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Become A God Of Crypro Trading With The Hammer Pattern

Profiting from the crypto market – Hammer pattern trading

Hammer Candlestick – explained

A hammer is a candlestick price pattern charting that occurs when a cryptocurrency trades significantly lower than its opening but quickly rallies within the candle period to near-opening price. This looks hammer-shaped candlestick, where the lower shadow is at least double the size of the real body. The candlestick body represents the difference between the open and close prices, while the shadow represents the highs and lows within the period.

Reading the Hammer Candlestick

A hammer occurs after a cryptocurrency has been declining, implying that the market is attempting to create a bottom. Hammers signal that sellers might have capitulated.

Hammers are most effective when the least three or more declining candles precede them. A hammer should look somewhat similar to the letter “T.” However, one thing to note is that a hammer candlestick doesn’t indicate a price reversal until it is confirmed.

Confirmation of the hammer pattern occurs if the candle following it closes above the hammer’s closing price. Candlestick traders will mostly look to enter their long positions or exit their short positions during or after the confirmation candle appears. Traders that are entering new long positions can benefit from setting a stop-loss below the low of the hammer’s shadow.

Hammer candle vs. Doji candle

A doji candle is another type of candlestick with a small body. A doji candle signifies indecision as it has both an upper and a lower shadow. Dojis, depending on the variation, may signal a price reversal or a trend continuation. This differs from the hammer candle, which occurs after a price decline and signals a potential upside reversal, and only has a long lower shadow.

Things to consider

As with any technical analysis tool, there is no assurance that the price will do as expected, even after the confirmation of the pattern. A long-shadowed hammer paired with a strong confirmation candle may push the price high for some time due to market instability. This may not be the best spot to buy because the stop-loss is far away from the entry point.
Hammer pattern also doesn’t provide a price target, which makes setting up a profit target quite difficult.

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Master Doji Candlestick Trading! Unlock Your Potential!

Profiting from the crypto market – Doji candle trading

Doji candlesticks

The Doji star, better known as the Doji candlestick, is a unique candle that signals indecision in the crypto market. It shows that neither the crypto bulls nor bears are in control. However, not everything is that simple. The Doji candlestick has five variations. Each one of them shows something different. This is why it’s important to understand how to spot and read different Doji candle variations.

The Doji candlestick is characterized by its cross-like shape. This happens when a cryptocurrency pair opens and closes at the exact same level leaving a very small or even non-existent body while also exhibiting upper and lower wicks of equal length. While Doji mostly represents indecision in the market, it can also indicate a slowing momentum of an existing trend.

Doji candle in technical analysis

The Doji candle can be a very important piece of information as it can provide crypto traders with a moment to stop trading and reflect. However, it is important to consider the Doji candle in conjunction with other tools when timing your market exit point.

Doji candle variations

While the traditional Doji star shows indecisiveness, other variations can have different implications.
The picture on the screen will show different variations of the Doji candlestick, as well as its outcomes.

Trading the Doji candlestick

Traders use various ways to trade various Doji candlestick patterns. However, they all look for signals that complement the Doji candlestick in order to execute high-probability trades.

Trading the Doji star

 

The chart shows the Doji star appearing right at the bottom of an existing downtrend. This Doji pattern suggests that neither bulls nor bears are in control, meaning that a trend reversal is possible. At this point, it is crucial to take a look at supporting signals from other tools and indicators. This example makes use of the stochastic indicator, which is currently in the oversold territory, which adds to the bullish bias.

A popular Doji trading strategy involves looking for Dojis, which appear near support and resistance levels. The chart highlights the Dragonfly Doji, which appeared near trendline support. In this case, the Doji doesn’t appear at the top of the uptrend, so it doesn’t mark a trend reversal. The Dragonfly Doji, in this case, shows the rejection of lower-level prices. This potential bullish signal is further supported by the candle appearing near the trend support.

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Make Crypto Trading Profits Using Forex Techniques – The Three Line Strike!

 

Generate profit trading cryptocurrencies – Three Line Strike

Many traders rely only on indicators, while only a few take into consideration patterns that appear in the market. Even fewer people are spotting small candlestick patterns, which they might think of as insignificant. However, they are far from insignificant.

Three Line Strike

A three-line strike represents a continuation group of candlesticks that is formed by three candlesticks in the direction of a trend, then followed by a final candlestick that pulls back to the starting point.
There are two versions of a three-line strike: Bullish/Bearish

The bullish three line strike consists of three strong bullish candlesticks that close higher than the last one, then followed by a final candle, also known as the strike candle. The strike candle goes in the opposite (bearish) direction and opens at or higher than the third candlestick, but closes below the open of the first candle in the pattern.

A bearish three line strike is everything, but in reverse, three strong descending candles that close progressively lower followed by a bullish strike candlestick. The strike candle opens at or lower than the third candle close and closes above the first candlestick open.

Validating the pattern

To validate this pattern, we need to confirm that the first three candles are at least of average size. They need to have a defined stair-case like appearance in order to be reliable.
A bullish three line strike should be treated as an extension of the three white soldiers pattern, while a bearish three line strike as an extension of the three black crows pattern.

Market Sentiment

The assumption behind the three-line strike amongst traders is that the strike candle shows a temporary correction that will not be prolonged, while the main trend will follow the first three candles. The pullback of the strike candle is a reaction to the strong move to one direction in the first part of the pattern.

Buyers should use the low point of the pattern to create an entry opportunity. Sellers, on the other hand, should use the high point of the pattern to create an opportunity to sell high.

Three Line Strike Reliability

The three-line strike is not a very common pattern in cryptocurrencies. However, it is quite reliable when paired up with volume indicators, and traded with the larger time frame trend. A thing to note is that the bearish three line strike is slightly more reliable than the bullish one when it comes to crypto trading.

While the bearish pattern was accurate over 60% of the time, the bullish one was accurate, only 50% of the time.
Bullish Three Line Strike – Example
The example will show a chart which created a bullish three line strike. The first three candlesticks lined up in a three white soldiers formation, signaling reliability.

A buy signal was confirmed when the low of the strike candle reached below the first candle open.
Bearish Three Line Strike – Example
This example will show a chart that illustrates a bearish three line strike. The high of the strike candle does not reach the open of the first candle, but remains within tolerance levels, and is close enough to be classed as a bearish continuation.

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Master Crypto Trading With The 3 Black Crows Formation!

Profiting from the crypto market – Three Black Crows pattern

Three black crows are a pattern that indicates a bearish reversal of an uptrend. The black crow formation consists of three consecutive candlesticks that each opened within the read body of the previous candle and closed at a lower price than the previous candle. Traders often use this pattern in conjunction with other tools and indicators to confirm a reversal.

Three Black Crows – Explained

Three black crows is a visual pattern, which means that there are no calculations included to create the indicator. This pattern occurs when the bears overtake the bulls during a trending market. It is important to note that the candlesticks should have short to no shadows.
Being a visual pattern, three black crows are best used as a sign to seek further confirmation from other trading tools. The confidence a trader can put into the pattern greatly depends on how well-formed the pattern actually forms. If the shadows are long, it may simply imply that a minor shift in momentum will occur between the bulls and the bears.

Using volume indicators can make the three black crows pattern much more accurate. Volume during the uptrend that leads up to the pattern should be relatively low, while the three candle black crow pattern comes with high volume.

Three Black Crows vs. Three White Soldiers


Three black crows pattern has a complete opposite, which is the three white knights pattern. This pattern looks and acts exactly the same, but is completely reversed. It signals a bear to bull reversal and has three bullish candles instead of bearish ones.

Notable info

If the three black crows pattern formation involves a significant move to the downside, traders should be careful and look for oversold conditions caused by market instability. To mitigate this threat of pattern failure, we have to use an oscillator that can help with confirmation of the market reversal.

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Trading Crypto With The Three White Soldiers Pattern! Making Consistent Money

Profiting from the crypto market – Three White Soldiers pattern

Three white soldiers is a candlestick pattern used to predict current downtrend reversals in a pricing chart. The pattern is made of three long-bodied candlesticks that open within the previous candle’s body and close over the previous candle’s high. The candlesticks should not have long shadows.

The three white soldiers pattern suggests a strong market sentiment change. If a candle is closing with small to no shadows, it suggests that bulls have taken over the price and kept it at the top of the range.

Trading the three white soldiers pattern

As the three white soldiers is a bullish visual pattern, it is mostly used as an entry or exit point. Traders wanting to short a cryptocurrency look to exit, while traders who want to go long on a crypto see three white soldiers as an entry point.

When trading the three white soldiers pattern, make sure to take into consideration that the strong move higher might create temporary overbought conditions. That’s why this pattern should be paired up with oscillators, which may confirm the market reversal.

Three White Soldiers vs. Three Black Crows


The three white soldiers’ opposite pattern is the three black crows pattern. Three black crows have all the same attributes of the three white soldiers but in reverse. It consists of three consecutive candlesticks that open within the real body of the previous candle while closing lower than the previous candlestick. While three white soldiers mark a reversal from bear to the bull trend, three black crows show market reversal from bullish to bearish.

Things to consider

Three white soldiers might also appear during periods of consolidation, rather than during a trend. This is an easy way to fall into a trap, so one should take a good look at the longer time frames before trading Three white soldiers. One of the key things to take note of is the volume that supports the formation of this pattern. Any pattern is susceptible to failing in low volume conditions.

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Master Crypto Trading With The Cup & Handle Formation Part 2!


Make money in Crypto by spotting the Cup and Handle pattern – part 2/2

Picking a Profit Target


Determining the profit target is quite simple with this pattern; all you need to do is add the height of the cup to the point of breakout.
There will be times when the left side of the cup is a slightly different height than the right side. In this case, you should use the smaller height to stay on the conservative side, or the larger height for an aggressive approach.


In addition to using the cup and handle formation, you can use the Fibonacci extension indicator to create a great crypto trading strategy (as seen on the chart). Draw the extension tool from the low of the cup to the high on the right side of the cup. Then, connect the tool down to the handle low. The 1, or 100%, level represents a conservative price target, while the 1.618, or 162%, and represents a very aggressive target. The possible targets can then be placed anywhere in between 1 and 1.618.

Things to consider

Traditionally, the cup has a pause at the bottom of the cup built in the formation, where it moves sideways or forms a rounded bottom. This movement shows that the price found a support level and will not drop below it. However, this pattern can also have a so-called V-bottom.
A V-bottom occurs when the price drops and then sharply rallies. Some traders like trading this form of a cup and handle, while others do not. The argument of V-bottom traders is that the sharp reversal of the downtrend shows that buyers stepped in aggressively, signaling strength. Opponents of the V-bottom say that the price didn’t stabilize before bottoming, therefore making the price unstable and susceptible to retesting the level.
When trading this pattern, always look for additional confirmation. It can be found by looking for the bottom of the cup and seeing if it aligns with a longer-term support level. Consider using indicators and tools to determine the support and resistance levels and check if they align or interfere with the cup and handle targets.

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Trading Crypto Using The Double Top & Bottom Formation

Trading Crypto using Double Top and Bottom patterns

This year has brought many uncertainties in all aspects of the world, especially health and finance. Cryptocurrencies have not been an exception, either. For the past couple of months, the sentiment has changed from very bullish to very bearish. The trend changed as quickly and sharply as the sentiment did. This is why we will cover the patterns which signal a trend reversal, called “double top” and “double bottom.

Double Top pattern

This image represents a double top pattern. After a cryptocurrency’s has trended upward for a while, it will create a top in price. Investors will often close their positions during this pause of the market, thus creating a downward trend in price. Shortly after that, the value rises again, reaching a second top at almost the exact same price as the previous one. These two tops form a double top pattern, which is essentially a test of the market.

The market is tested in terms of whether the price is susceptible to be nudged higher or not. The downward trend after the second top shows that the market does not have enough of a drive to go further up and that it will trend downward again. In a nutshell, the distinct shape of a double top that is quite similar to the letter M represents a bearish move.

Double Bottom pattern

As expected, the double bottom represents everything that the double top represents, but in reverse. Rather than testing the upside of a cryptocurrency, the market testing comes after a downward move and tests if the market is ready to go further down. The double bottom pattern is recognized by the two inverted peaks that are formed at approximately the same price level.

When it happens that the downward trend has been tested twice, and the bottom has been found, then the market will reverse, and the uptrend will start. In a nutshell, the distinct shape of a double bottom that is quite similar to the letter W represents a bullish move.

Additional information

The double top pattern and the double bottom patterns are price reversal indicators. However, there is always the risk that you will encounter a false reversal, meaning that the price movement will play out just the way you want for a very short amount of time, and then do the complete opposite. That’s why it is important to mitigate the risk by doing a couple of things. First, set the stop-loss below the double bottoms or above the double tops. Second, make sure to wait for a candle close in your direction to get a confirmation of the trend reversal. Ultimately, you can pair trading this pattern with candlestick analysis, indicators, and other tools at your disposal.

As the last piece of advice, try to make trades where the double bottom or top will show a trend reversal to a direction of the longer time-frame trend. This way, you will trade alongside the long-term trend, which is much safer than trading against.

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Master Crypto Trading With The Cup & Handle Formation Part1!

Make money in Crypto by spotting the Cup and Handle pattern – part 1/2

Chart patterns occur on charts when the movements of the price of an asset resemble a common shape. In this case, we will be talking about the cup and handle formation. These patterns are a visual tool that helps traders make their market decision. Cup and handle provide a logical entry point, a stop-loss target for managing risk, as well as a price target for exiting a profitable trade.

The Cup and Handle

The cup and handle pattern is a strong tool for both small time frames (such as one-minute charts) and in large time frames. It occurs when the price trends down, then have a stabilizing period, then followed by a rally of approximately equal size to the aforementioned decline. This creates a U-shape, which is the “cup” in the “cup and handle” formation. However, this is only a part of the pattern. The price then moves sideways or goes down within a channel, which forms the handle. The handle can also take the form of a triangle.
An important rule to keep in mind is that the handle should always be smaller than the cup. Ideally, the handle should stay in the upper third of the cup. If it is too deep, it will erase most of the gains of the cup, which makes it quite an unsafe bet when it comes to trading on this pattern.

A cup and handle chart may signal one of two things! A reversal pattern, or A continuation pattern. A cup and handle signals a reversal pattern when the price is in a long-term downtrend. If a cup and handle pattern is formed during that time, it will signal a trend reversal. However, if the cup and handle formation occurs during an uptrend, then the pattern would signal trend continuation.

