In the green and want to lock in your gains? Make sure to quit while you're ahead with these crypto take-profit strategies.

, creating endless opportunities for buying, selling, and taking profits when the time is right. While there's no magic formula for timing the market and knowing when to take crypto profits and get out or when to stay put, there are several tips and strategies you can employ to maximize your gains when taking profits in crypto.

If you're thinking of taking your crypto profits, but aren't sure how or when to do it because you lack the right crypto profit taking strategy, we’ve got you covered. From when to sell your crypto to maximizing your gains, learning how to take your crypto profits is fundamental to your trading success.

Taking profits is the deliberate act of selling crypto or another security in an effort to lock in gains after a period of appreciation. Unlike HODLing, it often involves regular trading and market participation.

The HODL strategy for taking profits in crypto also leaves a heap of coins on the table. Even more than with stocks and other investments, coins go through a number of peaks and valleys before arriving at a particular price. Investors who know how and when to take crypto profits can take advantage of these rises and dips and increase their pot by a substantial amount of coin, while taking profits along the way.

In addition to earning regular income and growing your crypto portfolio, taking profits in crypto will also help you avoid some common HODL pitfalls — one of which is buying the tops. Many new HODL investors make the mistake of buying at the end of a trend, which means they have to suffer through some turbulent price corrections and watch their coin decrease by 25 percent or more. This psychological hurdle is tough to overcome.

Most HODLers also don't know how to take crypto profits when the time comes. Since they have little experience, and no solid crypto profit-taking strategy to follow, HODLers often buy and sell at the wrong time, diminishing their potential profits.

By following a proven crypto profit-taking strategy, and understanding how and when to take crypto profits by utilizing both fundamental and technical analysis, you can master the markets and profit handsomely from the volatility crypto has become famous for.

Pros and Cons of Taking Profits in Crypto

Cryptocurrency is wildly volatile. Unlike 

or stocks, double-digit gains (or losses) are a common occurrence. In fact, it's common to see your account jump up or down by two percent just minutes after hitting the buy or sell button. Taking profits in crypto by following a proven crypto profit-taking strategy will let you take advantage of these opportunities, and outpace a HODLer in no time at all.

Pros of taking profits in crypto are as follows:

• Earn revenue while growing crypto holdings

• Take advantage of every market condition

• Learn how to take crypto profits and become an expert trader

That said, taking profits in crypto can be challenging if you don't know how and when to take them. Fortunately, developing a strong crypto profit-taking strategy isn't very difficult once you understand support and resistance, Fibonacci levels, pivot points, and other key fundamentals of 

Without proper understanding of these trading basics, however, the odds of becoming a successful trader and being able to take profits are greatly reduced.

• Requires an understanding of technical analysis

• Must follow a proven crypto profit-taking strategy

Many newer crypto investors and traders have a hard time deciding when to take crypto profits. While knowing precisely when to enter and exit a trade largely comes down to understanding price charts and technical analysis, there are a few general signals to watch for.

Another good example of when to take crypto profits is when the price of Bitcoin or another crypto you're vested in stagnates and loses upward momentum. This usually leads to price consolidation, which should serve as a possible exit signal in your crypto profit-taking strategy. However, you should wait for confirmation from another indicator prior to placing a sell order.

Similar to a change in fundamentals, your crypto profit-taking strategy should also account for changing or uncertain macroeconomic conditions. Events such as wars, pandemics and recessions can have a significant effect on the stock, commodities, FX and crypto markets. Any of these can cause major market disruptions, and can give clear signals for when to take crypto profits rather than watch them disappear.

Deciding when to take crypto profits based on fundamentals or macroeconomic conditions is one thing, but determining exactly 

 to take crypto profits is quite another. Do you set a random take-profit after a certain percentage gain, or should your crypto profit-taking strategy involve taking profits in crypto at certain areas of resistance — or by utilizing 

 and Fibonacci levels? Smart traders use all of the above.

At some point, every trade has an exit. Entering a trade is easy, but where and how you exit determines how much you profit — or lose.

When taking profits in crypto, trades can be closed according to a crypto profit-taking strategy involving the use of trailing 

 and profit targets when specific conditions are met.

Depending on your crypto profit-taking strategy, the profit target can be a specific price target or a percentage-based target. Regardless, when the price of the crypto reaches a predetermined level, the trade can be closed either manually or automatically by entering a specific target profit during trade execution.

