundamental analysis and at least one that is more into technical analysis.
- Always trace their performance history – make sure that services, which offer you crypto trading signals have recently had a series of positive outcomes. Bear in mind that we should also compare winning ratios over several months if not months.
- Trade only when several signals agree – if it happens that one signal is providing you with specific information, and the other is quiet, you should consider avoiding this investment. The best moment to trade is when at least two signals groups offer you approximately the same suggestion.
It is obvious to say that if you were to follow these rules, you wouldn’t be trading much. However, it is much better to trade less frequently and earn, then lose your funds believing in every single signal that, as it happens with humans, can simply be a mistake. In case of cryptocurrency trading and using signals, it is much better to be calm and cautious.
Summary and conclusion
Crypto trading signals are double-edged swords. They can be a very helpful tool in long-term investing. It is especially true for the skilled traders who share their knowledge and experience on premium signals. What is more, these suggestions are usually based with objective perspective and analysis that we might have missed.
Nevertheless, we should always remember about the fact that signals are only a help – a support that can help you in making decision. They will never be 100% accurate, because they usually come from human being that, just like you and me, can make a mistake.