How to use Cryptocurrency Trading Pairs as an Investment Strategy

We believe that beginners should always use this indicator because it is one of the most straightforward and profitable strategies. The simplest way to trade the Bollinger band is to sell when the price hits the upper band and buy when it hits the lower band. However, in trending markets, this approach is not successful enough. Yes, the platform only offers users an online, hot wallet in which to store coins.

• In lower time frames, this indicator is more volatile, and it generates a lot of false signals.
• If you sign up for a pro account, you also have the option to buy and sell futures with a leverage of up to 100x.
• Cryptocurrency pairs are usually denoted as one against the other.
• Similar to the stock market, pair trading in the crypto-market has to be between two correlated digital assets.
• Nonetheless, the rule of thumb when choosing a base currency is to go for one that has the highest number of trading pairs.

Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs. If the account does not have sufficient free available cash to meet the required margin, the trade will not be executed. Overnight Interest Sell/Buy – The overnight interest debited/credited in daily % terms for each instrument. The index hit lows of around 6,939 in the morning but was 2.35 points higher, or 0.03%, at 7,020.95 when European markets closed. LMAX Digital is a trading name of LMAX Digital Broker Limited, authorised and regulated by the Gibraltar Financial Services Commission and is a company registered in Gibraltar . Last but not least, keep track of the market news and global trade to gain a broad understanding of the world of finance.

Crypto trading can eventually offer big returns and is a great way to diversify one’s portfolio. Crypto-to-fiat or crypto-cross pairs, you should explore the potential of each coin for making short- and long-term returns. The best part is that the platform keeps developing, which attracts more and more traders.

Conversely, the bearish Engulfing pattern indicates the buyers have reached their limit. The market now has net sellers who drive the prices to lower lows. Yes, KuCoin only allows you to use cryptocurrency to trade on their platform. Log into your KuCoin account and select the coin or pair you wish to trade. Click on the left side of your screen on “Margin” and choose the leverage you wish to trade with, enter the price, amount, and type of order you would like to place, then click the “Sell” button.

How Can I Start Trading Cryptocurrency Pairs?

You must note that at this stage, the TRIX indicator was also below the zero line. Right after going short, we can see the price crashing and continue to go south. The image below represents the sell trade in the ETH/USD crypto-fiat pair. As you can see, the pair was coinbase cryptocurrency traders continue to face frozen funds in an uptrend, and we were trading the counter-trend moves. When the TRIX indicator goes below the zero line, we have opened a short position. After opening the short position, the price trended sideways for a while then adopts a downtrend forming new lower lows.

After our entry, price action attempted a further uptrend but failed as the pair adopted a steady downtrend and registered a lower low. TRIX is a momentum indicator developed by Jack Hutson in the early 1980s. This indicator displays the percentage rate of change to a triple exponentially smoothed moving average. The purpose is to filter out all the insignificant price movements. This indicator oscillates above, and below the zero lines and thereby identifies the overbought and oversold trading signals.

What are the spreads?

Earlier this year, Bybit introduced USDC options — the first stablecoin-margined option contract in the market — with the exchange pledging to make Ether and SOL options available soon. The security aspect of pair trading has more to do with the trading platform rather than the strategy itself. If you are an avid follower of the digital assets market, you probably know that holding your crypto funds in an exchange is a bad idea.

In the securities market, for instance, you can easily buy equities directly for fiat currency through your broker account. While the same can be done in the crypto-market, buying cryptocurrencies directly for fiat currency is limited only to a few cryptos. Unless you plan on limiting your trading to these few digital currencies, you’ll have to exchange one crypto for acquiring what is cryptocurrency trading another one. To ensure utmost accuracy while trading signals generated by the TRIX indicator, only trade the overbought and oversold areas when you see the reversals near the 100 levels on either of the sides. If the price action goes above the 100-line, it means that the trend is strong. In this case, wait for the reversal below the 100 level to take a sell.

• This indicator generally fails to generate any trading signal in the choppy or ranging market.
• So, when the indicator goes above the centre line, it is an indication for us to go long.
• Plus, when using a crypto exchange to execute this trading strategy, you risk losing your assets to hackers.
• StarkEx for perpetual trading uses external price feeds, which are given to the system in the Oracle price tick transaction.
• Staking allows investors to contribute their assets to a large pool of digital currency, which then accrues additional yield by validating transactions on the relevant network.