For example, if you purchase Bitcoin at $31,710 and have a profit target of two percent, you would place an order to sell at $32,344. If the price of Bitcoin reaches this target level, the trade is closed. In a nutshell, that's how to take crypto profits with price targets.

Taking profits in crypto with this crypto profit-taking strategy also allows you to calculate a risk/reward ratio prior to entering a trade. To do so, you need to enter a stop-loss, which should ideally represent less of a price change than your profit target. This way, the reward will outweigh the risk.

Although you can never know 100 percent whether a trade will be a winner or a loser, you'll be more likely to turn a profit when your reward is greater than your risk. For instance, if your average winning trade is $11 and your average losing trade is $6, you only need to win around 40 percent of your trades to earn an overall profit.

Taking profits in crypto by utilizing profit targets as part of your crypto profit-taking strategy also makes it possible to tell whether or not a trade will be worth taking. If the risk is greater than, equal to, or even not considerably less than the profit potential, then the trade isn't worth taking — and you should wait or move on to the next opportunity. In this way, determining a profit target can actually help you filter out poor trades.

Many traders use technical analysis to identify entry and exit points in order to maximize profit and minimize risk. While there are hundreds of technical indicators, chart patterns and tools you can use to analyze crypto charts and zero in on key entry and exit points, there are a few strategies in particular worth considering.

• Paying attention to areas of support and resistance

Anyone wondering how to take crypto profits who’s interested in regularly taking profits in crypto should master these three strategies.

, should be a part of any crypto profit-taking strategy. When looking at the price chart of any crypto in almost any time frame, you'll notice certain areas where upward momentum seems to halt. These are known as resistance areas. Conversely, you'll also see certain areas where downward momentum is stopped or reversed. These are known as areas of support.

Both areas are key. Whether you have an open buy order or sell order, keep your eye on these key areas and consider exiting the trade and taking profits in crypto whenever the price nears. While the price will break through either support or resistance if the momentum or trend is strong enough, more often than not crypto prices will react and bounce off of these areas in the opposite direction.

 are equally important when learning how to take crypto profits. Why? Well, the crypto market naturally tends to push prices toward the various Fibonacci levels. By paying attention to these levels — especially retracements — and checking them as a part of your crypto profit-taking strategy, you'll gain the upper hand when it comes to taking profits in crypto.

When learning how to take crypto profits, understanding pivot points is also a must. Similar to Fibonacci and support and resistance levels, it's quite common to see price react to pivot points.

Pivot points are calculated to determine specific points where market sentiment shifts from bullish to bearish. Day traders, in particular, use pivot points for determining entry points, stops, and levels for taking profits in crypto.

At the end of the day, pivot points should be viewed as intraday technical indicators. Due to their ability to identify trends and reversals, calculating pivot points is a must when learning how to take crypto profits for maximum gain.

Regardless of the crypto profit-taking strategy used, taking profits in crypto largely depends on one's risk appetite and investment timeline. If you have years to wait before seeing a return on your Bitcoin or other crypto investment — and the nerves of steel needed to wait out huge market dips and price corrections — then HODLing may be the right crypto profit-taking strategy for you.

If you're like most people, however, you want to see some profits and a return on your investment as soon as possible. You don't want to wait till years down the road; you want your venture into crypto to pay out right away, again and again. Chances are you also don't have the stomach for large downswings and seeing your account in the red. If this sounds like you, taking profits in crypto is definitely the right move.

Sure, taking profits in crypto takes practice and some time spent learning when and how to take them. However, by investing a little time into learning how to execute the right crypto profit-taking strategy, you can multiply your potential gains, allowing you to grow your crypto portfolio much faster and begin enjoying the fruits of your labor.

Reinvesting the Profits You Take in Crypto

After taking profits, many crypto investors choose to keep a portion of those profits, and reinvest the rest back in the crypto they just sold. They do this by selling high when the price begins to stall and consolidate, and then they wait for it to rebound off of a pivot point, support level or Fibonacci level before placing another buy order.

By actively trading and reinvesting your profits in this fashion, you can earn substantially more than you could by simply buying and HODLing for years, months, and even weeks or days. However, doing so and becoming consistently profitable takes fundamental knowledge of the markets, the right crypto profit-taking strategy, and the ability to stick to the strategy or adapt to market conditions as needed.

Another option is to employ strategies that allow you to build up your portfolio of principal coins, while investing in other ICOs and innovative coin projects. By going this route, you aren't just transferring Bitcoin into dollars and into your bank account for spending. Instead, you're reinvesting it into newer coin projects and technology with much more upside potential.

