Not choosing finance as my major in college is one of my biggest regrets. I started learning about stocks/finance/forex online in my freshman year. The red and green screens filled my life with color, captivating me. With endless aspirations for the market, I opened an account in my sophomore year, gradually learned about the cryptocurrency world and Bitcoin, and through an introduction from a classmate, I learned more and more, feeling very interested and thus started my investment career. Like most friends who entered the market not long ago, I was initially fascinated by technical indicators, constantly backtesting with cryptocurrencies to find patterns; eager to enter low-priced coins or coins that had severely corrected, believing they were safer. In fact, these understandings of the market were completely wrong.
Later I realized that if you want to make quick profits in the market, you must do short-term and medium-to-long-term compounding together! The summary is: don't let the blood of profits cloud your judgment. You must understand that the hardest thing in the world is how to sustain profits. You must review seriously whether it's luck or skill; a stable trading system that suits you is the key to continuous profit.
There is a saying that impressed me: Ideology is something that if you don't occupy, others will occupy it.
Today's article is about cryptocurrency trading strategies and Bitcoin intraday trading. In fact, Bitcoin is currently the hottest trading market. At this moment, it is hotter than stock trading, oil trading, gold trading, and any other market.
Exchanges for Bitcoin and cryptocurrency trading
One reason Bitcoin is so popular among short-term traders is that there are many different Bitcoin exchanges to choose from. Finding the best Bitcoin exchange depends on many different factors. These factors include your nationality, preferred payment method, fees, limits, liquidity needs, and other considerations.
Here are some top cryptocurrency exchanges in the market:
Coinbase is the largest cryptocurrency exchange in the world. It is suitable for most countries in the USA, Canada, and Europe. It offers multiple payment methods.
Binance is the second largest exchange, trading over 130 different currencies. Low trading fees (0.1%).
Bitmex is the third largest exchange, trading only Bitcoin. It is very suitable for short selling and margin trading.
Bittrex is an exchange based in the United States, founded by former Microsoft security experts.
Robinhood is a new exchange with 6 million users, offering zero trading fees.
OKEx is an exchange based in Hong Kong. It trades over 145 different cryptocurrencies.
GDAX - US exchange allowing users to trade Bitcoin, Ethereum, Litecoin, and other cryptocurrencies.
itBit is both a global over-the-counter (OTC) trading platform and a global Bitcoin trading platform.
Coinmama - makes buying and selling easy. Accepts credit cards and has a large operation globally.
How to conduct Bitcoin intraday trading. Although long-term traders prefer to hold Bitcoin positions for a long time, short-term traders find Bitcoin profitable for many reasons:
The cryptocurrency market is more volatile than the stock market.
Bitcoin trades 7 days a week, 24 hours a day.
Bitcoin allows for large trades at a low cost.
Bitcoin is the most liquid cryptocurrency.
Due to Bitcoin's greater volatility than other tradable assets, there are many profitable trading opportunities every day. As with regular currencies, using technical indicators makes it easier to judge when prices may rise. Trading volume, relative strength, oscillation index, and moving averages can all be applied to Bitcoin intraday trading.
It's important to pay attention to technical indicators and development trends. Below we will discuss OBV trading and how to start buying and selling cryptocurrencies.
Best Bitcoin Trading Strategies - 5 Simple Steps to Profit
The only indicator you need is:
Volume (OBV): This is one of the best indicators for Bitcoin intraday trading. It is mainly used to analyze the total amount of capital flowing in and out. OVB combines trading volume and price, which tells you the total amount of money flowing into and out of the market.
The OBV indicator can be found on most trading platforms, and it’s very simple to read information from the OBV indicator. Theoretically, if Bitcoin is rising while OVB is falling, it indicates that people are selling during this rebound. This upward trend is unsustainable, and vice versa.
What we want to see is that OVB aligns with the Bitcoin price direction. No technical indicator is 100% effective; our team uses the OVB indicator and other valid evidence for confirmation.
Step 1: Load the Ethereum chart and OVB indicator onto the Bitcoin chart.
Your chart setup should have three windows. One for the Bitcoin chart, another for the Ethereum chart, and the last for the OVB indicator.
Step 2: Look for price differences between Bitcoin prices and Ethereum prices.
In simple terms, we will focus on the price differences between Bitcoin prices and Ethereum prices.
