Hello crypto traders. The topic of today’s video is cryptocurrency trading strategy. The fact is that for profitable and stable trading, each trader must have his own trading strategy that suits only him. Everyone has different goals, thoughts, and levels of resistance to stress. Therefore, in this video, I will tell you how to create your own trading strategy. Let’s start!
What is a crypto trading strategy?
A trading strategy is a list of rules and conditions for opening and closing positions in digital money trading. Records can be in the form of a Word document on a computer or in printed form. A trading plan is as important as a trader’s diary because it allows you to trade without emotions, stable and profitable, with minimal losses to the deposit.
The trading strategy includes. 1) Emergencies and what to do in their case. For example, if the electricity is cut off, then use a laptop or smartphone with mobile Internet to quickly open or close transactions. 2) Limitation of losses and profits. For example, you have lost or earned 10% of your deposit in a week, which means you do not trade for 1 week and you are resting.
3) Emotional states. Are you upset, not feeling well or sick, angry, depressed, want to sleep? It means you don’t trade at all until these sensations are over. 4) Trading tactics. Let’s say if the market falls, I average through 3commas or open a Short trade on Binance Futures. If the market is flat, I launch cryptocurrency bots. If the market rises, I buy and hold a Long position for several days.
Cryptocurrency trading strategy – recommendations
5) Sources of information. News sites, groups, channels, forums, books on crypto trading, and more. 6) Objectives in trading. Additional income to a salary or the main job? Investing and waiting for several months, trading once a day, or trading for 8 hours? Will there be days off or not? 7) Risk and money management in cryptocurrencies. It was covered in a separate video.
8) A trader’s diary, which describes your successful and unsuccessful transactions, their analysis. The main goal is to understand what to do better in trading next time in order to avoid mistakes? 9) What coins will you trade? 1, 2, or 10 tokens? Spot or Futures Market? 10) Timeframe – 5 or 15 minutes, 1 or 4 hours, daily, weekly, or monthly?
The larger the timeframe, the better technical analysis works, and the easier it is to trade. 11) Rules for entering and exiting transactions. For example, we enter after a breakout or bounce from support and resistance levels, plus the RSI shows oversold or overbought conditions, and the two lines of the Moving Average indicator converge. And we exit the trade at Stop Loss / Take Profit.
How to compose your cryptocurrency trading strategy
12) Stop Loss and Take Profit values. For example, if Stop Loss is 3%, then Take Profit should be 6% minimum. If we do not use Stop Loss, then at least 3commas should be used. 13) Bots. Do we use cryptocurrency bots or not? If so, what settings does the 3commas bot have and what signals do we use for it – so we create our own signals or take someone else’s?.
14) Position size. Usually, this is 1-3 percent of the deposit. 15) Indicators. What indicators do we use and why? 16) Japanese candlesticks and chart patterns. What candlestick patterns and chart patterns do we use or not? Why? 17) News. Paying attention to the news or not? If so, what is the strong news and why?
18) Testing the strategy on a demo account. Let’s say paper trading at 3commas. 19) Improving strategy. If the strategy doesn’t work or stops working, should you try to understand why and replace something in it? For example, change the coin for trading, the timeframe, remove or add an indicator, decrease or increase the position and risk size.
The video on the topic of a trading strategy in cryptocurrencies is coming to an end. I have given you 19 points of the rules and components of a trading strategy that will allow you to create your own strategy or adapt someone else’s strategy for you. This concludes this video and until the next videos on botcryptotrade.com