For example, if you traded 0.10 Bitcoin (BTC) and converted it into 0.20 BTC, you could reinvest the 0.10 BTC you earned as profit into a new type of coin or ICO — perhaps with the potential to provide a 50x or 100x return. If your gambit is successful, you would be an early investor who’s able to reap substantial rewards.

This crypto reinvesting strategy is ideal for investors looking to build their portfolios with a variety of high-return coins without taking too much risk. Both of the above strategies, however, offer amazing return potential and solid protection from future losses. Each also allows you to gain from the volatility of crypto, and from the nearly constant emergence of new coins and crypto technology and services.

As you can see from the examples above, as well as from thousands of crypto success stories, the right trading strategies can help you make money with digital currencies time and again. However, before you even begin thinking about taking profits in crypto, you must get used to recognizing certain cryptocurrency signals or "tells" in order to know when to buy and when to bail. The more experience you gain and the more you learn about how these unique assets work, the more profits you can expect to take.

Intermediate

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Crypto Take-Profit Strategy: When and How to Take Profits

Fearful of price weakness and bearish sentiments? Make sure you spot the upcoming bearish reversal with the Bitcoin death cross pattern.

 and other cryptocurrencies as long-term assets to buy and hold with the expectation of appreciation over time. Others take a more active approach, and regularly buy and sell cryptos by studying the charts, reading the markets, and identifying telltale signs of reversals in price momentum and profit opportunities.

The Bitcoin death cross is a chart pattern formed whenever the 50-day moving average crosses over and below the 200-day moving average, signaling a long-term downward swing in price momentum.

Bitcoin’s 50-day moving average is nearing its 200-day moving average and is now at its closest point since 2015. A crossing of the two lines would signal fresh weakness and a move technical traders have dubbed the crypto “death cross.” If you’re wondering about a crypto crash, along with many other current traders and investors, a Bitcoin death cross may provide the answer.

The Bitcoin death cross pattern is formed using the 50-day and 200-day MAs, and with these longer time frames the MA lines are affected less by short-term price movements, and more by long-term sentiment. In other words, they tell you what the general tone of the Bitcoin market is. Of course, these MAs and the death cross pattern can be used for other cryptos as well.

The 200-day MA is plotted according to a much longer time frame than the 50-day MA. This means the 200-day MA tracks short-term prices less closely than the 50-day MA. So when the 50-day line crosses below it to the downside, it indicates short-term momentum is declining against the last 200 days. In many cases, this translates into a reversal of the long-term price trend. The crossing and growing divergence of these two MA lines is known as the Bitcoin or crypto death cross.

While this chart pattern can signal trouble for long-term Bitcoin (and other) crypto investors, others often see it as an opportunity to profit from the shift in momentum — or to bring out their “inner Warren Buffett” by buying low and acquiring the asset at a discount. As he once famously said, “When there’s blood in the streets – buy.”

You already know that a death cross occurs when the 50-day MA crosses below the 200-day MA. However, death crosses form in three stages, and understanding these stages will help you not only spot a Bitcoin death cross when it occurs, but prepare for it by anticipating it — and ride it out until momentum shifts back into buy territory.

The three main stages of a crypto death cross include:

Price action always consolidates after an upswing. Sometimes, it breaks out and continues trending upward. However, in other scenarios, the price turns sharply lower and breaks from the uptrend. This consolidation period provides the very first clue to a possible Bitcoin death cross and upward trend reversal. During this stage, the 50-day MA is almost always still above the 200-day MA.

At this crucial stage, the 50 MA crosses underneath the 200 MA, creating the Bitcoin death cross and a bearish backdrop for the crypto market. Some interpret the death cross as a precursor to an eventual buying opportunity; some see a selling opportunity, and still others wonder if crypto will crash, choosing to remain on the sidelines.

At this final stage of the crypto death cross, price action continues to advance lower as the two moving averages diverge, often resulting in a new downtrend. In a strong downtrend, the 50 MA will act as dynamic resistance and the price action will remain below the 50-day MA for several periods.

Pros and Cons of Analyzing Death Cross Patterns

As is the case with so many things in life, each side has its merits. The Bitcoin death cross is one of the most powerful chart patterns, but it does have its limitations. Nonetheless, it’s used by seasoned analysts around the world, and widely considered a key signal for the current and future momentum of Bitcoin and other cryptocurrencies. Let’s look closer at the almighty crypto death cross and the arguments made by both sides.

