Cryptocurrency trading has become so popular that developers decided to simplify the process by designing various tools for algorithmic trading. Thus, traders who don't even have any experience in this field can generate income using algorithmic cryptocurrency trading. One of the best algorithmic trading tools is considered crypto trading signals. Their goal is to make cryptocurrency trading more efficient and help traders make deals with minimal risk.
To trade on a crypto exchange, you need to have an effective strategy. But not everyone has one. For example, to make a profit, one of the most common strategies is to alternate between short-term trading and long-term investments. But even here not everything is clear. In particular, how to choose which coin to sell now, and which to keep for later? This is where we need cryptocurrency signals.
Before we tell you how to use crypto signals, let's take a closer look at what they are and how they work.
What are crypto trading signals?
Trading signals are alerts that will tell you when you should buy or sell, and which coins you should use.
In other words, the essence of this service is that the trader gets information about possible profitable deals from analytics. The deals are realized in two ways:
- Manually, when the trader decides for himself whether or not to make a trade.
- Automatically, by configuring all necessary parameters based on the analyst's forecast.
Signals are the outcome of careful forecasting of the circumstance and are required for making sound judgments. When making such projections on your own, it is not always easy to obtain accurate and dependable data. Even yet, not everyone can effectively understand graphical data. As a result, some skilled traders' crypto-signals do not function.
We can say that cryptocurrency trading signals are a symbiosis of insider information about future rate changes for certain coins and analysis of the cryptocurrency market. Most often they are forecasts based on someone's analytical work.
The advantages of using crypto trading signals are quite obvious:
- You can reduce the risks. Using the right signals allows you to protect yourself from the majority of unsuccessful transactions. Simply put, there is less chance of losing money and more chance of earning it.
- Switching to automation. Using signals allows you to do away with all the routine work that traders do not like so much. The user just has to follow the direction that the crypto signal sets, and have a lot of free time;
- Allows you to get rid of doubts. Transactions on the exchange are often associated with an emotional aspect. Traders don't want to build complex schemes of work but are guided by emotions. Because of this, it is not always possible to win. With a clear guide to action created by a team of professionals, all doubts are eliminated, because there is a clear and logically structured strategy. All that remains is to use it. In addition, any stressful factors are excluded here.
Crypto signals are suitable for both beginners and experienced traders. This type of algorithmic trading helps experienced traders to find new strategies. In turn, novice traders have the opportunity to gain the necessary experience and knowledge of crypto trading. In addition, signals fully automate the trading process and contribute to the financial security of traders through the use of stop loss. This way, participants in the market can avoid bankruptcy while trading cryptocurrency.
To summarize, the use of cryptocurrency signals will be able to increase traders' productivity and income.
Ways to get trading signals
You can get cryptocurrency signals from a fairly large number of sources:
- Most often, traders use the services of special sites or portals. As a rule, they require payment for the signals, but there are some resources offering their services for free.
- Private crypto trading groups. They do not accept all traders into their ranks, but they share secret insider information allowing traders to work correctly on crypto exchanges.
- Services of professional level, where only the latest analytical information is listed. In addition, these platforms usually offer analysis of existing trends.
- Bots and software. They are universal because they can gather information from several sources simultaneously.
- Thematic forums where users exchange their own experiences.
Of course, it is impossible to say that any of the above methods provide complete information. Therefore, you should always check cryptocurrency trading signals from different sources.
How to read crypto trading signals?
Just getting cryptocurrency trading signals to buy this or that coin is not enough. You need to be able to interpret the information in it and enter into a deal at the right time.
Usually, signals are received in a standard format. The message specifies:
- Exchanges on which this signal works.
- Cryptocurrency pair.
- The recommended buy price.
- Take Profit - the price level at which the cryptocurrency can be sold.
- Stop-loss - the price level at which a digital coin is sold if its rate begins to fall sharply.
For example, one of the Ethereum trading signals would look like this:
12.06.2022/ 19:46 BUY BINANCE ETH/USDT 1167.24, tp 1261.54, st 1090.78
This line may look different in different signal sources. Some signal providers use a different way of recording, some, for example, do not provide data on take profit and stop loss.
Signals should be used immediately upon receiving them, within the first three minutes. Experts advise not to trade on the signals 5 minutes before the start of a new hour and within the first 5 minutes of a new hour. It is necessary to follow the news and remember that any big event can bring down (or up) the rate of cryptocurrency.
Let's take a look at a few rules that will allow you to properly track cryptocurrency rise based on the signals provided:
- You should never buy cryptocurrencies if they do not show a growth of at least 5%. Even better, if this figure is even higher.
- The same goes for maximum growth. Experts do not recommend buying coins if their max predictable growth is less than 15%. There will be no benefit from such an investment. More precisely, the chances of it are minimal.
- Be sure to check social networks for information from leading personalities in the cryptocurrency markets.
- Look at the ratings of coins. It is better to work with cryptocurrencies that are in the top positions of these rankings.
When working with signals, always try to use all available tools. This will increase the possibility of a successful transaction.
Paid or free signals?
Of course, few people want to share valuable information for free, because there is hard work behind them. That's why you usually have to pay for crypto signals. Although there are free offers available. The common opinion is that cryptocurrency trading signals free is usually a bad source for a trader because the accuracy of forecasts is low. Nevertheless, there are services like Tradingview, which are popular among traders thanks to the high level of reliability combined with speed and convenient information. At such services, traders of varying degrees of skill can present their signals on a paid or free basis.
Sources of cryptocurrency buy-sell signals are usually more informative. However, you should keep in mind that there are a lot of fraudulent services. You need to pay attention to the size of the audience, the presence of an active community, and the authority of the resource, which is usually earned over the years.
In addition, if you want to get reliable data, it is better not to save money. Choose the signal source with great care, because the reliability of the tips depends on it. Although you must keep in mind that even the most reliable source is not safe from mistakes.
Popular trading signal services
Today, there are quite a lot of such places. Among them, there are crypto trading signals software for desktop PCs and automatic platforms for working in a browser or cell phone applications.
The Tradingview service has become the most popular: it has a free rate, but with a time limit. The users can choose the signals from a large number of professional tools for analysis and configure them themselves.
CryptoWolf is one of the first services that appeared on the crypto market and its high rates are justified by the frequent signals. Premium subscription users receive several trading signals daily.
Liberman Trading Signals & Tips - Telegram bot for signals. Its main advantage is the absence of monthly subscriptions, traders can pay only for the signals they have used.
CoinMarketAlert - a service that offers traders $15 a month to learn about changes in trading volume, market capitalizations, new coin releases, and altcoin price forecasts 24/7.
Coindera is a platform that has two pricing plans for beginners and advanced users. The first is free but with only 5 signals, the second costs $10 a month and promises 25 active alerts.
Bitcoin Ticker Widget is a crypto trading signals app available on Google Play and the App Store. You can use it to track Bitcoin and Litecoin prices, as well as customize the signals and display options yourself.
Now you know how do crypto signals work. Crypto signals are considered one of the best algorithmic trading tools that help make profits and minimize losses. Thanks to this feature, traders have the opportunity to save time searching for new trading strategies.
Remember a few important things. Before choosing the signal provider, carefully read our article once again. Try to always verify the information you receive, and also use additional sources of market analysis, such as technical and fundamental analysis. In addition, try to never make decisions based on just one crypto signal, and compare different providers to get results.