How to trade the cup and handle pattern
Determining the Entry point

In order to trade this pattern well, wait for a handle to form and the full pattern to play out. The handle often goes sideways, descends, or creates a triangle. The entry point should be when the price breaks above the top of this channel or triangle. As soon as the price moves out of the handle, the pattern should be considered complete. However, you might want to wait for a full candle to form outside of the pattern, so you get a real confirmation of the move, rather than blindly entering a false breakout.

Setting up a Stop-Loss

A stop-loss order is a risk-control measure on the trade. It works by selling the position if the price goes the opposite way and declines enough to invalidate the pattern. The stop-loss should be put below the lowest point of the handle or below the most recent swing low (only if the price oscillated up and down often).

Since the handle occurs within the upper half of the cup, a stop-loss that is properly placed should not end up in the lower half of the cup. If the stop-loss happens to be below the half-way point of the cup, try to avoid the trade if possible. Ideally, the stop-loss should be placed in the upper third of the cup pattern.

Check out part 2 of our Cup and Handle crypto trading guide to learn more about setting profit targets as well as some other important info regarding this candlestick formation.

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Using Pennants Correctly In Crypto Trading! How Is It Different To Forex?

 

Using pennants correctly in Crypto trading – spotting the difference between flags, pennants, and triangles

 

The pennant formation is a formation that looks much like a flag pattern but is triangular in shape. These formations tend to appear at the halfway mark of a trend. When a pennant forms, the trading volume tends to contract, while increasing only after the breakout. To simplify it even further, pennants look like a small triangle sitting on a long pole.

Pennants are a variation of a flag pattern, which means that it is made up of a body and a pole, much like the flag. Just like with the flag pattern, the pole height can be used to create a price target after a five-wave breakout from the body of the formation.
They are associated with very mild volatility alongside limited price fluctuations, which differentiates them from flags and triangles.
Difference between a triangle and a pennant
While pennants are most similar to flag formations, it is quite easy to distinguish one from another. On the other hand, triangles and pennants can be mistaken for one another due to the similarity of the pattern if we are not careful. However, they have some key differences which can be used to determine which one is which.

Difference 1 – the Flagpole

The symmetrical triangle and the pennant both have conical bodies which are formed during a period of consolidation. The price consistently fluctuates between higher lows and lower highs, therefore creating two converging trendlines. However, the part which many people know but tend to miss during a live trading session is that the pennant includes a flagpole at the start of its pattern, which is not the case with the symmetrical triangle. The flagpole is a sharp move accompanied by heavy volume, which marks the beginning of an aggressive move to the upside or downside. Price then pauses and forms the body of the pennant, before breaking out.

Difference 2 – the Duration

Another difference between the symmetrical triangle and the pennant would be the difference in their durations. The pennant is considered a short-term pattern that forms over a period of hours, days, or weeks. A triangle pattern, on the other hand, can take much longer, sometimes months or years. If a pennant pattern lasts for several weeks, it can be considered as a triangle as the flagpole is no longer important.

Difference 3 – the Breakout

The breakout after a pennant formation should occur at or near the point of trendline converging, which is called the apex. However, symmetrical triangles usually break above or below the trendlines a bit sooner, namely one half to three-quarters of the way through the pattern. Therefore, triangles almost never reach its apex.

Using patterns in Crypto trading

Pennants are a universal formation, which means that trading using this formation should be no different than using it to trade other assets. However, due to the volatility of the crypto market, one has to consider the duration of the formation itself. As the crypto market is much more volatile, the pattern formations tend to resolve quicker. Pennant formations, when trading regular assets, are not considered important on extremely short time frames, while that is not the case with the crypto market. They also grow into a triangle only after 12-13 weeks of not breaking out with traditional asset markets, rather than just a few weeks with the crypto market.

Conclusion

Recognizing pennants while trading cryptocurrencies can, just like with any other formations, be an effective way to improve your odds of profiting on a trade by determining the direction of the trend as well as the profit target.

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Maximise Profits By Trading Bull & Bear Flags In Crypto Trading

When it comes to consistently being profitable in crypto trading, the trend is definitely your friend. However, spotting the trend when it still in the early stages is very difficult, while running along with it all the way to the top is even more challenging.

More often than not, trends (both bullish and bearish) will pause their move briefly, which allows traders or investors to join the bandwagon. We saw this pause in many cases during the crypto market uptrends and downtrends. If a lot of new participants join, the asset price continues the trend. If not, we can expect a trend reversal.

Continuation patterns

A trader can use continuation patterns to spot trend extensions. These patterns occur in a variety of shapes, with some of the most popular being known as bull and bear flags.
A bull flag is a pattern that occurs during an uptrend when the price is trying to continue upward. On the other hand, the bear flag occurs in a downtrend when the price wants to go further down.

Each flag pattern has two main components:
The pole and The flag. The “pole” is a part of the pattern that signifies a strong impulsive move, which is backed by a surge in trading volume, as well as by the subsequent pause in the trend, which represents the “flag,” which resembles a falling or rising channel.

The flag pattern has shown to be an invaluable addition to a traders’ toolset. It is mainly used to calculate the target as well as the direction of the move. As an example, if the resistance breaks in a bull flag, we can be confident that the price will continue upwards and set the target to approximately the length of the pole. On the other hand, if the support of the bull flag is breached, we know that the pattern is invalid and that the trend continuation is unlikely.

Calculating the profit target

A cryptocurrency move after a bull flag breakout or bear flag breakdown usually corresponds to the size of the pole of the flag.
Therefore, the profit target is derived like this:
Bull flag breakout equals to the breakout price plus pole hight
Bear flag breakdown equals to from the breakout price minus the pole hight
Pole height equals to the pole high minus the pole low.

Example of the Bull Flag

Let’s take a look at Bitcoin (BTC) on a 6-hour chart, where it presented a bull flag breakout. Bitcoin cleared this particular flag resistance on Feb 20, 2017, which signaled a continuation of the rally. The rally ranged from the $917 (which was the low of the pole) to the possibility to go towards $1,228 (target measured by the pole height method brought us to $157, which was added to breakout price).
In this case, Bitcoin came just $10 shy of the predicted price target on Feb 24, 2017.

Example of the Bear Flag

An example of the bear flag would be Ethereum’s (ETH) 4-hour chart, starting Mar 17, 2018. Ethereum broke the flag support, which suggested the continuation of the depreciation from the $699 pole high. The target would be $463 if we used the pole height method, which got us to the $133, which were then deduced from breakdown price.
As the move confirmed, Ethereum was just $12 shy of reaching the exact target level on Mar 18, 2018.

Summary

Bull and bear flags can be utilized in strongly trending markets to predict the price target of the move. However, they do not always perform as intended. In some cases, they can present a so-called “false breakout,” which occurs when price breaches the boundary of the flag but quickly retraces.
The risk of false breakouts can be mitigated by waiting for a candlestick to close outside of the flag territory.

 

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Make Huge Profits Market Pattern Trading In Crypto (Head and Shoulders, Triangles, Wedges) Part 2/2

 

pattern trading in cryptocurrencies (Head and Shoulders, Triangles, Wedges) – part 2/2

This part of the guide will cover various triangle formations as well as wedges.

Triangles

Triangles come in three formations:
Ascending triangle
Descending triangle
Symmetrical triangle

Ascending triangle

Traders can spot an ascending triangle by the price going up and down between the constant line of resistance and the rising support.
The ascending triangle is widely considered to be a bullish formation, which leads to massive profits if approached the right way.
However, those not careful enough might consider taking a position near the support line in hopes of enhancing their gains, only to end up with a loss as formation didn’t complete, and the price movement turns to be a double or triple top bearish formation.
Targeted prices are measured by the widest distance between the highs and the lows, and applied up from the point of the breakout.
Experienced traders will wait for a confirmation of the upward breakout accompanied by a much bigger volume before taking a position, as breakouts without an increase in volume can catch traders in a bull-trap (as we showed on the chart).

Descending Triangle

A descending triangle is considered a typical bearish formation. For it to form, the price action needs to flow between a steady support line and descending resistance.
The pattern is confirmed only once a downward breakout with increased volume happens. Only then can a trader expect the continuation of the price movement to the downside.
Just like with ascending triangles, the price target is equal to the widest swing inside the triangle transferred from the breakout point to the downside.

One of the most famous descending triangles in cryptocurrencies is the one that formed on the 2018 Bitcoin chart.

Symmetrical triangle

These triangles are probably the most common formations in cryptocurrency trading. However, at the same time, they are the most unpredictable.

As the symmetrical triangle approaches its closure, the trading volume drops as traders are often indecisive about whether the price will unfold to the upside or downside. When the war between the bulls and the bears resolves, we get two outcomes: positive and negative.
Any of these breakout movements will be followed by an increase in volume, which will be even more visible due to the reduced trading volume before the breakout.
Once the breakout happens, traders can expect the target price to be the same distance as the distance between the breakout side and the base of the triangle.

Wedges

Wedges are very common formations in crypto trading as well. They are considered a multiple price wave reversal patterns.
The price action in a wedge swings from highs to lows multiple times before breaking out of the pattern.
Wedge formations come in two forms:

Rising wedges
Falling wedges

Rising wedge

As opposed to the ascending triangle formation, the rising wedge has price swings that travel through highs and lows, but both the highs and lows are getting higher. This formation announces a bullish trend reversal into a strong bearish sentiment.

Falling wedge

The falling wedge formation, on the other hand, looks like a mirror image of the rising wedge and announces a trend reversal from bearish to bullish.

As with other patterns, it is advisable for traders to get the confirmation of the breakout before taking a position.
The minimum targeted price for the falling wedge is the exact opposite of the ascending wedge.

One thing to notice is that, in the cryptocurrency market, peaks do not necessarily follow highs and lows in an exact straight line. They are rather just close enough in the price range to mark the formation.

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Make Huge Profits Market Pattern Trading In Crypto (Head and Shoulders, Triangles, Wedges) Part 1/2

Market pattern trading in cryptocurrencies (Head and Shoulders, Triangles, Wedges) – part 1/2

Finding ways to predict the future price movement of an asset has always been incredibly hard, no matter what asset you are trading. Cryptocurrency trading differs slightly from trading other assets, as it is more volatile, much younger, and susceptible to fear of missing out as well as fear, uncertainty, and doubt.
Although the number of factors that influence the price of a cryptocurrency is almost immeasurable (reaching milestones, partnerships, security breaches, new regulations, etc.), combining this knowledge with the usage of other methods, such as trend detection can be quite profitable.

No matter how volatile the prices of cryptocurrencies may be, at times, experienced traders can spot distinct movement patterns that allow them to predict the direction of the price movement. This guide will explain the fundamentals of three patterns that traders look for when trading crypto on various exchanges.

Head and shoulders pattern

The head and shoulders pattern is a price formation that, to an inexperienced trader, look like a baseline with three peaks and nothing more.
However, if we spot that the middle peak is higher than the other two, which are similar in size, we can deduce that it is, in fact, the head and shoulders pattern.

In technical analysis, a head and shoulders pattern is a sign of bullish-to-bearish trend reversal. It is regarded as one of the most reliable, if not the most reliable trend reversal patterns.
As the cryptocurrency market is extremely volatile and bulls and bears constantly switch in terms of market dominance, the head and shoulders pattern would appear after the market has been dominated by bulls.

After the first price stagnation (which is the Shoulder 1), and the price reaches a new high (which is the head), it still may be possible that the pattern will not form and that the bulls will push the price even higher. However, after the price goes down for the second time, bulls often try to push it up again (which is the Shoulder 2). If they don’t succeed and the price stops at the price level similar to the one of Shoulder 1, it becomes evident that bears are taking over the market.

The target price in this reversal is equal to the distance from the neckline to the peak of the head but in the opposite direction.
When deciding whether to trade the head and shoulders pattern, traders should not just assume that the pattern is going to play out. Instead, they should be patient and wait for the decline after the right peak to reach the neckline. Only then can they think of taking a position.
Reversed head and shoulders
Traders should also look for the reversed head and shoulders pattern, which plays out the same way a regular one does, but in the opposite direction. This pattern marks the end of the bear season.

Check out part 2 of our pattern trading guide, where we will cover various triangle formations as well as wedges.

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Master Trading Cryptocurrencies Using The RSI Indicator

Trading cryptocurrencies using RSI indicator

RSI, which is an acronym for the Relative Strength Index, is one of the most popular technical indicators used in the analysis of any financial markets. It is often used for cryptocurrency trading as well.

It was created in 1978 in John Welles Wilder’s book that carries the name “New concepts in technical trading systems.” Wilder was a former mechanical engineer who abandoned his job in order to focus on the financial markets.
He wanted to create indicators based on mathematical analysis by finding a simple yet effective tool to visually represent market movements. The RSI indicator is what came from his research, and this indicator is one of the most widely used indicators to date.

RSI indicator – explained

This indicator is based on quite a simple concept. The stronger the relative price, the greater the market’s upward closures compared to the market’s downward closures. The opposite is also true.

RSI is considered an oscillator that is used for measuring the speed as well as the direction of price movements. That’s why it is also a “momentum” indicator. Contrary to some other indicators, RSI manages to overcome the momentum-related problems that can occur when abrupt movements of the market cause a sudden reversal of the trend.
RSI uses a band of oscillation that ranges from 0 to 100. It also allows for visual comparison with predetermined constant levels. It is based on a simple mathematical formula that requires only one input parameter, which is the number of periods that we are taking into consideration.
In his book, Wilder recommended that 14 should be used to get the best results.
As with all the other oscillators, if a short time-period is used, the sensitivity of the oscillator might be too great, and traders may get false signals.

Using RSI in crypto trading

Trading cryptocurrencies using RSI is not much different than trading any other asset. When the price moves up quickly, the RSI indicator will enter the “overbought” area. The opposite is also true.
It is important to say that the longer the time frame used, the more accurate the data is. Bitcoin has almost never had a false signal on the higher time frames.
Wilder designed this indicator with the aim to spot reversals. RSI will show alert zones set at 70 for overbought and by the value 30 for oversold. However, it is not uncommon to see zones moved to values 80 and 20.
A cryptocurrency trader, this indicator should NOT be used by itself, but rather alongside using the knowledge of candlestick and pattern analysis as well as some other indicators.