Pros of Analyzing Bitcoin Death Cross Patterns

• Indicates long-term change in trend direction

The death cross owes much of its popularity to the pattern’s proven track record of accurately predicting major corrections and downtrends. According to Bitcoin’s chart, the crypto death cross has appeared a few times in Bitcoin’s history, and each time the price has dropped right on cue.

While some death cross patterns end up reflecting larger downturns than others, they all result in significant median losses the following month. Imagine having sold when a death cross formed prior to “Black Tuesday” in 1929 — or even when the last Bitcoin death cross formed in 2020. As a result, you would have been spared from some serious volatility and losses.

In addition to their soothsayer-like abilities, crypto death crosses are also fairly easy to understand, identify and use. Even those who are new to charts and technical analysis can add the pattern to their trading toolbox.

Cons of Analyzing Bitcoin Death Cross Patterns

There are some terrific technical indicators, but none of them are perfect. Despite the Bitcoin death cross’s track record and popularity, it is a technical indicator — and thus has a few flaws.

The death cross is also what technical traders refer to as a “lagging indicator.” This means it lags behind the price action, often showing what has already occurred.

By the time a death cross takes shape on your charts, the bearish momentum might already be a thing of the past. This could give you a false sell signal, which is why other technical indicators should also be used in conjunction to confirm any crypto death cross, should one appear.

A crypto death cross and a golden cross are exact opposites. One occurs when the 50 MA breaks below the 200 MA, and the other when the 50 MA breaks above the 200 MA.

A Bitcoin death cross implies a long-term bear market has arrived, while a golden cross signifies the emergence of a long-term bull market. So, both popular chart patterns indicate a strong confirmation of an extended trend — just in different directions.

Crypto death crosses have proven themselves as reliable trading signals for long-term investing strategies. However, if you like trading crypto more actively, they also represent reliable selling opportunities.

Nonetheless, not all death crosses are created equal. With stronger ones, the 50 MA can break sharply below the 200 MA and just keep on going for days, weeks and even months on end. With weaker ones, the price can continue tracking downward slowly for a short period of time before reversing back into a golden cross.

The key is using the right strategy and combination of indicators — not only to help confirm when a downtrend is occurring, but to give insight into the strength of the trend.

Despite its historical accuracy, relying solely on the death cross pattern can end up being a losing strategy. The answer is in combining the strategy with other key indicators. If the signal is confirmed by most or all of the other indicators, then you may have a winner, or rather a loser, on your hands.

Not sure which indicators to use with your Bitcoin death cross strategy? There are certain indicators most experts recommend.

After identifying the formation or possible formation of a death cross, you should expect a bearish trend change and a sharp turn for the worse. To confirm your suspicion, you need to turn your attention to another key indicator: Trading volume.

If the trading volume for Bitcoin or another crypto is high whenever a death cross forms, you can expect a much more reliable bearish signal. High volume is indicative of a big trend change in the works. After all, crypto trading is largely psychologically motivated.

If the RSI indicates Bitcoin is overbought and there’s a death cross as well, you can almost certainly expect the end of the bull run — and bearish time ahead.

Any score above 20 classifies as high, but if the score is 30 or more and a death cross is present, the question isn’t, “Will crypto crash?” — but rather, when.

Technical analysis can look a bit like hieroglyphics to the uninitiated, but patterns like the Bitcoin death cross aren’t very hard to grasp or spot when you put a little effort into studying them.

Today, we’ve learned all about the vaunted death cross. You now know when it’s time for a sell-off and to hit the door. However, don’t stop there. Learning more about the golden cross and additional chart patterns can prepare you to profit in any market conditions.

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Bitcoin Death Cross: How to Gauge Growing Price Weakness in Crypto

Unsure of whether to HODL or take profits? Why not use the Bitcoin rainbow chart as a fun and informative way of gauging long-term price movements.

Knowing when to buy or sell cryptocurrency is always going to be tricky and requires ample research into recent trends, as well as the state of your preferred currency. Looking at past pricing trends can be helpful when making future investment decisions. In 2014, a crypto rainbow chart was created for 

 to highlight the evolution of Bitcoin’s price. This chart has been used by many BTC investors to predict when the market may enter 

territory. The following guide takes an in-depth look at the Bitcoin rainbow chart and when you should consider using it.

The Bitcoin rainbow chart is a basic logarithmic regression chart that denotes how the Bitcoin price has evolved over time. This crypto rainbow chart uses colored bands to indicate when it may be time to buy, sell or hold.