For example, if Ethereum's price breaks through an important resistance or volatility high while Bitcoin fails to do so, divergence occurs. This means that one of these two cryptocurrencies is 'lying'. This is the main reason we use this cryptocurrency trading strategy and Ethereum trading strategy.
From the above chart, we can see that Bitcoin's price failed to break through resistance, while Ethereum's price broke through resistance and set a new high. This is the first trading signal.
The concept of price divergence is effective because when we are in a trend, the cryptocurrency market as a whole should move in the same direction. For decades, all other major asset classes have followed the same principle. The same goes for cryptocurrency trading strategies. Of course, we also need the OBV indicator for confirmation.
Step 3: OVB increases in the direction of the trend.
If Bitcoin's price lags behind Ethereum's price, it means that Bitcoin will eventually follow Ethereum's price and break through resistance. But how do we know?
In simple terms, OVB is a significant technical indicator. It tells us whether funds are buying or selling Bitcoin. What we want to see is that when Bitcoin fails to break a resistance level or volatility high while Ethereum has broken through, OVB increases in the direction of the trend. We also hope it exceeds the previous trading volume level of Bitcoin at this resistance level (see below).
Step 4: Set your buy breakout orders at the resistance level to catch possible breakouts.
Once the OVB indicator signals, all we need to do is set a breakout order. Anticipate possible breakouts and set them at the resistance level.
Step 5: Place your SL below the breakout point.
Setting a stop loss below the breakout candle is a wise trading method.
When we talk about taking profits, a clear reading above 105,000 is an extreme reading indicating that the trend has at least paused. This is where we want to take profits or adopt a trailing stop loss.
Note*: The above is an example of a buying trade; the same rules apply to selling trades, just in reverse. In the chart below, you can see an actual example of a selling trade.
Of course, while knowing these trades, you also need to know some more important skills! These are the iron rules of trading cryptocurrencies!
Sharing a simple yet very effective trading strategy! Hope it helps everyone!
The first rule: Closely follow the trading ups and downs of Bitcoin. Usually, Bitcoin is the barometer for the ups and downs of other smaller coins in the market. There are few coins with a strong conceptual logic like Ethereum that occasionally move independently of Bitcoin; other altcoins generally cannot escape Bitcoin's influence.
The second rule: Seize the golden moment for trading. The phenomenon of 'golden light' is most likely to occur between 24:00 and 1:00 the next day. Those looking for bargains can place ultra-low buy orders before sleeping or set ideal sell orders, as this is a time of low trading volume in most parts of the world, and anything can happen.
The third rule: Capture the price trend of the intermediate currency USDT. Generally, USDT and Bitcoin move in opposite directions. If you notice a rapid rise in USDT one day, be on alert for a possible sharp drop in Bitcoin; conversely, when Bitcoin rises, it’s the golden low point to buy USDT.
The fourth rule: Pay attention to central bank financial news from various countries every day. The most important factor influencing the cryptocurrency market's volatility is the attitude of various governments toward Bitcoin. If it's suppression or control, the market will generally experience a decline; additionally, the impact of US financial policies is also significant, such as the recent proposal to tax the wealthy.
The fifth rule: Pay attention to several key time periods to reduce risks and increase profits. Every day from 6 AM to 8 AM is a key point for judging buy and sell, and it is also the basis for judging the day's ups and downs. If it has been falling from midnight to 6 AM, and it continues to fall during this time, it is an opportunity to buy or add positions, and it is basically going to rise that day. Conversely, if it has been rising from midnight to 6 AM, and it continues to rise during this time, it is a selling opportunity, and it is highly likely to fall that day.
The sixth rule: Black Friday. In the cryptocurrency world, there is a saying about 'Black Friday,' where significant drops on Fridays occur more often, but there can also be sideways movement or large rises. It’s not particularly accurate, just pay a little attention to the news.
The seventh rule: Trading volume is the lifeline of digital currencies. If there is a certain trading volume guarantee for a cryptocurrency that has dropped, don't worry; holding patiently will definitely allow you to break even. The short term may take a week, while the long term may take a month. If you have spare USDT, you can add positions in batches to lower the average price, and it will recover faster with lower costs. If you don't have spare money, just wait; it won't disappoint you.
The eighth rule: Do not trade frequently. Holding long positions in the same cryptocurrency is much more profitable than frequent trading, which mainly tests your patience.
Lastly, I am Yan An, I have been in the cryptocurrency circle for many years, love to speak the truth, update daily, share selflessly. If it helps, feel free to follow, like, comment, and share.