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Using Bollinger Bands To Capture Consistent Profits Part 2

Trading cryptocurrencies using Bollinger Bands (part 2/2)

 


The rules of Bollinger Bands

John Bollinger is still quite active in the financial space, while his bands have 30 years of market testing. The first thing that Bollinger makes clear is that both highs and lows are relative. While the upper band signifies highs as they relate to the standard deviation, the lower band does the opposite. The terms “high” and “low” have to be used in a relative sense. This relativity can be derived from a variety of different indicators.
Bollinger stressed that each indicator has to be viewed in isolation before trying to use it in conjunction with something. Momentum, volume, sentiment, as well as many more things can be derived from Bollinger bands; however, they might not necessarily relate to one another.
He once said: “For example, a momentum indicator might complement a volume indicator successfully, but two momentum indicators aren’t better than one.”

Bollinger bands have proven to be a successful indicator if employed in a wide range of financial settings since they are simple by nature. They are made for trading equities, indices, exchanges, commodities, as well as futures. Cryptocurrencies were not there when this indicator was made, but they fit the space between the gray areas of these financial tools.
Bollinger Bands and are also flexible with regard to the time period, as long as the period that is examined contains enough details to present a meaningful view of the market.

How to use Bollinger Bands

Cryptocurrency traders, as well as investors, can use Bollinger Bands in several different ways.
The first we have to look at is the volatility of a given coin we are trading. Bollinger bands compress when standard deviations are low, which is signaling us a period of low volatility. They tend to do the opposite when volatility increases.

While this can have several meanings depending on the coin we are trading. We can look at the volatility and try to pinpoint the possibility of a breakout.
Bollinger Bands capture somewhere around 90% of the price action in a given cryptocurrency. When the price movement dives above or below a set Bollinger Band, we have to pay attention. When the price moves above the band, the coin is likely overbought, and it is possible that it will correct shortly. If, on the other hand, a price moves below the lower Bollinger Band, the coin is possibly oversold.

Movements at the Bollinger Band boundaries (upper or lower) can also be used to determine short-term price direction. If the upper band is cracked, but the price corrects to a level just at or below the upper band afterward, it’s a sign that the prices are generally moving up. The opposite is also true.

Conclusion

Bollinger bands present an easy way to visualize the cryptocurrency market price movement. In simplest terms, it shows when it is a good idea to buy or sell an asset.
However, Bollinger Bands are simply one of the many tools in a trader’s toolkit, which means that the rules are not written in stone. To confirm their decisions based on Bollinger Bands, many traders are relying on volume indicators or oscillators such as RSI or MACD before entering a position. Independently confirming trends by using other tools rather than only using the Bollinger Band system is more reliable than using just Bollinger Bands to come to a certain conclusion

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Using Bollinger Bands To Capture Consistent Profits Part 1

 

Intro to using Bollinger Bands in cryptocurrencies (part 1/2)

The wild movements of a typical cryptocurrency price chart can definitely look bewildering at first glance. While it is easy to see the general direction of a trend for any given crypto, the confusion really sets in if you zoom in to a smaller time frame and take a look at all the peaks and troughs that actually make up that trend line.

Intro to Bollinger Bands


Simple moving averages are used to describe the average price of an asset over a period of time while using exponential moving averages will give more credence as well as arithmetic weight to newer prices. Both of them are intended to filter out the hourly and daily bumps that make up a price chart. They are also making trends as well as patterns more immediately obvious.

The system of using moving averages was further refined by a financial analyst as well as author John Bollinger in the 1980s. He introduced Bollinger Bands to the world. Bollinger bands are nothing more than a system of computing bands (high and low) above an asset’s moving average by using standard deviation.

Bollinger bands are also being used to examine exponential moving averages, unlike the Keltner channel’s examination of simple moving averages. The way Bollinger Bands are used provides the measurement tool with much more sensitivity to certain changes in the market.
Bollinger Bands and Crypto

When speaking about the notoriously volatile cryptocurrency market, Bollinger Bands are used quite a lot. They are mostly used in predicting possible breakouts as well as identifying key times to enter or exit the market. This use-case is particularly useful for day traders (rather than long-term investors), who often have to make quick and tough calls with incomplete information so they could retain their profits. If they make only one significant step in the wrong direction on just one cryptocurrency, they can eliminate days or even weeks of carefully harvested small gains.

More on how to use Bollinger Bands to improve your cryptocurrency technical analysis in part 2 of our guide.

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CNBC Is Always Wrong About Crypto – The Laughing Stock That Became A Indicator For Winning Trades!

Is CNBC always wrong about crypto? The CNBC reverse indicator!

Media has been covering cryptocurrencies in-depth for a couple of years now, with many crypto analysts, enthusiasts, and non-believers appearing on air. However, one channel stands out if we talk about cryptocurrency analysis and reports, and that is CNBC.

Bears, bulls, and CNBC

Jacob Canfield, a cryptocurrency analyst, and trader, noted how various tweets that CNBC posted and that is about Bitcoin going up or down coincided with exactly the opposite price movement. He posted his research in a submission on a popular website TradingView.

Canfield said that “Almost every single CNBC bullish tweet we’ve seen has been at the top of almost every single rally, giving traders a very strong sell signal. On the other hand, with every bearish tweet CBNC posts, it has been a clear tell of a short reversal as well as the end of a rally”.
As previously mentioned, CNBC is one of the most vocal mainstream outlets regarding Bitcoin and cryptocurrency in general, featuring daily price movement coverage as well as events regarding crypto. It has dedicated hosts that include the investment manager Brian Kelly.

CNBC reverse indicator

Based on the history of the posts, Canfield says, CNBC can be used as a reverse indicator. When used in such a manner, it had around 95 percent accuracy at the time the research was posted.
Canfield continued his analysis by saying: “With every bearish tweet CNBC posts, we typically see a 30% return on average.” If we pair this indicator with a few more indicators, we can create a pretty good strategy that covers price action, volume as well as market sentiment.
Based on this 30% average return expectation, the CNBC reverse indicator is an amazing indicator to use when gauging market sentiment and when to think about long or short positions. This indicator held up well over time as the CNBC news is showing almost the same levels of inaccuracy as they showed at the time of posting this analysis.

Following the post, the CNBC television reportedly contacted Jacob Canfield and invited him to be a guest at one of its crypto-related news segments.

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Crazy Crypto Profits Using The Ichimoku Cloud Indicator – part 2

Trading crypto using Ichimoku Cloud – part 2/2

Market structures that suit the Ichimoku Cloud

Ichimoku Cloud is mostly useful in trending markets. It won’t perform well or produce much relevant info in ranging markets. When the market is ranging, the cloud will constantly be swapping between red and green, yielding very little valuable information. The same will happen on short time frames, which is why Ichimoku Cloud shouldn’t be used on these.
Ichimoku cloud strategies that involve other indicators.

There quite a lot of trading strategies that involve Ichimoku Cloud. However, the important thing to understand is that, even in trending crypto markets, Ichimoku Cloud is almost never used alone. Typically, traders will combine it with other indicators.
Indicators that pair well with the Ichimoku Cloud should provide some way of identifying support-resistance levels based on the asset volume. Using a volume-based indicator alongside Ichimoku is beneficial because the cloud takes price action cycles into consideration while disregarding volume completely.
Popular indicators to use with Ichimoku in cryptocurrency trading
Volume
StochRSI, MACD or any other momentum oscillators
Fibonacci retracements
Bollinger Bands

Ichimoku Cloud cryptocurrency settings


Many people ask if they should use alternative settings for Ichimoku Cloud for trading cryptocurrency markets.

Ichimoku Cloud works with timely moving averages, so with crypto trading, it follows reason to set timespans considering the fact that cryptocurrencies are being traded 24/7/365.
While the traditional Ichimoku cloud settings are (9, 26, 52, 26):
9 would represent a week and a half of regular trading
26 is the number of trading days in a typical month (30 minus 4 Sundays)
52 represents two months of trading days
Traders should create a special Ichimoku Cloud setting for cryptocurrencies as the market is open 24/7 (20, 30, 120, 60):
7+3.5 = 10 (due to the low volume on Sunday), or double that for longer-term trend capture
30 days in a month rather than 26
2 trading months in crypto are 60 days instead of 52 days

However, some traders reject this special Ichimoku Cloud crypto setting. Their reasoning behind that is that the cloud period lengths are meant to capture a certain time period and that it doesn’t matter whether it represents a week. This opinion is less popular as it seems a bit ignorant to disregard the day of the week movements and how certain days influence the market.

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The Fear & Greed Index Indicator! The Best Way To Identify Crypto Market Reversals part 2!

Trade cryptocurrencies using Fear and Greed Index – part 2/2

How to use the Fear and Greed Index to predict market reversals!

The Fear and Greed Index tends to reverse when it approaches “Extreme Fear” territory, while it is a bit less reliable when it approaches “Extreme Greed”. The “Extreme Fear” is the moment when fear transitions into very early and slight signs of greed. At that point, it reverses to the upside directly into greed territory, as opportunists start putting their money into the market.
If people feel greedier towards Bitcoin reversals when the market sentiment is at extremely fearful levels, will Bitcoin’s price follow to the upside?

The reversal points have plotted analogously to the BTC/USD’s price chart on the Fear & Greed Index.

Extreme Fear” levels on the Fear and Greed Index have always resulted in upswings and bullish reversals in Bitcoin’s price. Every time the Fear and Greed Index reached near-extreme levels of fear, a price reversal in Bitcoin’s price came. Extreme fear towards Bitcoin (and most top cryptos) has historically translated into a financial opportunity for the ones that decide to invest.

One big reversal was the mid-December of 2018 when the fear was extreme. At that point, Bitcoin bottomed at $3,200 before starting its new upswing.

Conclusion

The Fear and Greed Index is a great indicator to use when predicting when a bottom has formed on the Bitcoin chart. It surely is a great additional indicator that can show where and when a rally could approximately occur.
Although it won’t tell us exactly at which specific price point a reversal will happen, the Fear and Greed Index is certainly a valuable tool when it comes to timing a shift in market sentiment.
If history is a good teacher (and history does repeat itself), it is likely that people’s feelings towards Bitcoin are shifting dramatically sooner rather than later.

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The Fear & Greed Index Indicator! The Best Way To Identify Crypto Market Reversals?

Trade cryptocurrencies using Fear and Greed Index – part 1/2

 

It’s a well-known fact that emotions move markets. Greed drives prices up, while fear drives them down. Human psychology always ends up being predictably irrational because a lot of people tend to react very similarly in certain situations.

If people behave almost the same way in certain situations, it is possible to make money trading by just being a contrarian. As an example, Baron Rothschild made his fortune by buying when others panic-sold. His philosophy was relying on “Buying when there’s blood in the streets.”
John Templeton once said to “Invest at the point of maximum pessimism.”
This rings true simply because – the greater the fear — the larger the opportunity for profit.

The Fear and Greed Index

If we conclude that a trader can be profitable by acting contrary to how others are acting, then it is important to pinpoint moments of fear as well as moments of greed.

This strategy is quite simple:
If others are greedy – be fearful.
If others are fearful – be greedy.
One well-known tool that measures cryptocurrency market sentiment is the Fear and Greed Index.

The Fear and Greed Index measures cryptocurrency market sentiment by aggregating data from various sources and generating them into one number, which is on a scale of 0 to 100. A value of 0 is known as “Extreme Fear,” while the opposite (a value of 100) represents “Extreme Greed.”

The data that the index uses is compiled daily. You can also glean the data of the Fear and Greed Index on a daily, weekly, monthly, as well as yearly basis.


Tendencies that show in the Fear & Greed Index

Extreme fear is a place where the first signs of greed are created. As we can see from the graph above, fear can quickly spiral out of control. However, every time the Fear and Greed Index is close to or below the 10 mark, the value of the index quickly reverses to the upside.
This brings us to the conclusion that every time high levels of fear dwells in the minds of traders and investors, opportunists use this market climate to their advantage. Following the ways of savvy investors such as Warren Buffet, Baron Rothschild, or John Templeton, these “bargain hunters” get greedy when others were fearful.
However, just like fear can quickly gain momentum, so can greed. And since emotions move markets, extreme fear drives prices down, while greed drives them up.

Check out part 2 of our Fear and Greed Index guide to learn more about how to use this tool to predict market movement.

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Crypto Lending The Superior Way Of HODLing Part 5 OF 5

Crypto Lending – A word to the lenders (part 5/5)

There are many great lending platforms that can offer great returns and make this way of investing far superior to just regular holding. However, the old saying still remains true: if you are not the owner of your private keys, you are not the owner of your cryptocurrencies.
This saying holds true for crypto lending platforms as well. The concept of lending cryptocurrencies is more than outstanding and will surely flourish. However, one must first worry about security rather than be hyped up about potential gains.


A platform might have the best crypto interest rates but fail in some other departments, such as the safety and security of the customers’ assets.

In January 2018, a cryptocurrency lending platform called Davor Coin made an announcement: “Lend us your funds, and you’ll have the chance to win a prize of $1,000,000.” People from all around the globe got overly excited and started lending their money to Davor Coin. Just a week later, the platform received a cease-and-desist letter from the state of Texas.
Davor Coin’s lending platform scheme worked only as long as values kept rising. However, when cryptocurrency values went down, Davor Coin crashed. The platforms such as this one that did not crash were fined by the SEC or given a cease-and-desist letter from the same SEC regulators, which meant they were under investigation for securities fraud.

Bitconnect is yet another great example of such platforms, as is Lendconnect. Both of these companies offered a RoI that was ‘too good to be true’; they indeed were too good to be true. These ‘great opportunities’ are also called Ponzi schemes.

Bitconnect offered a 1% return per day compounded. This certainly couldn’t go on forever. Lendconnect went even further and offered up to a 164% return on investment! What’s shocking is not the attempts of scams such as these, but the number of people that fell for it.

Crypto Lending – What does the future hold?


As they say, money makes the world go round. The same goes for cryptocurrencies as well. It’s evident that some cryptocurrencies are slowly but surely transitioning into crypto assets.
To learn the basics about how to earn interest in Bitcoin and other cryptocurrencies is getting simpler and easier by the day. As soon as these lending platforms find their audience as well as their place on the market, we will witness so far unseen financial tools working together to open the world of finance to everyone, including the unbanked.
Lending your cryptocurrencies is becoming safer, easier, and an overall great way to earn passive income. However, for more safety and better returns, you will have to stick to the best and safest crypto lending platforms that offer good crypto interest rates while still being insured for your safety.