The first component of the Bitcoin rainbow chart was created in 2014 by 

. At this stage, the rainbow color chart was placed online to show the Bitcoin trending price. This chart was only designed to be a fun and interesting graphic that other Bitcoin investors might enjoy taking a look at. Because of how colorful and surprisingly accurate the chart turned out to be, it was given the name "Bitcoin rainbow chart."

Later that year, a logistic model known as logarithmic regression was introduced by a 

. This statistical model indicates a situation where decay or growth accelerates rapidly at the beginning before slowing down over time, which is a trend that many cryptocurrencies adhere to. Once the algorithmic regression was applied to the BTC logarithmic chart, the rainbow had a curve to it. At the beginning of the chart, the curve rose sharply before beginning to eventually level out.

Even though the Bitcoin rainbow chart isn't meant to be predictive, it has remained relatively accurate since it was created. The rainbow consists of nine separate bands of colors with blue on the low end and red on the high end. When the Bitcoin price decreases, the line starts moving toward the blue color band. An increase in pricing pushes it toward the red color band. Despite using nine bands of different colors, the chart initially displayed three captions that read:

 eventually improved this crypto rainbow chart by adding captions to each band for a more precise understanding of when to buy, sell or hold.

Even though the BTC logarithmic chart has always been popular among Bitcoin traders, this indicator has increased considerably in popularity over the past six months or so, which is when BTC prices began nosediving and essentially halved in value. This price movement lines up with past Bitcoin trends. In 2013, Bitcoin reached a high value of $1,237 before dropping sharply to around $112 over the next few months.

Nearly four years later, Bitcoin reached a peak of $19,345 toward the end of 2017. BTC value would drop to just $7,500 over the next few months. Another four years later, Bitcoin reached a value of just under $70,000 at the end of 2021. Its value almost immediately dropped and now sits at around $30,000.

As mentioned above, the Bitcoin rainbow chart consists of nine distinct bands with different colors. These bands are put together to create a rainbow. In this specific crypto rainbow chart, the nine bands are referred to as:

Since a logarithmic regression model was added to the Bitcoin rainbow chart, traders can use it to better understand crypto price movements and what they mean. This chart is based on a natural logarithmic curve that displays various hues for the purpose of helping traders know how to time entries and exits.

The horizontal view of this crypto rainbow chart chart shows the date, while the vertical view highlights the Bitcoin price. Even though the logarithmic regression model was added to the BTC logarithmic chart in 2014, it has been correct up to this point.

Because of how the logarithmic regression model indicated a sharp increase toward the beginning before an eventual flattening of the curve, the red band was already at a price of $620 by the beginning of 2014. By 2021, this band indicated a value of $114,000. Bitcoin was subsequently priced at $36,000, which placed it close to the center of the Bitcoin rainbow chart.

Pros and Cons of the Bitcoin Rainbow Chart

The main benefits of this crypto rainbow chart are as follows:

The various issues associated with using this chart to make investment decisions include:

If you want a foolproof way to make investment decisions on buying or selling Bitcoin, the truth is that doing so is practically impossible. While the Bitcoin rainbow chart has proven to be an effective measurement of market changes and volatility since it was created in 2014, it's not an indicator of future Bitcoin prices.

While crypto rainbow charts like this one shouldn't be the only thing you use to inform your future investment decisions, the info you obtain from looking at long-term price movements can help you gain a better understanding of the volatility for a specific crypto.

The exceedingly high price of Bitcoin means that any fluctuations are going to appear substantial. A 1% drop in Bitcoin’s current price would amount to a reduction of $300. This specific chart shows that the BTC price enters the bull market peak approximately every 3–4 years. These trends may indicate the same for the future, which could allow you to make predictions on BTC price movements.

Combining Indicators for Improved Accuracy

RSI allows traders to identify when an asset’s price isn't close to its "real" value, which gives traders the opportunity to make investment decisions before the market responds accordingly. The RSI indicator displays a value ranging from 0–100.

This value is shown on a chart via a wave pattern. If the RSI ever rises above 70, this indicates that Bitcoin is being bought too heavily, which means that it's a good time to trade before the price drops. The indicator you use largely depends on what type of trader/investor you are. If you want to attempt to perfectly time the market, both the RSI indicator and the BTC logarithmic chart may give you the data you need to "predict" price trends.

Overall, the Bitcoin rainbow chart or any other display of logarithmic regression can only be helpful up to a certain point. Understanding the long-term trading indicators and price trends associated with Bitcoin and other cryptocurrencies will invariably make you a more knowledgeable investor. However, past price movements don't necessarily correlate with future performance. If you decide to use the Bitcoin crypto rainbow chart, make sure that it isn't the only tool you use when investing.

