Cryptocurrency: Bitcoin trading (BTC) trading strategies
The world of cryptocurrencies has registered a significant increase in popularity in the last decade, Bitcoin (BTC) being the most recognized and widely traded. As the cryptocurrency market continues to grow and evolve, traders seek new ways to navigate the complex landscape and maximize their yield. An effective strategy for the trading of bitcoin is by analyzing the action of prices, which involves studying the models and movements of the cryptocurrency price.
understanding price action
The action of prices refers to the visual representation of the price movement of a cryptocurrency, including trends, patterns and levels of support and resistance. This includes diagram models, such as head and shoulders, panels and triangles, as well as technical indicators such as moving media and RSI. Analyzing these elements, traders can identify potential trading opportunities and make the knowledge of the case.
Key Strategies for Price Action for Bitcoin Trading
Here are some key strategies for the prices you need to consider when trading Bitcoin:
- head model and shoulders : This model is characterized by a narrow head that forms at the top of a decreasing tendency, followed by a shoulder formation, often accompanied by a drop in prices. A separation above the shoulder can trigger a short input on this configuration.
- panels : A wedding pattern consists of two convergent triangles that are formed when the price moves up and then down. The tip of a triangle is often a strong level of support for currency. Traders are looking for panels with lower maximums to confirm the presence of a tendency reversal or a level of support.
- Triangles : The triangles are made up of three points in which the price has moved in a specific direction, creating a model that can be used as a basis for trading decisions. For example, a triangle above the upper line indicates a potential purchase configuration, while one below the lower line may suggest a sales configuration.
- Trend lines : The tendency lines are drawn along the tendency line of the price graph, indicating support levels or resistance based on previous performances. Traders can use these to set purchase and sale signals, taking into account both short -term and long -term trends.
Price action indicators
Several technical indicators can be used in conjunction with the analysis of price action to improve trading decisions:
- Mobile (Mas) media
: Mas are used as a trend indicator by drawing the average of two or more prices for different periods of time. Traders are looking for Mas to confirm or reject trends and use them to set purchase and sale signals.
- Relative resistance index (RSI) : RSI measures the volatility of the market by comparing the closing price with its price range for a specified period. A reading below 30 indicates exceeding conditions, while over 70 years it suggests over -stated conditions. Traders are looking for 50 or smaller Reads to confirm trends.
- Bollinger (BB) bands : BBS are volatility -based indicators consisting of two standard deviations from the average price represented on a graph. The bands extend as the prices are removed from their media, and traders can use them to set purchase and sale signals.
Tips for Bitcoin trading with price action
To successfully trading Bitcoin using prices action strategies:
- Remain discipline : Respect your trading plan, even in the face of market volatility or unexpected changes.
- Monitor the Graphs closely : Review the diagrams regularly to identify potential trading opportunities based on your analysis.
- Use more indicators : Combine different indicators to improve accuracy and trust in your trading decisions.
- Do not exceed : Avoid buying and selling excessive, as this can lead to market fatigue and low profits.
Conclusion
Price action strategies offer a valuable framework for traders to browse in the complex world of bitcoin.