This is because the original trend was down, and the sellers were trying to take the prices down, but they failed to do so, and we witnessed a brand new higher high. As you can see, the pair was in a downtrend first, and when the price action approached the oversold area, it indicates the exhaustion of sellers. When the indicator gave the reversal at the oversold area, it was a sign for us to go long. The BB indicator consists of three bands – one above, one below, and one centre. The default settings of the indicator are 20,2, which can be adjusted according to the trade’s trading style. The above-explained strategies are proven ones, but to use them effectively, we suggest you practice it on a demo account before putting real money into it.

Chart Patterns: The Head And Shoulders Pattern

It charges both the market maker and the taker an average fee of 0.10%, which means it offers some of the lowest trading fees we have seen from any cryptocurrency exchange. KuCoin offers a large number of cryptocurrencies and pairs for trading along with futures trading on larger coins like Bitcoin and Ethereum. KuCoin is a cryptocurrency exchange that offers a wide variety of coins to trade. With lots of learning materials for beginners, KuCoin is ideal for someone just getting started with cryptocurrency. Pair trading, being a market-neutral strategy, is well poised for application in the volatile crypto market. The safest platform for executing this strategy is a Contract for Difference broker platform.

• The bullish and bearish reversals can be used to spot the upcoming reversals.
• Dogecoin is also used as a base currency, especially when trading low market cap coins where it might be burdensome to trade them with large-cap coins like Bitcoin.
• Alternatively, you can trade forex CFDs which are contract agreements for exchanging the currency pair price difference from when you open and close a position.
• When investing in crypto-assets, you will not have access to the Financial Ombudsman Service or the Financial Services Compensation Scheme if something goes wrong.
• Given its revolutionary applications, it’s no surprise that ChainLink is attracting more and more traders from all over the globe.

The world of crypto trading is like an expanding universe of tech innovations, financial regulations, and investment opportunities. Thus, it’s hard to keep track of all the coins out there and their applications. The world social trading service of orbex of crypto trading is constantly changing, with Binance coin being one of the best coins in the industry. In fact, many traders believe that Binance is a real game-changer as it supports operations on the Binance exchange.

What cryptocurrencies will rise in 2021?

Discover how to increase your chances of trading success, with data gleaned from over 100,00 IG accounts. Explore the range of markets you can trade – and learn how they work – with IG Academy’s free ’introducing the financial markets’ course. Your profit or loss is still calculated according to the full size of your position, so leverage will magnify both profits and losses. Note that losses can exceed deposits – manage your risks carefully.

Nonetheless, the rule of thumb when choosing a base currency is to go for one that has the highest number of trading pairs. For this reason, it’s recommended to stick to BTC and ETH as your go-to base currencies since most cryptos have pegged their value on these two currencies. Once you’ve acquired the crypto, you can exchange it for or trade it against other cryptocurrencies.

The rise of cryptocurrency and blockchain technology in areas far beyond the financial sector is a huge motivator for crypto traders. No surprise some experts believe that cryptocurrency trading volumes and activities will continue to increase despite the ongoing pandemic. Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. This is a unique trading strategy created by us to trade the Crypto market alone. Here, we used the 200 period MA to confirm the trend direction, and we paired the RSI with the Engulfing pattern to confirm the pattern’s strength.

But despite its use in illicit activities, such as trades on the Dark Web, Monero is one of the best cryptos to trade. Defined as the process of buying and selling cryptos or the act of speculating on their prices, is an attractive investment option. Have a look at the top 9 most traded cryptocurrencies and learn more about crypto trading.

Engulfing is a trend reversal pattern which often gives a lot of signals in trending conditions. The first thing we did is to identify the pattern, and waited for the price to break the significant resistance level to open a position. At times the price action develops the bullish engulfing pattern, but the price does not trend upwards. If you just go by the definition and trade the pattern right away, you may end up on the losing side. The Kucoin platform allows you to trade over 700 crypto coins and tokens, including all the leading lights and many lesser-known altcoins a well.

The UK regulators only enable professional traders or institutional firms with a history to access these riskier financial products. Additionally, the strategy is best suited for intermediate and experienced traders who are already familiar with analyzing prices and market fundamentals. If you are looking to earn regular returns regardless of market trends, you too should consider using the pair trading strategy. Note, however, that even though pair trading is relatively safe, only invest what you can afford to lose and operate within tolerable risk levels.

EXCHANGE TRADED FUNDS

When trading forex, you’d buy and sell one currency against another at an agreed price. If you’ve ever bought an item from an international online vendor in a currency that’s different to your native tender, you’ve had exposure to forex. The AVAOPTIONS Trading Conditions display the Typical Bid-Ask Spreads for Instruments as well as for Options on the Instruments .