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Crypto Lending The Superior Way Of HODLing Part 4 OF 5

 

Crypto Lending – Stay away from these platforms (part 4/5)


Not all crypto lending platforms are created equal. While it may be nice to earn interest on your cryptocurrency holdings, it’s not that nice to lose them or get them stolen somehow. While most people invest in cryptocurrencies to earn a profit, not many pay enough attention to the security of their holdings.

This part of the Crypto Lending guide will show two lending platforms that people should consider avoiding. This, of course, does not mean they are unusable. However, these lending platforms have critical flaws that might impact your holdings in a bad way.

XCOINS is a company founded in August 2018 by Sergey Nikitin. Nikitin decided to leverage PayPal and make this operation work. XCOINS lenders allow people to borrow their BTC funds; in return, they get monthly PayPal payments at various predetermined interest levels.
The main problem here is that XCOINS uses PayPal. This makes a lot of room for scams due to how PayPal operates in this domain. Someone can use XCOINS to borrow your BTC, go to PayPal and claim they never got it, and then file a payment reversal with PayPal, which will almost guarantee their funds back.
XCOINS explicitly announced that, in this case, there is no help or support whatsoever from XCOINS. Solely for this reason, XCOINS is a walking red flag when it comes to lending. On top of that, the platform is not exactly the best when it comes to good interest rates on crypto lending.

Salt lending platform made the news for being the first and only crypto lending site of that time. The company was founded in March 2016 by Shawn Owen. It quickly gained much popularity through its ICO. However, while their ICO promised many things (such as loans in many US states where there is no legal ability for SALT to provide such services), they never came through.
Ever since the public saw that many promises did not come to fruition, the project started experiencing more and more speed bumps. They have been under investigation by the US SEC for not declaring their ICO as security. This is not only a problem for the owners, as it can lead to the freezing all of their users’ assets. While they are working on this, the SEC pointed out to many red flags. On top of that, the founder and CEO Shawn Owens has stepped down from his position.
If we compound all this information, we can clearly see that SALT is currently far off from being a safe lending platform.

Check out the fifth (and last) part of our Cryptocurrency Lending series, where we will talk about various scams as well as about what cryptocurrency lending platforms could bring us in the future.

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Crypto Lending The Superior Way Of HODLing Part 3 OF 5

Crypto Lending – Where to lend your crypto? (part 3/5)

This part of the Crypto Lending guide will cover Celsius Network, the third and last platform that we will show as good example of how a lending platform should operate.


Celsius Network – explained
Celsius Network is a company founded in 2018 by Alex Mashinsky. Mashinsky was one of the inventors and patent holders of the VOIP technology. He also holds numerous entrepreneurship awards. Forbes put Celsius Network in their Top10 companies to “watch for” in 2018, noting that the platform “is primed to disrupt traditional banking.”

Advantages of Celsius Network

When it comes to pros of Celsius Network, there are many. First off, users of the platform are allowed to deposit as well as hold their BTC, ETH, as well as several other top 10 cryptocurrencies. There are no fees whatsoever. This means no withdrawal fees, no transaction fees, no deposit fees, no early termination fees, even no origination fees. On top of that, there is no minimum deposit. Celsius accepts funds of any size, and they will never lock up the funds. You can withdraw anytime, whether it is because of an emergency, a better financial opportunity popping up or any other reason.

Celsius Network’s wallet is provided by BitGo (just like for Nexo). BitGo is the leader in using multi-sig encryption technology. Celsius lenders and borrowers are safely insured for up to $100,000,000.00 by Lloyd’s bank in case of a hack or bankruptcy. As with Nexo, this amount is for the company, not for each person.
When it comes to payouts, Celsius Network has weekly payouts for the interest earned. The platform also has great earning interest rates. Its interest rate is somewhere around 8% of interest earned on deposits of USDC, TUSD and GUSD. When it comes to the interest rates for deposits of ETH, BTC and some other cryptocurrencies, they are quite competitive as well, but not as good as the ones previously mentioned. Celsius Network also has rates of up to 10% if you accept to be paid interest with CEL tokens – their native cryptocurrency.

Disadvantages of Celsius Network

When it comes to cons, there are two noticeable ones. Celsius Network’s native token, CEL, has been suspended for the US customers. This means that the US customers can’t benefit from the 10% interest rate.

The other con is regarding their user experience. Celsius Network is only available via a mobile app. Its user experience is far worse than the user experience that its competitors provide.

Check out part 4 of our Cryptocurrency Lending series, where we will cover lending platforms that we do not recommend and explain why.

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Crypto Lending The Superior Way Of HODLing Part 2 OF 5

Crypto Lending – Where to lend your crypto? (part 2/5)

 

This part of the Crypto Lending guide will cover Nexo and BlockFi, two of the three platforms that we will show as good examples of how a lending platform should operate.

Nexo is a company founded in 2017 and is backed by Michael Arrington, the founder of TechCrunch. It has nearly 200,000 customers and even got covered by Forbes. The platform has back payments in 45 Fiat currencies.
Nexo Wallets are provided by BitGo. Therefore, users who borrow or lend Bitcoin or any other cryptocurrency are insured for up to $100,000,000.00. The insurance is backed by Lloyd’s bank. This amount is, however, for the total company in case it gets hacked or goes bankrupt. NEX allows its lenders to have their earnings deposited every single day, rather than having to wait for a week, month or more. They have an interest rate of 8%, with the option to withdraw anytime.

When it comes to user experience, they are top-notch. On top of that, this company constantly strives to get better and makes new beneficial partnerships quite often. When it comes to cons, there aren’t many. However, one comes to mind. Even though borrowers can withdraw in any of the supported 45+ fiat currencies, lenders are allowed to deposit only stablecoins and fiat currencies. Nexo is currently working on supporting BTC and ETH deposits, but they didn’t make any projection regarding the time of realization of this project.

BlockFi is a company founded by Zac Prince and Flori Marquez. It has raised over $20 million of capital from various firms. The company is young and growing at a fast pace. The company offers a 6.2% interest rate on BTC lending and 3.3% on ETH lending, compounded. Granted, this rate is only for deposits under 10 BTC and 100 ETH. The rates for larger amounts of crypto drop severely. When it comes to borrowers, they get a 4.5% interest rate by using the platform.

There is no minimum deposit, and all your crypto holdings are stored with Gemini. Gemini acts as a 3rd party depository trust that is a licensed custodian with insurance. It has a perfect track record when it comes to preventing hacks and fund losses.

When it comes to cons, there are a couple we can think of. The first one only applies to people that want to lend larger amounts of crypto. BlockFi offers digressive interest rates, meaning that the rates decrease to 2.2% and 0.2% for deposits larger than 10 BTC and 100 ETH. BlockFi also offers fewer choices of cryptocurrencies people can earn interest on as it supports only BTC, ETH, and GUSD. The last con would be that the platform is not FDIC insured (though Gemini – which protects BlockFi user’s assets – has a strong track record for security).

Check out part 3 of our Cryptocurrency Lending series, where we will cover Celsius Network as the third good option for crypto lending.

 

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Crypto Lending The Superior Way Of HODLing Part 1 OF 5

Crypto Lending – the superior way of HODLing cryptocurrency (part 1/5)

 


Bitcoin (and cryptocurrency in general) loans are quickly becoming a hot topic. Crypto lending sites and crypto-backed loans are becoming a new way for the investors, hedge funds, miners, and even the unbanked to utilize and leverage their finances as well as to support their business ideas. The HODLers with their crypto bags can also earn interest on their holdings and gain more financial freedom through earning passive income.

The concept is actually quite simple:

For borrowers: If you need a loan to support your business idea or some other endeavor, you will have to put up a small amount of crypto as collateral. After that, you can get a fiat or a stablecoin to use. You will have to pay back the loan according to the agreement.
For lenders: If you want to lend cryptocurrency, you will put up a certain amount of crypto and earn a predetermined amount of interest from it.
From what we have established, we can see that lending crypto is a great way of utilizing funds when you want to hold rather than trade or sell. However, lending cryptocurrencies doesn’t come without risks. If a bank fails, a chunk of their customer’s funds is insured by the government. If it happens that they go down, their customers are at least partially safe. However, what happens with crypto lending platforms and their insurance? You need to consider things such as safety and insurance policy alongside the things you would usually look for in a lending platform (more talk on that later on in the series).

Crypto lending – introduction

Certain studies have shown that when you have passive income, your stress and anxiety levels are greatly reduced. You also spend more time with friends and family, and you are freer to pursue hobbies and interests.

This 5 part series will cover:
What is Bitcoin lending, and why you should take advantage of the best Bitcoin lending sites to earn passive income

What to look for in a lending platform (We will be covering Nexo, BlockFi and Celsius Network)
What NOT to look for in a lending platform (We will be covering XCOINS and SALT)
Security and insurance policy and the importance of these factors.

Check out part 2 of the Crypto Lending series, where we will talk about Nexo and BlockFI, their advantages and disadvantages, and why they are good lending platforms in general.

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How To Trade Cryptocurrencies Using The MACD Indicator Part 1

Trading cryptocurrencies using the MACD indicator – part 1/2

While there are many technical indicators that can help with identifying changes in the strength, momentum, or the duration of a trend, none of them are simpler than the Moving Average Convergence Divergence, better known as MACD.

By definition, the MACD indicator turns two moving averages into a momentum oscillator. It does so by subtracting the longer period moving average from the shorter period moving average.
As the MACD indicator is a “lagging” or a “trend following” indicator, it actually trails pricing events that already took place in order to determine the strength of the current trend.
As with most indicators, though, you won’t make money just by understanding the indicator works, but rather by knowing how to use this indicator. However, it is still worth explaining what MACD is, so you have a better understanding of why it is such a widely used and loved indicator.

What is MACD

MACD is composed of three main components: the MACD line (which is the blue oscillator), the signal line (which is the orange oscillator), and the histogram.

MACD line is typically made up of the 12-period exponential moving average (EMA) minus the 26-period exponential moving average.
The signal line is typically the 9-period EMA of the MACD line.
The histogram represents the difference between the MACD line and the signal line.

How to interpret the MACD indicator
It might be hard to explain how MACD works, but it is actually one of the easiest indicators to interpret as everything is represented clearly and visually.

The MACD Cross

When the MACD line performs a cross above the signal line, it is interpreted by the traders as a bullish cross. On the other hand, when the MACD line crosses under, traders know that this is a bearish cross. These crosses indicate a shift in momentum, which can represent a buy or sell opportunity.

BTC/USD example

As seen in the picture, MACD crosses provide confirmation of a trend change. This is true, at least in the short term.

As an example, the MACD line crossed above the signal line on November 16, 2017, presenting a buy signal. The MACD line stayed above the signal line for over a month, which resulted in the price increasing more than 150% before the next bearish cross. The bear cross, which occurred on December 20, 2017, signaled a change of trend to bearish.

It’s recommended (and almost necessary) to use the MACD indicator in conjunction with some other indicators such as volume or RSI because MACD, just like any other indicator, is not 100% accurate and can give off false signals.
Check out part 2 of Trading cryptocurrencies using the MACD indicator to learn more about how this indicator shows overbought and oversold market conditions as well as about what zero-line represents.

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The God Formula! How To Make Money In Crypto Using Fibonacci Part 2

How to make money in crypto using Fibonacci retracements – part 2/2

What do Fibonacci levels represent?

The Fibonacci levels used within crypto trading are 23.6%, 38.2%, 50%, 61.8%, and 100%. They represent psychological barriers that repeatedly show up within the crypto markets.
Another interesting aspect of Fibonacci levels is (as with many indicators), the fact that they become more accurate with more people using and respecting them. This falls under the “self-fulfilling prophecy” paradigm.

How to use Fib retracements

The Fibonacci retracement levels consist of horizontal lines that highlight areas of expected support and resistance. To create these Fib levels, you’ll need to draw a line between the lowest and the highest price of a particular trading cycle.
It’s up to the trader to choose whether they will use wicks or candles.


Fib retracements are a very popular tool amongst technical traders, as it allows them to identify levels where they can place their entry or exit points. More times than not, the market tends to struggle near these Fib levels.
Whether it is nature or a self-fulfilling prophecy, these levels do seem to work, and there are many traders that utilize Fib levels to profit in the volatile crypto market.
One thing to note is that you will never know how far the price will retrace exactly. This means that you can’t predict which Fib level the price will respect. That’s why it’s better to carefully watch the markets and wait for a level reaction before entering a position.
Can Fibonacci retracements be used with other indicators and tools?
Yes, they can. In fact, it’s highly recommended to use Fib retracements with some other indicators. If other tools and indicators overlap with the results of the Fibonacci retracement levels, the expected result is that much more realistic.

An example of using Fib retracements

Fibonacci retracement levels are very efficient when it comes to predicting a bounce off of a big red candle, upon the completion of a quick rally. These (fairly) quick trades can generate some good profit if timed properly.

Conclusion

Many traders use the Fibonacci retracements to decide where to set their buy orders. However, most of these traders use indicators such as volume and some momentum indicators alongside Fib retracements to increase the overall security of their decision.

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How To Make Money In Crypto Using Fibonacci Part 1

How to make money in crypto using Fibonacci retracements – part 1/2

The Fibonacci retracement level tool is one of the most popular and most effective tools in crypto trading (and trading in general). This tool is associated with helping traders determine the key levels to place buy and sell orders.
Traders who properly know how to utilize this tool can determine crucial levels of support and resistance with ease. However, to fully understand how and why this tool works, we have to go over how the Fib retracement tool has been created.

About Fibonacci


Leonardo Bonacci, widely known as Fibonacci, was an Italian mathematician born in 1170. Besides being a brilliant mathematician, Leonardo was also an avid traveler.
While traveling, he discovered a Hindu-Arabic numerical system that he explored. He saw that this system had some advantages over the current European system (at that time).
Bonacci published a book called “Liber Abaci.” The book included examples on how to use these calculations in every day uses such as bookkeeping, weight and measurement conversions, and human interest calculations, among other things.

Fibonacci Levels

An interesting proposal within Bonacci’s book was based on an observation of how the population of rabbits grew in ideal conditions. The solution to the rabbit problem was found within a mathematical sequence, which we now know as Fibonacci numbers.
What’s even more strange is that this was not the first time that this sequence of numbers was recorded. In fact, there were many more.
The ratio of numbers, which we know today as the Golden Ratio, was discovered by a Greek architect called Phidias between the years of 500BC and 432BC.
So, why are these levels important in trading?
The history and the research of many people showed that the Fibonacci sequence is found all over the geometry of nature. This sequence can be found in things like animal skin, DNA structure even spirals within a seashell.