Beginner

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Bitcoin Rainbow Chart: Logarithmic Regression and BTC Price Movements

Scalp trading in crypto is not identical to forex trading despite the conceivable concept. Learn the pros, cons & best scalping strategies.

Cryptocurrencies are generically possessed with a high level of volatility. But they offer traders numerous ways of making profitable returns. Those who don’t shy away from risky strategies and devote most of their time to monitoring price movements favor scalp trading or refers to scalping as one of the preferable options.

This article will discuss what scalp trading is, how it works, and highlight some of the scalp trading tips to help you build a strong crypto trading foundation for your benefit. 

Scalp trading or scalping is a short-term trading strategy that a trader adopts to make frequent small profits from small price movement each day. With small profits from each trade adds up, it can generate a substantial amount over time.

Scalping is also a popular trading strategy in the cryptocurrency market due to its highly volatile nature. Scalpers often uses leverage to open more trades along with tight stop losses to manage risk.

Forex or crypto traders utilize this strategy through a quick response to market movements. As opposed to holding a position for some hours, days, or weeks, a scalper tends to react within minutes and sometimes even seconds. Consistency and speed are the main factors that determine the results.

Scalping requires high volatility of the chosen currency pair. Significant movements in price facilitate generating profits, though scalpers more often utilize short-term bursts of volatility. When comparing scalp trading with 

, scalp trading involves relatively low risks and provides yields on the spot. But the results highly dependant on a trader’s perseverance, self-discipline, and large capital amounts to gain substantial success.

How Does Crypto Scalping Generate Profits?

Each trader formulates a personal trading system to receive the highest possible profit, but some basic trading principles are shared and used to some extent by any traders. The scalping method derives based on real-time technical analysis as the trader minimal time for fundamental market analysis.

On average, scalpers open positions approximately once every 5-10 minutes. While the M5 timeframe is considered the most preferable as it works with most strategies and is amenable to analysis, thereby increasing the predictability chance.

There are entirely two different approaches to crypto scalp trading— 

. To fully comprehend manual crypto trading, a trader must focus on the market movement diligently and continuously monitor the trades. To profit from an exchange, traders need to track the market movements to open and close the positions in time. 

On the contrary, an automated trading system implies that scalpers create a unique program to support their defined strategies. This program is designed to mitigate risks and perform the trades while traders are away from their desks.

In most cases, a scalper has to make a trading decision on a specific asset without having time to think about the transaction. At this moment, intuition is the only adviser. Such an approach is called 

, and it requires profound experience in trading, analytical abilities, and an excellent understanding of the market.

The concepts of forex and crypto trading possess similarities in which both of these trading types shared a parallel operation with a kind of currency. Their primary features seem to be similar as well. Here’s the overview:

Any novice traders would assume forex and crypto are nearly identical. However, the truth tells that they boast disparate purpose and intend. In contrast to cryptocurrency, the forex market is older, and it is accepted and recognized universally.

While the crypto market is relatively new, volatile, and the price fluctuations are considerably tense. Hence, this led to a more pronounced discrepancy in their performance:

Every scalper needs to thoroughly understand their scalping activities. That’s why it’s best to hold onto a specific strategy, avoiding unnecessary decisions and breakdowns. There are five well-known scalp trading strategies that any beginner to advanced crypto trading can implement right away.

The term “range” means a price movement between two consistent price levels, high and low, within a certain period of time. When crypto traders are range trading, they tend to go in both long and short at different times, depending on the price’s position within the range.

When a trader identifies the ideal range to trade, they’ll attempt to enter positions manually by buying at support and selling at resistance. Alternatively, scalpers can deploy limit orders to long (buy-in) crypto. This is best done at a lower entry price within the range in a favorable direction, and once the market reaches the support level. Scalpers can trade ranges when markets are flat.

 is the difference between the asking price and the bid price. Its primary purpose is to allow scalpers to open a position at the bid or ask price, and then close the position fast — a few points lower or higher — in order to reap a profit. However, in scalp trading, the bid-ask spread can happen in two scenarios:

When this happens, the asking price will be higher, and the bid price is significantly lower than usual. The probable cause of this scenario is that there are more buyers than sellers. Naturally, prices will surge, causing crypto scalpers to sell. 

When buyers outnumber sellers, the asking price will be lower, and the bid will be higher than usual. Scalpers deploy this strategy to expedite the buy-in frequency, hence balancing out the selling pressure. 

