This article provides exact steps for wrtiting trading plan for crypto currency traders, it works well with Bitcoin BTC, ETH, ADA, XRP and any othe crypto currency with good liquidity and low spreads. The listed crypto currencies are top 5 liquidity and circulating supply leaders in the crypto market. This plan can also be adapted to almost any cryptocurrency or altcoin with high liqidity and moderate to high volatility. The system is for swing trading reversals in the direction of the main trend or in a ranging market.
The first step is to get a good quality crypto charting system, there are many platforms and charting sytems available that are high quality. Determine the main trend on the larger time frames and trends on BTC and the market in general, up or down. In some cases the market may also be ranging between support and resistance levels. We suggest bigger time frames are like H2 (minimum), H4, H8, H12, D1, W1. This is called multiple timeframe analysis and MTFA works very well on forex, gold XAU and crypto currencies for thorough analysis.
Buy Trades
If the larger time frames indicate an uptrend, wait for the market to move down for 2-3 days and stall and go sideways. So you are looking for a big sell off against the main trend, then the price stalls at a support level. This is called a relative low. Then start monitoring and watch for reversal back up into the larger uptrend and make sure the live crypto heatmap is all green, with majors like BTC ETH ADA and XRP all moving higher. see example below. Monitoring the crypto heatmap for upside market momentum along with the smaller time frames will guide your trade entry into the larger reversal uptrend and into the main trend.
ADA Cardano M30 Time Frame
Crypo Currency Market Live Momentum Heatmap
This way the entire crypto market momentum will be behind with strong momentum you as you enter the buy trade. Trading the crypto market this way makes your trade entries much safer while still trading in the direction of the main trend. Manage the trade with stop order and scaled profit taking, especially when using margin or perpetuals, then move stop to breakeven as the market proceeds up. Scale out lots to your resistance price target or hold as bigger trends build.
You can use this strategy to daytrade, or to build a long term position in BTC or the other top crypto currencies with a professional approach, if you are a long term position trader.
Sell Trades
These methods also work exact same way for sells into downtrends. If the main trend on the larger time frames and trends on BTC and the market in general, is down, then wait for BTC to cycle up and stall at resistance. Then start monitoring for a sell into the main downtrend.
XRP Swing Trade H4 Time Frame
Crypto Selloff Live Signals
The moving averages shown in the images are a single EMA and the settings are shown below from the Binance platform “Trading View” setting.
Cryptocurrency Moving Averages
Other Crypto Trading System Components
If you want to trade other cryptos besides BTC, ETH, ADA or XRP we would use the same system as described above. This is because most cryptos move somewhat in tandem with BTC and the other majors. So analyze BTC first, then analyze your favorite cryptos, then if they are all moving in tandem you can still use a system like this, and the overall market with heatmap for guidance on trade entries. Only enter trades with full market momentum backing your entry.
Some crypto trading platforms offer leverage as high as 1000:1 (perpetuals) some offer no leverage at all. On your crypto platform observe the spreads and make sure they are low with little fluctuation. If you cannot locate a crypto demo trading platform you can start by trading very small dollar amounts until you get the hang of it. Stop orders are available also on some, but not all platforms we have seen. Stop orders on all trades are recommended for true swing traders who need to protect smaller accounts. The news calendar events can drive movement, so get access to a good worldwide news calendar to keep track of important news drivers on the larger fiat currencies like the USD, EUR and JPY. Some crypto platforms have price alerts, which can be use to monitor prices for the start ov reversal cycles. We use price alerts on all of our forex trading plans. They work very well for price breakout notifications.
Low Spreads On XRP
USA clients can check Coinbase, Kraken and BinanceUS platforms, they all have advanced charting and execution platforms with robust features. Or any other wallet and charting platform with with robust features.
Crytpo Trading Is The Future
We believe forex and gold trading are great options for traders. Over the next several years crypto trading will become a great option as well. Set up your trading systems now for long term access to this tremendous emerging market.