Most financial markets (and the cryptocurrency market is no exception) will reveal this Golden Ratio on its time and price periods, where a retracement of 61.8% is typically found after a 100% gain or loss.

Conclusion

So to sum it up, Fibonacci retracement levels are referring to simple areas of support and resistance, and that is derived from the way nature works. These retracement levels are often used by traders to determine how much a move to one side will retrace once it stops. This way, they can have a better grasp on support and resistance levels as well as possible entry and exit points.

Check out part 2 of making money using Fibonacci retracements to see examples of how these levels work in real trading.

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Trading Forex & Crypto With The Golden & Death Cross – Don’t miss These Indicators!

How to make money in crypto by utilizing Golden and Death cross

Whether you want to use them or not, you will need to understand how moving averages work in order to understand some more advanced indicators. However, trading by using only moving averages is not uncommon and can be extremely profitable. Today, we will be talking about the Golden cross and the Death cross. These two occurrences are quite rare but powerful signals that traders are looking for.
They occur when the short-term and long-term moving averages cross. When the cross is to the upside, we are talking about the Golden cross. If the cross is to the downside, it’s called the Death cross.

Both Golden and Death crosses have predicted some of the worst economic downturns of the 20th century. As an example, the Death cross predicted bear markets in 1929, 1938, 1974, and 2008. When talking about cryptos, they are very popular as they underscore the strength and potency of the primary trend. This, in turn, enables traders to navigate the chaos that is the crypto market.

Golden cross

The Golden cross is an event that occurs when a short-term moving average crosses over a long-term moving average to the upside. This occurrence signals to traders that they can expect a strong bullish move.
There are two main requirements for a golden cross to be a good indicator of a move:
It has to spell an end to a sharp downtrend due to seller exhaustion.

The short-term moving average has to rise above the long-term moving average (traders typically use the 50-period for short and 100-period or 200-period for long moving averages).
As seen on the picture and highlighted in green, a Golden cross occurred on the daily BTC chart in March 2019, signaling a strong move to the upside and away from the low of $3,122.
Starting March 12, 2019, BTC price rose by as much as 260%, from $3,859 all the way up to near $14,000 on June 26.
The Golden cross is more accurate when analyzing long time frames.

Death cross

The death cross is the complete opposite of the Golden cross. This occurrence has two main requirements for it to be a true Death cross:
A death cross is created as an end to a bull trend due to long-term buyer exhaustion.
It shows up when the short-term moving average crosses beneath a long-term moving average (traders typically use the 50-period for short and 100-period or 200-period for long moving averages).
As seen in the picture, BTC showed greater bearish conditions on March 30, 2018, as the 50-day moving average crossed below the 200-day moving average. Following this Death cross came a 54% decline in value, namely from $6,850 all the way down to the bottom of $3,122 by December 15.
The Death cross is best identified when looking at longer time frames (just like the Golden cross).

Conclusion

Golden and Death crosses are great ways to determine trend changes on larger time frames. However, as with all indicators, they’re not always perfect. However, they are respected by the traders and, therefore, very valuable in the crypto trading community.

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Hedging Your Cryptocurrency Portfolio Part 4 – The Best Methods Explained

Hedging Your Cryptocurrency Portfolio Part 4 – The Best Methods Explained

 


Perpetual Swaps

Perpetual swaps (or just perpetuals) have recently grown in popularity. More and more cryptocurrency exchanges are starting to offer them. Their use is quite similar to that of inverse futures. However, it does have some differences, mainly:
The periodic funding rate (usually 8 hours)
No expiration date
Why Would You Use This Method
The key reasons for using this method are the same as with using futures. The main difference would be that the short funding rate means that perpetual swaps closely track the underlying prices (much closer than the futures). On the other hand, this also means that your hedging cost may vary (as funding rates are re-adjusted every 8 hours).
Not having to deal with rollovers reduces your trading costs as well.

How You Construct This

The portfolio construction is exactly the same as inverse futures. Check out part 2 of our series to see how to construct this hedging method. The only difference is that you will need to have an account on an exchange that offers perpetual swaps.

Summary

Just like hedging with futures, hedging with swaps is best suited for cryptocurrency investors that carry the standard coins rather than ones that are well diversified. It is also for the investors that want to hedge their exposures efficiently. A good understanding of perpetual swaps is highly recommended, as you will need to assess the risk of using financial derivatives fully.


Pros and Cons are mostly the same as for futures, so this table will list the differences between the two:

Bonus: Why Do People Hedge?


Most investors in the cryptocurrency industry probably want the exposure as they expect their favorite crypto to “go to the moon.” However, in some cases, they might want to stay safe for certain reasons. Those reasons are dependent on what position they have in the industry:

Miners

Miners need to pay their electricity bills as well as other costs in USD or their native currency. For this reason, they might want to have more predictability on their capital returns. They could sell their cryptocurrencies directly, but it may be more beneficial for them to stock up their cryptocurrencies and sell them in one larger batch periodically. This way of selling cryptos is better as they can negotiate better fees and reduce certain transfer costs. Therefore, miners will hedge to reduce their risk while they are piling up cryptocurrencies to sell them in a bigger batch.

ICO Projects

ICO projects often incur various costs in USD. They often have a need for a more predictable cash flow, which is why they might want to sell some cryptocurrencies they hold. However, they do not want to be seen selling their own tokens or funds, as that could be interpreted as a weakness and send off a bad vibe to the investors. Therefore, ICO projects hedge to keep their cash flow more predictable while maintaining the trust of their investors.

Funds

Certain funds employ strategies that are based on a return that is relative to Bitcoin. In this case, they would have to overlay their portfolio with a BTC equivalent hedge so the returns they get become relative to BTC’s performance.
Whales

Selling a significant amount of cryptocurrencies is not as easy as it can cause market fear. Whales need to make sure not to cause big market drops when wanting to cash out. Therefore, their alternative would be to put hedges in place. This reduces their overall exposure as they slowly sell their holdings over a longer period of time.

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Hedging Your Cryptocurrency Portfolio Part 3 – The Best Methods Explained

Hedging your cryptocurrency portfolio – part 3/4

 

Options
Options are a fairly new and limited concept in the cryptocurrency space. The only exchanges that actually offer it are Deribit and Bitmex.
Hedging using options can be pretty complicated. There are multiple ways you can build exactly what you want. We will show one of the most straightforward ways you can hedge out downside risk.


Why You Would Use This Method

One of the main benefits of hedging by using options is the difference in the payout. Hedging by buying put options can turn your existing options into a call option payout (which have limited downside with unlimited upside). The caveat to the method is that options, especially in the cryptocurrency market, are quite expensive.

Another great thing is that the margin does not need to be monitored as we are purchasing options to construct the hedge. These pros make it a fairly good method for investors that:
Are looking to hedge their positions but cannot, or don’t want to monitor their margin requirements Want the downside protection while still maintaining the potential upside gains.

How to Construct it

You will need:
An account with Deribit (they are the only exchange that offers crypto options)
The steps to constructing this method are similar to using futures:
Based on the current price of Bitcoin and your expected hedging time frame, check for the closest in the money (ITM) put option.
As an example, if BTC is at 6432 and you would like to hold it until the end of the quarter, look for the 6500 put option pricing for the end of the current quarter.
Check the current price of your chosen ITM put option and calculate how much funds you would need to deposit so you could make a 1:1 coverage of your BTC holdings.
Deposit the predetermined funds into the exchange.
Purchase the put option and simply hold it until expiration.

Summary

Hedging with options can be quite a complex task. However, this also means that it can be better tailored to your needs. If you want to use options to hedge and you want to hedge frequently, learning all there is about options is certainly a no-brainer.
Options hedging, as any type of hedging, has its Pros and Cons:


Check out our final part of the Hedging your crypto portfolio, where we will talk about hedging by using Perpetual Swaps.

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Hedging Your Cryptocurrency Portfolio Part 2 – The Best Methods Explained

Hedging your cryptocurrency portfolio – part 2/4


Futures

Futures represent financial contracts that obligate the buyer to purchase a certain asset (or the seller to sell a certain asset) at a predetermined future date and a predetermined price.
Just like in traditional finance, cryptocurrencies have futures contracts that you can use to hedge out your position. Crypto market comes with two types of futures:
Futures that trade in USD and settle in USD, such as CME Bitcoin Futures and CBOE Bitcoin

Futures
Inverse Futures that trade in USD pricing, but settle in BTC, such as Bitmex Quarterly Contract Futures
The profit and loss calculations work slightly differently for these two methods. However, they can both come to the same result.
An example of the investment is (if you wish to hedge your position fully):

Calculation explained:
As Bitmex offers only BTCUSD and ETHBTC futures, we need to convert ETH to BTC first. As the contracts are denominated in ETH, we will:
Short 10 ETHBTC futures
Factor this into our BTCUSD hedge. The total short of the BTCUSD position = $6,500 x 10 + $200 x 10 = $6,700
By using this method, your portfolio will be fully hedged (as long as you make sure to maintain your hedge).

Why Would You Use This?

Futures contracts are a fairly cost-efficient way of hedging out your risk. This is because:
You have a lower capital requirement due to the leverage you can use.
You can profit from the hedge over time if the market goes in your favor.
You know the full cost of your hedge the moment you place the hedge on, unlike some other methods of hedging.
How You Construct The Hedge
In order to start hedging by utilizing futures, you will need:

An account with a crypto futures exchange.
To construct this hedged portfolio:
Choose which future contract you will use. Your decision should depend on which currency you wish to settle in and fund the exchange.
If you are settling in USD, you can sell some crypto to fund the account. However, keep in mind that withdrawals and deposits could take some time to process.
Based upon your holdings and what is available on the exchange, you need to calculate which combination of futures contracts you need as well as how many contracts.
Monitor your short positions profit and loss so that if you are getting close to your margin call, you will need to deposit more USD or cryptocurrency into the exchange to maintain your short position.

Depositing into the exchanges can take some time, and since crypto markets are very volatile, make sure to do everything in time.
Close out the short position when you think there is no reason to hedge anymore.

Summary


Hedging by using futures is best suited for cryptocurrency investors that carry the standard coins and are not overly diversified into altcoins. Hedging by using futures is very efficient but requires knowledge of the market as well as futures themselves.

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Hedging Your Cryptocurrency Portfolio Part 1 – The Best Methods Explained

Hedging your cryptocurrency portfolio – part 1/4

If you are looking for ways to hedge out your crypto investment exposure, this guide will cover four different methods that you can use:

Short Selling
Futures
Perpetual Swaps
Options

Selling vs. Hedging

The first question that should be asked is, why is there a need to hedge when you can just sell. This point will be covered in each hedge method section individually to avoid any misunderstandings.

Short Selling

This is the most straightforward method of hedging out your investments. All you need to do is to short sell the cryptocurrencies so that your portfolio will look like shown on the picture (assuming you want to hedge your exposure fully).

Why Would You Use This?

Long-term investors say that you are better off just selling your cryptos as the cost of short selling is higher for the amount of margin funding cost. However, hedging is good for reducing risk in the short-term.
There are several reasons why hedging crypto in the short term is better than selling:
Once you sell your cryptocurrencies on the exchange, the proceeds of the sale remain on the exchange until withdrawal (which isn’t always that easy). This makes your funds subject to default risk. Short selling requires you to have fewer funds on the exchange (which is not the best to store your cryptos on). If your hedge period is short, the process of selling, withdrawing, and then depositing and buying back could be too slow.

How To Construct This

For this method, you are required to have:
An account with any exchange that provides the option to short sell (Optional) USD for maintaining margin in your account
We will be using BTC as an example of constructing a short-sell hedge:

1. Deposit your USD into the exchange that provides the option to short sell. If you do not have any USD available, you can deposit some cryptocurrency and sell a fraction of it
2. The amount of USD that should be on the account will depend on the margin requirements of the exchange
3. Put on a short position on the cryptocurrency that you want to hedge against at a 1:1 ratio. As an example, hedging 10 BTC at a 1:1 ratio will require a short position of 10 BTC
4. Monitor your short positions to avoid reaching the margin call.
6. Close out your short position when you decide to close out your hedge.
Summary
Short selling as a hedge method is best suited for investors that are already diversified, and that want to hedge as selling parts of their portfolio would take too long.
There are quite a few pros as well as cons to using short selling for hedging. This table shows some of them:


Check out the next part of the Hedging your cryptocurrency portfolio, where we will talk about using futures as a hedge.

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Five Of The Best Trading Strategies For Trading Part 2

Five proper trading strategies for trading crypto during turbulent periods – part 2/2

This video will touch upon three more ways of dealing with turbulent periods of the crypto market.

Following the Trend

If you did your research and concluded that trend would continue for a while, or if it is too hard to predict when the price will change its direction, following the trend is a more risk-averse strategy. With this strategy, you should trade with the trend rather than trading with the swings. If the market is trending up, open only long trades. If the market is dropping, open only short trades. Trend followers start trading only after a trend has been established, while they exit when the trend changes. This trading method is also called “Position Trading.”
There is quite a number of tools that you can use to maximize profits as well as to minimize risks. These include margin trading, leverage, and stop-loss orders.

Advantages: Strategy such as following the trend is more of a risk-averse strategy. It works if the market, whether the market is going up or down.
Downsides: Crypto markets are unpredictable, so you will need good mechanisms put in place to protect against sudden changes in price direction.

Investing in Staking Coins

Employing this strategy will require doing some serious research.
Staking coins and tokens are the assets that perfectly align with the diversification goal an investor might have, as they generate staking profits over time. All you have to do is to buy them, lock them and stake, therefore becoming a validator node in their network. Validator nodes receive rewards for generating new blocks and securing blockchain networks. There are many staking coins and tokens out there, such as DASH, NEO, Lisk, Qtum, etc.
Advantages: This investment strategy doesn’t require any additional maintenance from you.
Downsides: You are still exposed, to some degree, to the ups and downs of the market.

Investing in a Tokenized Crypto Fund

If you want to collect some form of profit from all of the strategies mentioned above, you should opt for tokenized crypto funds.
These funds are pools of investor capital that are managed by a team of professional investors. Fund managers use a range of strategies to earn returns on all of the capital within the fund. Investors that join the pool benefit from having access to the skills professional traders have, while the professional traders benefit from having much more capital to work with.
Tokenized crypto funds examples
There are some examples of tokenized crypto funds available to the public. Crypto20 is an autonomously organized crypto fund that functions as an index fund for, but for cryptocurrencies. This is not the only crypto fund available, as there are quite a few nowadays.