Arbitrage is effective when applied to crypto trading because of the market’s inherent volatility. This type of trading occurs when a trader gets their profits from the difference in the same asset prices by buying and selling it in different markets. An arbitrage scalper does both nearly simultaneously. 

, you can trade on either spatial arbitrage or pairing arbitrage.  A spatial arbitrage trader can open a long position and a short position at different exchanges simultaneously. In this way, the trader hedges against fluctuations of various trends. Pairing arbitrage, on the other hand, is suitable for only one platform. Traders capitalize on a trading pair’s changes, for instance shorting the main crypto of the 

This method is based on a study of the asset’s price movement. A trader needs to see it and interpret it. Scalping the markets with price action doesn’t differ much from trading with other price action strategies.

 trading uses a third party’s funds instead of your own to enhance potential gains. This allows traders to operate with higher amounts and to obtain greater profits as a result. On the other hand, some traders invest using 

 in the cryptocurrency market. Some cryptocurrency exchanges also offer margin funds to their customers. This can improve a scalper’s results because scalping requires large capital for success.

Some of these strategies are riskier than others. Try implementing each of them to find which one works best for you.

The scalping time frame is how you achieve “trading velocity,” or the number of trades made. Ideally, the best time frame for scalping should range between 5- to 30-minute charts. The smaller the time frame, the greater the number of possible trade setups. Note that this should depend entirely on the strategy you choose for scalping.

Here’s an example using BTC/USD. We’ve used a 5-minute chart with the moving average (MA) indicator as our trend indicator and the stochastic oscillator for momentum.

In this example, a scalper has six potentially profitable trades in about 7 hours, with each trade lasting no more than 30 minutes.

And that’s the beauty of scalping in crypto! You can collect several profitable trades within the day in which cumulative profits are significant. 

Although scalping can be a profitable trading strategy, it comes with its fair share of drawbacks, the largest one being transaction cost. Crypto trading is notorious for its high trading fees, which can significantly reduce overall profits. 

Scalpers need mental toughness to cope with the fast-paced and high-pressure crypto scalping routine. Ultimately, this both requires and ensures that they stick to their strategy and keep their emotions out of their trading.

For day traders, scalping can be fast-paced, exciting and confusing — all at the same time. We’re going to break down crypto scalping in the simplest way possible. 

At its core, scalping involves trades that are usually only held for a few seconds to a maximum of a few minutes. Naturally, the goal of any trading strategy is to make as much profit as possible. However, the primary objective of scalping is to make the most profit from the shortest price fluctuations. And thanks to the volatile nature of cryptocurrencies, scalping has proven to be one of the best trading strategies. 

A good crypto scalper needs to respond instantly to price fluctuations in order to make sustainable profits. For this reason, scalping revolves around three critical elements:

Typically, scalpers don’t concern themselves with fundamental analyses, instead of relying heavily on identifying short-term 

. They read crypto price charts, combined with technical analysis — 

 technical analysis. If you aren’t well versed in TA, scalping might not be for you. On the brighter side, you can hone your 

Keep in mind that the objective of scalping is to get as much profit as possible in a short time. That means perfect timing of entries and exits is key. You have to get into a trade at the beginning of a trend, and exit when that trend weakens. The ideal setup for crypto scalping is often a combination of technical and momentum indicators. These enable you to identify the direction (trend) of the crypto pair and the magnitude of the observed trend. This is how you achieve consistency.

While you might understandably be tempted to use several of these indicators, your trading accuracy isn’t bound to improve. Rather, you’re guaranteed to have analysis paralysis from the conflicting signals.

The Moving Average indicator demonstrates the average value of the asset calculated over a specific period. As a result, a scalper gets an idea of where the asset price is moving.

This technical indicator determines the strength of the price trends and the possibility for their change. Signals are generated by finding divergences and failure swings. RSI is a great tool to identify the general trend.

The concept is based on extreme price points. The support is the point where the price stops falling and begins to move up, and the resistance is the point where the price stops rising and begins to move down.

In addition to the analysis tools described above, a trader can obtain information from the price movements themselves displayed on the candlestick graphs.

If you look at the candles, you may see some obvious patterns repeatedly in some parts of the graph. These are regular and repeated combinations of data on prices, amounts, or indicators. They can build an understanding of trends and predict further price movements. The most popular patterns are 

 chart patterns. They are the most recognized and often used so that they can facilitate your trading decisions.

How to Set up a Crypto Scalping Trading Strategy?

