Cryptocurrency trading is indeed a high-risk activity. The market volatility allows traders to obtain significant profits. But, at the same time, the volatility can drive a trader’s portfolio into the ground, turning valuable assets into dust.
In order to avoid scams and bad trades, everyone should do his own research. Still, doing your own research does not compensate for the trading experience acquired in ages of trading activity.
Having nerves of steel, putting together a decent trading strategy, and sticking to it is harder than it looks. Therefore, using reliable cryptocurrency signals can help you set up your trades in a manner that benefits your portfolio.
Understanding Crypto Signals
A crypto signal is a general term that describes a series of information that tells you which and when to get into a specific cryptocurrency trades, what expectation you should set, and at what point you should exit the trade in order to be profitable.
The more reliable crypto signals are based on a combination of in-depth technical analyses, a lot of research, and an enormous number of hours spent trading cryptocurrency.
Usually, behind a cryptocurrency signals provider stands a whole team of professionals that can determine which trades can be profitable and which cannot.
You can determine that a cryptocurrency signal you receive is of high quality by looking into the information it offers.
A crypto signal should name the crypto pair, indicate whether to go long or short, what’s the limit price, the stop-loss price, and where to take profit.
Trading More Efficiently with Professional Bitcoin Signals
Crypto signals can significantly improve the efficiency of your BTC trading activities.
Instead of intensive trial and error trades, your signals provider can propose to you a crypto pair that he believes will perform well.
He may have identified, for example, that the Ethereum docking may trigger impressive price actions. Therefore, he tells you to consider the BTC/ETH pair. And for this pair, he will tell you to either go short or long.
Going short means that the provider thinks the pair will decrease in value, and you should set a sell order. As for long, the provider has reasons to believe the pair will increase in value, and you should place a buy order.
When you buy in, you will also have the price level you should set as a limit order.
And because decent trading plans include a profit goal and "safe-net," the stop-loss price will tell you at what point you should get out of a trade when it goes against you, while the take-profit order tells you when to sell to gain profit.
To reduce the risk of your portfolio turning to dust, the crypto signals should also come with a risk vs. reward ratio. The ratio is based on the stop-loss and takes profit orders and will tell you how much you could lose from your investment compared to how much you could win.
And although there are still risks associated with cryptocurrency trading, once you set clear goals and choose a signals provider with a high success rate, you can see your portfolio growing beautifully.