Conclusion

In times of panic and market downfall, experienced investors usually come out on top. By using the right strategies and having a cool head, it’s possible to be profitable during all market conditions.

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Five Of The Best Trading Strategies For Trading Part 1

Five trading strategies for trading crypto during turbulent periods – part 1/2

The cryptocurrency market is known to be quite volatile. Volatility brings a lot of opportunities, but also a lot of risk to the traders. These are five of the best ways to make a profit when markets are turbulent.


Scalping

Scalping is a well-known strategy amongst traders. This strategy takes advantage of small market movements and requires precision and decisiveness. Traders are quickly entering and exiting positions during an hour, a minute, or even just a few seconds. The key to this strategy is making many small trades. There is no need for high returns per trade, as there are many opportunities for scalpers. You should rather be aiming to maintain or increase your win/loss ratio. With this strategy, the size of winning and losing trades is almost the same as there is no opportunity to maintain a high reward-to-risk trade setup. Therefore, in order to profit, you need to win more often than to lose.
Scalper traders usually want to avoid high volatility because this trading strategy does not cope well with unpredictable moves. The best time for a scalper to trade is during a ranging market bound by strict support and resistance levels.
While scalping is considered relatively safe, it requires patience and discipline as well as some experience in reading the charts. Scalpers may utilize trading algorithms and bots to make trades for them, therefore avoiding any emotion-based trades.


Buying the Dips

This strategy may seem counterintuitive to some people, but a drop in any asset’s price is a great time to buy it, as long as the asset is known for being volatile. Assuming we are talking about a strong asset, the price will revert and reach the previous highs as soon as the market regains its confidence.

When taking a quick look at the Bitcoin price over the past decade, we can see a strong upward trend, but also times when the price was over and undervalued. As most buyers and sellers are just regular people and not professional traders and investors, the crypto market is extremely sensitive to news stories and media hype. When the good news gets published, people rush to buy already overvalued cryptocurrencies. On the other hand, when something bad happens, people panic and sell their holdings at below their true value.
Times such as these are the perfect opportunity for investors to buy the undervalued cryptocurrencies. Using their expertise to assess the market conditions and fundamentals, they predict when the market is most undervalued. When they determine that the market is likely to make a recovery, they buy.

As an opposite strategy to scalping, buying the price dips doesn’t require much precision, but rather expertise and “feel” in order to recognize when an asset is undervalued. You only need to make a single trade and wait for the profit from the upward trajectory to kick in. However, you probably won’t see any quick profits. On top of that, perfect market timing is everything with this strategy as you need to recognize market reversals.

Check out part 2 of our trading strategies to find out more about how to trade during volatile periods of the crypto market.

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Five Tips For Entering The Cryptocurrency Bull Market – Avoiding Common Mistakes

Five tips for entering the cryptocurrency bull market

 

With the cryptocurrency market being on the verge of a bull market, it is good to know what to do when that happens.

1. Withdraw from the crypto exchange after you’ve finished trading!


Exchanges are notoriously insecure, and with all the security breaches, mismanaging of the user funds, exit scams, or a surprise AML/KYC to seize the investors’ funds, you’re always at risk with your holdings being held by the exchange. There are many valid reasons why “Not your keys, not your Bitcoin,” became a mantra among traders. Many traders lost substantial amounts of money to hacks, unethical exchanges, and exit scams.
When it comes to surprise AML/KYC seizures, it could be possible to recover funds by doxxing yourself, which is not ideal. However, some platforms simply make the demands for personal information that are so appalling that you may never get your cryptos back.

2. Stop talking about your portfolio!

Operational security is the king in the land of cryptocurrencies. During the last bull market, some people that were talking about their outrageous gains got kidnapped, become victims of home invaders trying to find their crypto-keys and devices. All this because they wanted to brag about their portfolio gains on social media. Advertising your gains on social media (or anywhere for that matter) is like painting a red dot on your forehead.

3. Keep your holdings on a hardware wallet!


Another security consideration should be to store your holdings offline on a hardware wallet. Preferably, it would help if you kept the hardware wallet and recovery seed in different and secure locations. Hacking, as well as ransomware, is, sadly, an epidemic online. Therefore, keeping your coins off your laptop or mobile phone is an easy way to sidestep the risk of losing your holdings this way.

4. Don’t use trading signal services!


Countless trading coaches popped up on the internet during the last bull run. They offered courses, trading signals, and paid trading signal groups without any testimonials of what they did prior to being coaches. While it is obvious that these trading coaches are scam artists, many people fell for their scam and lost quite a lot of money.

There are many ways to learn how to trade safely. Taking free courses or reading free ebooks about trading, as well as practicing on a demo account, all fall into this category.

5. Perform in-depth research before investing!

The cryptocurrency industry is young and full of scammers, as most of the retail investors are young and have never tried themselves in the traditional markets. This attracts the most unscrupulous scammers that are trying to take the funds away from the investors in any way possible. During the bull market and the ICO craze of 2017, many scams and terrible investment opportunities started popping up.
The scammers in the crypto field basically forced the world’s regulatory agencies to step in and put an end to the “scammer’s free for all.” As a fun fact, there was even an ICO that used a picture of the famous actor Ryan Gosling as their supposed “graphic designer.”
Even if the projects are not scams, it is important to do the research in order to gauge whether it is worth your money or not. Do your due diligence and always make sure you are fully aware of what you’re actually investing in.

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Surviving a Bear Market! – Crypto Money Making Strategies Part 2

Cryptos in a bear market – what to do? – part 2/2

This article is picking up where the first one left off, which is explaining various things a trader can do while the cryptocurrency market is in a bearish trend.


Holding

The second strategy would be holding, or “HODLing.” This is often a confusing term for a lot of newcomers, as most of them think that it is a misspelling. Interestingly enough, “HODL” became an acronym for “Hold On for Dear Life,” which means that investors will not sell their holdings even if the market goes into a deep downtrend.

The term represents a trading strategy, if it may be called a strategy, that is used by those who are willing to wait for greener pastures. Holding is a long-term strategy but also a philosophy of numerous investors. Since the crypto market is still young and new, it is widely believed that the current volatility, prices, and market crashes are just regular occurrences that happen on the path to stabilization and maturity. HODLers often think that the key to making a profit with cryptos is to stick to their holdings and endure the pressure. When the market stabilizes, and cryptos reach widespread adoption, it is expected that the HODLers will be rewarded for trusting in their cryptocurrencies.
HODLing is a huge part of the crypto culture nowadays. This strategy has gained a lot of support from investors all over the globe. As the overall opinion is that cryptocurrencies are here to stay, HODLing has a big potential in the long run. This strategy, just like short-selling, did not get created by crypto traders. The best example of failing to HODL, as well as the true testament of HODLing working, is Ronald Wayne’s sale of Apple shares in 1970. Back then, he made $800 from selling the shares. If he had waited a few decades, his $800 gain would have become $100 billion.

Everyone knows that predicting the future is impossible. However, popular investors such as Jay Smith think that holding is always the best option if you trust in the asset. He is convinced that cryptocurrencies will replace the old stock markets. He also said that they would power machines, the Internet of Things, governance, and voting systems, maybe even the internet itself. While he understands that it might take years, maybe even decades before this prediction comes true, he is convinced that cryptos are the future and that there is no better way to invest in crypto than by buying and holding.

Buy Low – Sell High

Naturally, investors always want to make a profit. For that reason, when the value of cryptocurrencies goes down, many investors decide to cut their losses. Only a rare few are willing to risk it and keep buying, even if their prices are going down. Most of the people tend to buy near the top and sell near the bottom of the move. This occurrence is not limited only to crypto; it is rather the human nature of risk-aversion.

While many investors panic-sell their holdings that they have bought near the top, some others are trying to average down the price of their holdings. As always, any and every investor must do proper in-depth research before buying any coin.


Diversification

Finally, the last so-called strategy for aspiring investors is always to diversify their holdings. Since predicting the future is impossible, any investment is a risk, especially cryptocurrencies. However, investing in a few projects that you are interested in increases the chances of making the right call.
Traders can diversify by investing in projects they like, but the main thing is to diversify by investing in assets with low correlation. By investing in such assets, the price drop of one asset will not affect the price of the others.

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Surviving a Bear Market! – Crypto Trading Strategies Part 1

Cryptos in a bear market – what to do? part 1/2

Ever since Bitcoin got created (over ten years ago), investors have learned how volatile the cryptocurrency market can be. As the years passed, bull and bear trends have constantly replaced one another, with little to no way of predicting or preventing them. Even the smallest details were enough to change the situation of the market completely.


The biggest growth that cryptocurrencies have ever seen came in 2017 when the bulls took over the market and brought coins to entirely new heights. Those that have invested prior to the bull run, made quite a fortune. However, those that invested while the prices were up — lost a fortune. This was due to a massive market crash that happened in early 2018. The downtrend continued throughout the year, all the way until now.

These days, experts predict a new bull run, as they believe that cryptocurrencies follow an established market cycle. Considering the situation and the state the crypto market was in, investors needed to develop various strategies in order to survive the bear market. These strategies were not necessarily about making a profit but rather preserving money. We will present four strategies that might work in such a situation, and these are as follows:

Shooting
Holding
Buy low – sell high
Diversification
Shorting


Short-selling, or “shorting,” occurs when traders predict that a market is about to decline. If their prediction is correct, they earn a profit as they bet on the market going down. This method works in many different markets and is not limited to just crypto markets.

The most well-known example of shorting happened in 1992 when an investor called George Soros predicted the drop of the British pound and made nearly $1 billion in profit.
Shorting has proven itself to be quite an effective way of making a profit. This way of trading is possible through CFDs (Contracts For Difference) as well as cryptocurrency margin exchanges. By employing this strategy, traders can sell assets that they do not own. Instead, they borrow assets and sell them at current prices, and then rebuy them at (hopefully) lower prices.
If the market moves down, their position goes up, which then lets traders buy the asset at a much lower price, and make a profit. Exchanges such as Bitmex offer its users shorting options based on how much Bitcoin they own.
Shorting doesn’t have to be used for just making a profit. It can also be used for hedging purposes.


If a trader is holding large amounts of a certain asset, such as Bitcoin, they can open a short position to decrease the risk of losing money in case the asset moves in the opposite direction.

Check out part 2 of our How to trade in a bear market guide to learn more about the strategies that can be employed in a downtrend.

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Bitcoin & Cryptocurrencies During The Coronavirus Outbreak – What We Know & How To Trade!

Bitcoin and cryptocurrencies during the coronavirus outbreak

Since the first patient was diagnosed on Dec 8 in Wuhan, the virus has claimed over 800 lives. There were nearly 34,000 confirmed cases.
Given China’s status as a cryptocurrency investment hub, professionals are concerned, to varying degrees, about coronavirus’s potential to disrupt the business as well as the impact on prices.


Optimistic market?

While Chinese cryptocurrency investors are a considerable market force, statistics say that it’s difficult to conclude a one-to-one correlation between the moves and the outbreak in the crypto market.

The whole market capitalization of cryptocurrencies is small when compared to the stock market, which means that many factors could make an impact on the market.
Most crypto investors from Asia seem to be retail investors, and they have (historically) become more active during major holidays such as the Chinese New Year. No one can predict the market prices, but based on past experiences, the prices tended to get more volatile around Chinese holidays. The virus outbreak could potentially lead to more cryptocurrency trading when it comes to retail investors as they would just stay at home and have more time to check the market.


It is also difficult to predict the market prices as digital assets such as Bitcoin have a unique set of return drivers, told Kostya Etus, senior portfolio manager at CLS Investments.
“Bitcoin isn’t viewed as a safe-haven asset like gold or cash and doesn’t have much in common with risk-on assets such as stocks either,” told Etus. “While most assets are specific to both risk-on and risk-off environments, in which you could predict the price reactions to certain events, Bitcoin is not one of such assets.”

Fluid situation

As crypto is highly speculative, the coronavirus could possibly have a significant impact on the global market, said Samuel Lee, a financial advisor at SVRN Asset Management.
“The crypto market could overreact to the outbreak since it tends to be quite irrational compared to the traditional financial market,” said Lee.
On the other hand, Lee also said that the outbreak is more likely to have a limited effect on the markets.
“We had seen Bitcoin go up at the time when there was a possibility of a war between Iran and the U.S.,” Samuel Lee announced. “However, the coronavirus might not have such a geopolitical influence.”
The World Health Organization was debating on whether to declare this outbreak as an international public health emergency but finally did after many deaths struck the infected.
The S&P 500 turned positive even after the WHO summoned an emergency meeting on how to tackle the coronavirus outbreak. However, the market is dropped slightly in recent days.
“Most previous regional epidemics seem to have had very limited impact on the equity market, except for SARS,” said Wilfred Daye, senior advisor of Bardi Co. However, coronavirus ended up surpassing SARS in deaths.
“When prolonged epidemics become a market-driving factor, the cryptocurrency market will surely react more sharply,” said Daye. Daye also worked as the former head of financial markets at OkCoin.

Conclusion

While there is no sure way to determine whether coronavirus will affect crypto trading, it is almost certain that it will not affect it negatively. The markets will either not be affected by this event, or have an increased volume due to Chinese investors staying at home and having more time to trade.

 

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eToro Platform Review Part 3 – Copy Trading Pros!

eToro platform review – part 3/3

The last part of the eToro platform review will cover the social aspect of the platform as well as deposit and withdrawal methods.

eToro usability

eToro offers some essential features that make life much easier for novice traders. The platform provides a Virtual Portfolio, which basically is a ‘demo mode’ that lets users play a game of trading without actually trading and without staking any real money. This mode allows you to buy as much ‘virtual’ Bitcoin or any other crypto as you like and watch how each cryptocurrency performs. This is also a great way to test trading strategies.

eToro also provides a feature called copy trading. This feature is excellent for traders that aren’t confident in their ability to select winning trades consistently. This feature allows you to copy the best-performing traders in any asset market. You choose the trade amount, and the platform will mirror every single action the trader takes. Users, however, can make adjustments such as copying only new trades and not all currently open positions.