If you are a newbie in crypto scalping, don’t be afraid and have a try. You can achieve success if you follow some simple rules.

There are a lot of useful tools that are indispensable to successful trades. They can be either free or paid, though the paid ones are more functional and more helpful overall. Among the tools that you can make the best use of are the following.

 are the most popular type of software designed for traders. This is a program that performs automated trading on predefined criteria through thoroughly set instructions. A trader can trade continuously, even benign, while the chances for success enhance and the possibility of errors minimizes. 

 are popular bots for crypto trading that support scalping.

APIs ensure your interaction with trading platforms and other blockchain-based projects. They provide users with an extensive range of functions like wallet integration, transaction support, market prices tracking, and more.

It is impossible to scalp without analyzing the trading charts. Price and volume charts give all the necessary information, and it is impossible to set up a strategy without it. In addition to trading charts, relying on the tools like a stop-loss is ideal to help you make a logical decision.

Any trading has its advantages and disadvantages, and scalping is not an exception. Look at the pros and cons list before you start scalping.

Crypto scalp trading style involves low risks as smaller positions size are engaged in the process. It is easier to achieve success as small price movements occur more often. Also, scalp trading can be easily automated as it is usually based on technical criteria that can be calculated.

This type of trading requires the fastest possible reaction; any delay is crucial. In general, scalp trading can be demanding and aggressive; crypto scalping especially can be exhausting for unprepared minds. The profit for each trade is too low, so a more considerable capital is needed to achieve substantial results. Finally, trading costs are higher as the trades are numerous, and it is necessary to pay trading fees every time.

Of course, it is not. If you are a beginner who just dipped the toe in the crypto industry, it’s best for you to try something less risky. Perhaps, we recommend investing in cryptocurrencies in the mid to long term. However, if you’re feeling confident and ready to embrace the trades of art, crypto scalp trading is a good start. 

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Scalping: 5‌ ‌Best‌ ‌Profitable Crypto‌ ‌Scalp‌ ‌Trading‌ ‌Strategies‌

Can the current sky high prices of speculative cryptocurrencies really go higher? Learn how to manage your risk with the greater fool theory.

Around the world, global markets have been awash with liquidity as central banks and governments promote quantitative easing. In some cases, central banks are 

 in purchasing market securities. This flood of money has generally led to higher asset prices across markets, with 

. Higher asset prices can also be attributable to the greater fool theory, as investors keep selling overpriced assets to other investors (the greater fools). In this article, we’ll examine the greater fool theory and evaluate whether it’s a sound investing strategy.

The greater fool theory states that investors in a bullish market can earn positive returns by betting on an asset without regard to its fundamentals, because someone else (a “greater fool”) will buy it from them at a higher price. 

Investors acting in accordance with this theory ignore intrinsic valuations and fundamentals of assets — even if those assets are overpriced — because they expect to profit when another investor (the greater fool) is willing to pay even more. 

What drives a friendly fool to snap up these overpriced assets, sometimes to their disadvantage? Take meme coins, for example. A crypto wallet that bought $8,000 worth of 

 tokens last year is currently valued at $5.4 billion. The meme cryptocurrency hit a new all-time high on the 28th of October 2021 — a price appreciation of over 2,000,000% since the wallet bought the first Shiba Inu. For a token that originally started as somewhat of a joke, Shiba Inu may seem incredibly overpriced. It’s hard to argue that the pricing is in line with any intrinsic value. 

These meme coins thrive on internet-fueled hype, and on the fear of missing out (FOMO). They typically have a sturdy army of devoted followers who popularize the tokens and create a cult-like following online. Once an asset price starts to pump, and more people recount how much profit they’ve made, those who haven’t yet bought jump on the bandwagon, no matter how irrational it may be to do so.

Multi-level-marketing schemes (MLMs) are real-world examples of the greater fool theory in practice. Existing members of MLMs are rewarded by selling products to new members they find, who in turn have to find more fresh buyers. 

A speculative bubble is a sharp increase in asset prices far above what its underlying fundamentals can account for. This situation usually happens because of an exceedingly optimistic outlook about an asset’s price for the future. The speculation and resulting activity which follow push trading volumes higher. As the exaggerated expectations draw in more investors, demand exceeds supply, pushing the price increasingly beyond the asset’s intrinsic value.

Eventually, the bubble bursts, and the asset comes crashing down as investors panic and sell their positions. The greater fool theory is the underlying principle behind speculative bubbles — and it’s also what keeps them going.

Pros and Cons of Using the Greater Fool Theory