The layout of eToro’s platform is user-friendly, easy to navigate, and suited for casual investors. The control panel is located on the left-hand side of the screen, while the right-hand side shows charts, data, as well as profiles you’ll need to trade properly. eToro’s also has a mobile application mobile that allows you to do everything you can do on your desktop. The platform app is available for both Android and iOS devices.

eToro social trading

eToro’s copy trading, as mentioned before, enables you to copy the actions of profitable traders of your choosing. This feature makes you trade like any seasoned trader you want. You can follow specific traders, monitor their actions as they happen, and opt-in to copy everything they do if you want.

This feature makes eToro the social media platform that bridges the gap between new and seasoned traders and their favorite markets.

eToro deposit and withdrawal methods

Users can deposit funds on eToro by transferring fiat currency into their eToro account. You can use your credit or debit cards as well as a variety of other options, such as wire transfer and PayPal. However, one thing to note is that all fiat funds held by eToro are held in US dollars. If you deposit funds in EUR or GBP, eToro will convert it to USD, which will incur a conversion fee. If we are speaking about crypto, getting funds on the platform is much simpler. eToro wallet has the option to store cryptos that will be traded on the platform, so all you need to do is send the cryptos to that wallet.

Withdrawals work almost exactly the same as deposits. To withdraw fiat currencies, you can use credit and debit cards, bank transfer, and PayPal. However, there is a flat withdrawal fee of $25 for every withdrawal. As this is a pretty steep fee, make sure to plan your withdrawals to avoid extra costs. Withdrawing cryptocurrencies is as simple as transferring them out of the eToro wallet and onto another wallet.

Final thoughts

eToro is quite a unique social investment platform that offers a diverse variety of investment products to people that want to trade on the go. Although it does have much higher fees compared to regular crypto trading services, the benefits may justify the costs. All in all, eToro is an excellent place to get used to trading and learn the basics.

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eToro Platform Review – part 2

eToro platform review – part 2/3

This part of the platform review will take a look at the fees eToro charges to its customers. It will also take a closer look at the crypto security of the platform.

eToro fees

Compared to the ‘standard’ crypto platforms (such as Coinbase or Binance), eToro’s fee structure differs a bit.
As eToro is a brokerage service rather than an exchange, it doesn’t charge trading fees the same way regular crypto exchanges do. eToro users will have to pay something called ‘spread fees‘ when selling crypto, and when buying cryptocurrencies using leverage. To sum it up, if you want to sell (or margin trade) a cryptocurrency, you will have to pay a percentage of the sale price. This percentage fee derives from the ‘spread’ of the asset itself, which constitutes the difference between its ‘buy’ and ‘sell’ price.

As an example, selling one Bitcoin at a market price of $10,000, you’ll also have to pay 0.75% of the Bitcoin’s value (0.75% being the current BTC spread value). Assuming that 1 BTC equals $10,000, you’ll have to pay $75.
Also, traders that are taking out a leveraged position on a cryptocurrency will have to pay ‘overnight fees,’ which are also referred to as ‘rollover fees.’ As the trader is borrowing money from the company to hold a trading position, eToro charges them interest.
eToro Spread/overnight fees
The table below will show the spread and overnight fees of the platform:
Cryptocurrency

eToro Spread Fee


As shown above, the overnight fees for Bitcoin are pretty steep. As a comparison, traditional crypto platforms are much cheaper. Kraken charges 0.01% every four hours of holding a leveraged BTC/EUR or BTC/USD position. So, if someone would hold a position of 1 BTC for 24 hours, they would have to pay around 0.00056 BTC on Kraken, while eToro users would pay $0.0075 BTC.

Similarly, the spread fees on eToro make it more expensive than trading on traditional exchanges and platforms. Binance and Bitstamp each charge only 0.1% for every trade a user makes. On the other hand, eToro’s spread fee of 0.75% for BTC is noticeably more expensive.
On top of all this, eToro also charges withdrawal fees as well as inactivity fees. The withdrawal fee is a flat $25, with users being allowed to withdraw amounts of $50 or more. The inactivity fee is $10 per month and is charged to users whose account hasn’t been used for 4 or 12 months, depending on whether they have deposited any funds.

Security of the platform

Unlike many centralized, traditional exchanges, eToro has experienced no significant scandals in the past. However, security isn’t eToro’s major selling point. Up until 2017 and 2018, cryptocurrencies weren’t directly traded using eToro. Instead, users held and traded a contract for difference (CFD), which allowed eToro to hold no crypto whatsoever.
There was no need for any additional security measures which competing crypto platforms had to have.

Today, when it does offer direct cryptocurrency trading, the additional security layers are unknown to the public. The website doesn’t specify the crypto security measures it uses to protect customers’ assets.
One thing to note is that the eToro wallet, just like other major exchanges, keeps your private key. This means that you have to trust the platform to protect your funds. That being said, eToro is one of the most secure platforms when it comes to general compliance with financial regulation. The platform is being regulated by CySEC in Europe, FinCEN in the US, and the FCA in the UK.

Make sure to check out the third part of our eToro platform review, where we will talk about the platform usability, social trading as well as withdrawal and deposit methods.

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Crypto Videos

Crypto Exchanges VS Crypto Brokerages Part 2 – Are You Getting The Best Deal?

 

Crypto exchanges VS. Crypto brokerages – part 2/2

 

Trading Exchanges

Trading on a crypto exchange is quite straightforward. All you need to do is select the desired trading instrument and then open your trade. As the chart unveils, you will watch your position. You can place buy as well as sell orders. Most exchanges try to offer some form of different orders, such as limit orders.
One of the advantages that exchanges have over brokerages is that you can pick among a lot of different cryptocurrencies to trade.


Brokers

Brokerage platforms will usually have more analysis tools that will benefit traders to achieve their goals. Most of them have advanced analysis tools, as well as several variations of orders. However, the brokerage platforms will not offer you as many cryptos to trade as an exchange. Brokers have different cryptocurrency pairs available, but they mostly offer only the most popular cryptos.

Brokers also tend to have quite tight spreads, unlike some of the less liquid exchanges. This feature prevents slippage from happening.
Another great advantage is that the brokerage platforms have many more features to offer in general. Unlike most exchanges, brokerages offer the option to put multiple charts in your view-window, track the quote flow, use sets of indicators, etc. Some brokerages even offer the option to create automatic trading strategies without any previous knowledge of coding.


Safety & Security Exchanges
Crypto exchanges can be divided into two:
Centralized exchanges! Decentralized exchanges!
Centralized exchanges are considered relatively unsafe. You can create a very strong password as well as enable 2-factor authentication. However, this does not guarantee 100% safety of funds. The main thing is that the account owner is not the owner of the keys that hold the funds. As the exchange holds all these keys, hackers only need to hack one account – the exchanges, rather than each account individually. Many exchanges got hacked, and most of these funds never got back in the hands of the original owners. While exchanges are increasing their security levels as well as introducing forms of insurance, this is far from what brokers have.
Decentralized exchanges are considered the safest way to trade cryptocurrencies, as you hold your own wallet keys. However, these exchanges are not yet big enough to have good liquidity, which creates large spreads and slippage.


Brokers

Trading cryptocurrencies with a regulated broker will guarantee some degree of safety to the clients. First of all, most brokers are regulated with a reliable authority, such as CySEC, FCA, SEC, etc. If a broker is regulated, its business is strictly audited. Regulated brokers are also members of investor compensation schemes, which ensures claims of clients and against brokerages that are unable to meet obligations due to financial downfall or bankruptcy.
However, one thing to note is that almost no brokers trade with real cryptocurrencies, but rather with derivates. While this is not necessarily bad, traders should know that using brokers will often result in trading with contracts that derive their value from cryptocurrencies, rather than with cryptos.

Conclusion

In conclusion, while cryptocurrency trading is considered high risk and due to their volatility, people can choose safer ways to ensure that their funds are always in the right hands. Exchanges and brokers have their advantages and disadvantages, and traders should pick very carefully based on their goals while trading.

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Crypto Exchanges VS Crypto Brokerages Part 1 – Are You Getting The Best Deal?

 

Crypto exchanges VS. Crypto brokerages – part 1/2

There are two ways that people can trade cryptocurrencies:Over an exchange Or With a broker.

This article will touch upon the basic things a trader has to do when trading cryptos over an exchange, as well as by using an online broker.
Extreme volatility and virtually unlimited profit potential that the crypto market brings got people going crazy about it. As a result, a lot of products and services appeared in the market. Trading via a broker or via an exchange has some differences, and they are not completely clear to the general public.


Signing up/Verification

Exchanges
The process of signing up to a crypto exchange is (in most cases) is as simple as registering on their website. Users are required to provide their email, create a password, and confirm the email address. Some exchanges might require a KYC verification, where you would be required to submit a valid ID as well as a proof of residence. The exchanges usually respond to verification requests within a day. There are, however, some cases where you don’t have to get verified once signed up.

Brokers
Signing up with a broker is, just like with exchanges, not a very difficult thing. In fact, the signup process is almost the same as on a regular exchange. On the other hand, in order to deposit funds and start trading, you will need to verify your account. As a rule, you will have to submit scan copies of either one or two documents: A valid ID or Proof of address.
The verification process is done much slower than on exchanges, as the average time of the verification is 15-days.


Deposits and Withdrawals

Exchanges
Depositing fiat to crypto exchanges can often be a hassle. Most exchanges do not accept fiat-to-crypto purchases. While there are many ways to buy cryptocurrencies out there, these transactions often have high fees and commissions.
On the other hand, withdrawing funds from exchanges can go two ways. If you want to withdraw your cryptocurrencies to a non-exchange wallet, this can be done easily and cheaply. However, withdrawing cryptocurrencies to a fiat currency account can be quite a hassle. Withdrawing cryptocurrencies to a bank account can be an issue as quite a lot of banks don’t accept money from crypto exchanges. The reason for this is that they can’t determine the origin of such money and transactions.

Brokers
Unlike cryptocurrency exchanges, depositing with a broker is much easier. A broker’s client offers a large number of ways to make a deposit. This includes credit cards, e-wallets, bank accounts, etc. You can deposit US dollars, euros, and often times, some other currencies. The ease of depositing simplifies the whole process quite a bit. On top of that, there are no deposit fees whatsoever on almost all brokerages.
As for withdrawals, broker terms are often more attractive than the terms that a cryptocurrency exchange has. While many exchanges pride themselves with low trading fees, they earn money on high withdrawal fees. However, brokers usually charge a fee of between 0% and 3%. This number can vary depending on the withdrawal method.

Check out our part 2 of Crypto exchanges VS. Crypto brokerages to find out more about the differences between the two in terms of trading as well as safety protocols.

 

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Changelly Exchange In Depth Review Part 3 – The Cheapest Way To Buy Crypto?

Changelly exchange in-depth review – part 3/3

This is third (and the last) part of the Changelly in-depth review. This part of the review will touch upon the exchange’s fees, deposit methods as well as security.

Changelly Fees

The platform’s fees consist of:
Deposit fees, Trading fees, and Withdrawal fees.
Deposit fees may vary depending on the way a user deposits the funds.

Trading fees

When choosing an exchange, you must take a look at how the trading fees are structured. Every trade occurs between two parties the market makers, whose order already exists on the order book, and the market taker, who takes the maker’s order. While makers create market liquidity, takers reduce it. Most exchanges differentiate between the fees they charge to takers and the fees they charge makers.
However, Changelly opted for a different route. The exchange charges the takers and the makers the same fees, which is called the “flat fee rate.” The platform offers a flat trading fee of 0.25%, which is considered the industry standard. This fee structure might be an attractive trading model for traders who prefer to take already existing orders from the order book, rather than having to wait for their orders to get filled.

Withdrawal fees

Many exchanges try to maximize their profits by having low trading fees while maintaining extremely high withdrawal fees. Changelly is, however, not one of them. The company charges only 0.0001 BTC for withdrawals.

Deposit Methods

Users can deposit their funds through the regular fiat transfer via the platform’s corporate partners using credit cards (such as VISA and MasterCard). This feature is extremely helpful to novice crypto investors as one of the main things they want is fiat deposits. There are many exchanges that offer no fiat currency deposit support at all, which makes Changelly stand out.
Changelly has also lowered the entry barriers for crypto-to-crypto exchanges recently. This makes traders able to deposit with as little funds as possible.

Changelly Security/Account Verification

Changelly does not submit every single user to its verification protocol. If you want to use the platform’s conversion services, you don’t need to submit any of the KYC-documentation (such as passports, utility bills, or ID photos). The only thing you need to use the conversion services is a valid wallet address. However, if you would use Changelly to purchase cryptocurrencies by using some form of fiat-based deposits (such as a credit card), then you will need to submit additional documentation in order to pass the KYC process.

General

Changelly states that security is one of its main priorities. When tested on the Mozilla Observatory test, the platform received a score of B, which is a great score for a cryptocurrency exchange. While it can be improved, many popular exchanges score as low as F on this test.

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Changelly Exchange In Depth Review Part 2 – The Cheapest Way To Buy Crypto?

Changelly exchange in-depth review – part 2/3

 

This is the second out of three parts of the Changelly in-depth review. This part of the review will touch upon the exchange’s tools, its user interface as well as supported countries.

Changelly Tools

The platform released a new version of their mobile app with the feature of a fixed-rate mechanism onboard for both Android and iOS in October 2019. This feature allows users to swap their assets while avoiding the risks of market fluctuations. However, to those who would like to exchange cryptocurrencies at a floating rate, Changelly offers a market fee of 0.25% for all crypto-to-crypto transactions. This rate is considered the industry average at the moment. In addition to these features, users have the ability to buy the desired crypto assets by using their bank card right from the Changelly mobile app. They have the option to explore crypto exchange trade rates in real-time mode.
The app features do not end here. Changelly mobile app gives its users the ability to log in to their original Changelly website account, track the transaction history, store an address list for the most used wallets on the account as well as get assistance from the Changelly team in the support section.

The platform also offers its API as well as a customizable payment widget to any crypto service provider that wishes to broaden its audience by implementing new exchange options. Many wallets are using this feature on top of their web/desktop/mobile applications.

Changelly User Interface

The user interface is one of the most important things for traders, and one of the main characteristics of different exchanges. The user interface at Changelly is quite simple and more intuitive than what you could see with regular centralized exchanges. The reason for this is because:
Changelly is more of an exchange service rather than an actual exchange;
Changelly is made to be used by the inexperienced individuals, which requires user interface simplification.

Restricted Jurisdictions

While Changelly is available in many countries, it restricts users from many countries as well from joining. The platform is not accessible to traders from the USA, Cuba, Iran, North Korea, Crimea, Sudan, Syria, Bangladesh, or Bolivia. Users from other countries that are subject to United Nations Security Council Sanctions List, as well as its equivalents, are not allowed to the user the platform.

Changelly implemented AML/KYC procedure into their service. This means that the platform has the option to ask its users to show “proof-of-funds” as well as to go through the KYC check. The KYC procedure is done only if the Changelly’s automated risk management system marked some user’s transactions as suspicious.
Check out the third and last part of our series on Changelly, where we will discuss the platform fees, deposit methods as well as security.

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Changelly Exchange In Depth Review Part 1 – The Cheapest Way To Buy Crypto?

 

Changelly exchange in-depth review – part 1/3

This is the first out of three parts of the Changelly in-depth review. This part of the review will touch upon the exchange’s background, how it works exactly, and what its advantages are.

General Info

Changelly is not an exchange like the others. This platform is an instant crypto exchange that started operating in 2015. While it was previously headquartered in the Czech Republic, it is now based in Hong Kong. It also has offices around the world, including Malta, Great Britain, and Brazil.
The group that founded Changelly is MinerGate, a team with a long track-record on the crypto market. However, MinerGate has no involvement in Changelly’s current operations. The current CEO of Changelly is Eric Benz, who has five years of experience working in the industry of innovative financial technology as well as the blockchain field.

How does Changelly work?

This platform is best at finding the best available rates for different trading pairs on the market. Changelly actually shouldn’t be considered exchange per se, as it is a crypto exchange service. The platform is non-custodial, which means that you are not purchasing crypto on Changelly, but rather buying crypto from another exchange. The platform provides users with a window into other exchanges (such as Binance, Bittrex, Poloniex, and HitBTC).

The platform has over 150 cryptocurrencies listed. It focuses mainly on crypto-to-crypto trading. However, it is also possible to buy crypto with fiat currencies using Changelly’s card payment partners, which are Simplex and Indacoin. Users that want to use the fiat-to-crypto transactions need to comply with the KYC policy. They will also be subject to higher service fees

Primary Advantages of Changelly

The platform lists five primary advantages of its trading platform on the landing page:
The best rates on the market;
Transparency in fees;
Fast transaction speed;
High limits and
24/7 support.

All five of these advantages are crucial for its users.

Changelly Affiliate Program

The platform also has an affiliate program. If you refer another user to Changelly, you will be eligible to collect 50% of the fees from every transaction they make within the promo period. This deal is not time-limited, but rather permanent. There are two ways you can join the Changelly affiliate program:
Through the Changelly widget;
By using the exchange button with a referral link.

The 50% revenue share model will work for 90 days from the referred user’s registration. We have to note that this is an unusually short referral period, as most exchanges offer permanent commission payments. This means that some other exchanges offer affiliate programs where you will never stop receiving commissions, as long as the referred user keeps on trading.

Check out the second part of our Changelly in-depth review three-part series, where we will talk about the platform UI and supported countries.

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Bittrex Exchange In Depth Review Part 2

 

Bittrex exchange in-depth review – part 2/2

This part of the Bittrex exchange in-depth review will explain how the platform operates, the fees as well as the overall security of the platform.

Bittrex Chart view


Different exchanges often have their proprietary charts. However, all the user interfaces usually have a few things in common: they all show the order book, the price chart of the chosen asset as well as the order history. They also have buy and sell boxes. Before choosing an exchange, try to look at the user interface and determine if it will suit you.

Bittrex Fees

Bittrex has two types of fees! Trading fees and Withdrawal fees.

Trading fees
Bittrex is one of the exchanges that doesn’t charge different fees for market takers and makers. This type of fee structure is usually called “flat fees.” Bittrex offers its customer base a flat trading fee of 0.25%. Investors who prefer to take the orders from the market rather than set the orders themselves might prefer this fee model. The fees, however, do scale with trading size. The fees are divided between market taker fees and maker fees once the trading volume exceeds $200,000.

Bittrex’s flat fees the same as the majority of the industry that uses flat fees. However, more and more exchanges are now shifting to lower trading fees, ranging between 0.10%-0.15%. It is quite reasonable to believe that the 0.10% fee will be the new industry average.

Withdrawal fees

While many exchanges have competitive trading fees, they often have extremely high withdrawal fees to compensate. Bittrex does not do that. This exchange’s withdrawal fee is set at 0.0005 BTC when withdrawing BTC. This is either in line with or lower than the global industry average.

Deposit Methods

Bittrex, along with Poloniex, has been criticized for not providing fiat currency support to its customers. If you have money in a bank account and would like to start trading crypto, Bittrex is not a suitable exchange. However, this rule is not quite as strict and has an exception. If you want to deposit a sum of over $100,000, you could do that on Bittrex. The exchange decided to allow corporate clients to deposit fiat currency on 31 May 2018. When the news of partnering with the New York Signature Bank news broke out, Bittrex also announced that they would soon enable fiat currency deposits for all traders as well.

Bittrex Security

 

As exchanges store a massive amount of valuable personal info as well as assets, they need to have stellar security. The info they store can be anything, including names and addresses, government ID details, tax ID numbers, etc.
Bittrex’s hit a security score of B when performing a security test at Observatory by Mozilla. This is considered a very strong security score. When crypto exchanges go, it is far above average.

Bittrex also seems to be very committed to providing strong security to its customer base. They are stating that they “incorporate multiple layers of protection, using the most reliable and effective security technologies available.”
The exchange has a 99.95% uptime rate, which is quite an amazing proof of the trading engine reliability.

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Bittrex Exchange In Depth Review Part 1

 

Bittrex exchange in-depth review – part 1/2

This part of the in-depth review of the Bittrex exchange will touch on the basics of the platform, its team as well as the liquidity of the exchange itself. This is the first of 2 parts of the Bittrex in-depth review.

General Info

Bittrex is an exchange founded in Seattle, Washington, USA. The exchange started off its operations in February of 2014. Back when the company was founded, there were a lot fewer exchanges, so the exchange became extremely popular as the industry was not as crowded.
Bittrex is still considered a popular exchange, though its popularity dropped over time. The Bittrex team considers this exchange to be a global leader in the crypto revolution. They market their exchange as a platform designed for people who require extremely fast trade executions, secure digital wallets as well as leading industry practices.

Bittrex doesn’t just have its platform, but also a “Blockchain Incubator.” To promote global innovation in the industry, Bittrex works with various teams so they could help new tokens with potentially great use-cases to transform the industry they are targeting.
Bittrex is one of the most popular exchanges that originate from the USA. As they are operating from the USA, they permit US investors to join the platform (Unlike BitMEX, which does not allow US investors on their platform).

Team

The main people who stand behind the Bittrex exchange are Bill Shihara (the company Co-Founder and CEO), Richie Lai (which is also Co-Founder as well as the CIO – Chief Information Office) and Rami Kawach (CTO). These three individuals come from a background of cybersecurity. They have previously worked at many well-established companies in the tech-sector (such as Blackberry & Amazon).

The Bittrex Trading Engine

Bittrex notified its user base of an update to its platform’s trading engine on 25 February 2019. The update then got carried out on 27 February 2019. The purpose of this major update was to make the platform much faster, scalable as well as to pave the way for “additional, exciting upgrades and features” later on. Since the update, the order book updates faster, while overall order execution is much smoother. In fact, the orders process speed is more than 20 times faster than before the platform update happened.

Liquidity

Bittrex’s liquidity is considered decent. However, there is quite a distance to cover if the exchange wants to catch up with the top 10 exchanges in terms of liquidity. Bittrex reported its 24-hour trading volume at approximately $13 million in February 2019. On 11 June 2019, the report showed Bittrex’s 24-hour trading volume increasing almost five times, coming at $55 million. However, the past months have shown us that Bittrex’s volume reduced overall.
Check out part 2 of our Bittrex in-depth guide to learn more about the platform itself, its fees and deposit methods, as well as the security of the exchange.

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Poloniex In Depth Exchange Review Part 3

Poloniex in-depth exchange review – part 3/3

Poloniex platform safety

Poloniex offers security to its users in multiple ways. To prevent hackers from entering the back-end of the platform, Poloniex stores the majority of deposits in an air-gapped cold storage offline.

The exchange has auditing programs that are constantly being performed. These programs are used to monitor the activity on the platform with the goal of detecting suspicious activity. If they notice anything suspicious, the results are reported and then blocked.
Poloniex experienced one security breach in 2014, but the users were refunded. This event happened when the exchange was quite new and wasn’t well versed in handling intruders. However, no breaches were reported since then.

Fees

Poloniex offers maker-taker and volume-tiered fee schedule. Users can check their Trading Tier Status in their account tab to see which level they are at. The greater your trading volume, the lower your fees are.
Fees differentiate between market makers and takers. Market makers are traders that create an order within the order book, while the takers “take the order” from the order book. Market makers have lower fees as they improve the liquidity of the exchange, while takers reduce it (and therefore have a higher trading fee).


The account trading volume is calculated every 24 hours. It is based on the past 30 days and combines both margin and spot trading.

Poloniex customer support

One of the areas where Poloniex cannot be proud of is their customer service. Multiple online reviews claim extremely long wait times, with some users reporting having to wait as much as 90 days to resolve their issues. The problem seems to be in the rising demand of the Poloniex platform rather than the quality of the customer support itself.

To make up for the slow support response time, Poloniex offers plenty of documentation that can help users resolve their issues. Most of the documents are located in the Support Center. Users can find the answers to the most common questions and hopefully resolve the issues themselves.

Poloniex Customer Reviews

Poloniex is a well-known exchange with many reviews online. As with every other popular exchange, the reviews are mixed. The slow customer support response time was one of the biggest downsides to the platform. Some traders also stated that they had liquidity issues as well as issues. Having to wait for approval on a withdrawal request for a long time is another thing that the reviewers were stating.
Despite these issues, the majority of the reviews are positive. Traders are coming back to Poloniex because of its great trading tools, high trading volume as well as and a large number of trading pairs.

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Poloniex In Depth Exchange Review Part 1 – #Cryptotrader

 

Poloniex in-depth exchange review – part 1/3

With so many different cryptocurrency exchanges flooding the market, it’s hard to pick the right one. However, Poloniex remains a prominent exchange due to how long it’s been in the industry, and because of all the features it offers to the traders. On top of that, Poloniex is one of the few exchanges that is based in the US. Poloniex prides itself on offering its users advanced trading features alongside with maximum security.

Poloniex is a cryptocurrency exchange that started its operations in 2014 out of Wilmington, Delaware. Poloniex has been acquired by Circle, a Goldman-Sachs backed company. This got announced as great news as such a big player entered the crypto market. With Circle as the new owners, Poloniex aims to be the first fully regulated cryptocurrency exchange. They will be doing so by registering with the SEC as well as FINRA as a broker/dealer.

Poloniex is fairly consistent in having the top trading volumes for several altcoins. The exchange also has a great number of trading pairs that are offered to the users. One of the biggest downsides of Poloniex is that it does not offer fiat-to-crypto trading.

Who is Poloniex made for?

Newcomers in the cryptocurrency trading industry may find Poloniex a little frightening at first. First of all, the exchange deals only with cryptocurrency, so you purchasing crypto via Poloniex is not possible.

Additionally, the exchange as a whole is aimed a bit more towards experienced traders than those new to the cryptocurrency space. Poloniex has no mobile app, which makes the exchange somewhat challenging to use on the go.

Poloniex features

Poloniex offers many features that experienced traders will appreciate. A broad range of efficient data-analysis tools, as well as very detailed charts, are provided by the exchange. Poloniex’s high-volume nature appeals greatly to traders, especially the ability to do lending and trade on a margin.


Traders with programming knowledge will value that almost all the trading interface code is executed on the client-side. That means it is open-source, so you can study it and learn more about how Poloniex logic works. Developers will also appreciate the avaliability of an API. The Polonex API makes it possible to develop tools for data analysis, account management, custom trading and more.

Supported countries

Poloniex is based in the United States, but anyone can use it as long as their country doesn’t have laws that prohibit the exchange of cryptocurrency. As Poloniex is a crypto-to-crypto exchange, it does not need to adhere to any financial regulation.

Conclusion

People that want a reliable exchange that supports a lot of cryptocurrency pairs and offers additional features, such as margin trading, Poloniex is a great option.
With the exchange being acquired by Circle, you can be assured that Poloniex will adhere to all regulations required in order to keep the exchange legal and relevant.

Check out part 2 of our Poloniex in-depth review to learn more about account creation, trading, and using margin on this exchange.

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Is Huobi The Right Exchange For You! – Part 2 Trading

Is Huobi the right exchange for you? In-depth exchange review part 2/2

Huobi platform

Huobi offers its users a web-based trading platform with basic trading functionality as well as a desktop version of the application for Windows and Mac computers. The desktop application versions are currently not available in English.

The Huobi platform has a fixed layout that cannot be changed. Each section of the platform is organized into a fixed position. The sections can, however, be expanded or minimized. The biggest part of the screen is taken by the charts and the watch list. The order windows section can be seen at the bottom center of the screen. Traders are offered two main order types:

1. Market order
2. Limit order

Huobi has both their own original charts as well as Trading View charts.

Huobi has both their own original charts as well as Trading View charts.
Placing an order on the platform is easy as the value of each field is shown in USD. This can come in handy when dealing with non-fiat cryptocurrency pairs. Huobi also has a field that shows the maximum trade size which lets you drag the size slider to the desired trade size value. This is a nice feature as it provides ease of use when trying to decide on how much of one crypto to trade for another.

The Huobi web platform is user-friendly and has a modern feel, all thanks to its clean and responsive UI.
Mobile Trading

Huobi has several mobile apps which are available on both iOS and Android. The Huobi Bitcoin app is the latest application which focuses on trading capabilities. It is also available for both iOS and Android devices.


The application, just like the web platform, follows several steps for user authentication. It offers both fingerprint and security patterns to its users. Even though the layout is a bit different when compared to the web platform, the features are pretty much the same.


Charts come with just six indicators. However, they are very robust and responsive, which makes the user experience quite smooth. It is quite easy to navigate the charts by pinching and zooming on prices.


The mobile application has another great feature, where, upon logging into the mobile app, the web platform favorite trading pairs cross over to the mobile trading app. The sync between the web platform and mobile app makes it convenient to trade your favorite cryptocurrencies wherever you are.

Conclusion

In conclusion, Houbi is a well-known exchange for a reason. It is a solid platform that can be used both while stationed or on the go. It offers some great features and has stellar reviews.