Learn Bitcoin Trend Following Strategies
A trader must create a bitcoin strategy which they stick to when trading the online btcusd market. A trader must have the discipline to follow the rules of their bitcoin strategy at all times. That's why it is better to come up with trading strategies which are profitable - profitable bitcoin trading systems will be much easier to follow & stick to. This is because a trader knows that by following the rules of their trading system they will be successful.
A carefully designed strategy which has been back tested & proven to produce profitable results is one of the keys to becoming successful when trading the btcusd trading market. This type of strategy will make it easier for the trader to follow the rules of their bitcoin strategy because they already know that the strategy is profitable, therefore maintaining the discipline to continue following the bitcoin system will be much easier.
Successful bitcoin trade strategies will also include:
1. Bitcoin money management guidelines
2.Bitcoin Trading Psychology Mindset
These two will greatly improve the success of any cryptocurrency trading system.
However, Let us look at bitcoin price action strategy before explaining more about bitcoin money management & bitcoin trading psychology.
Bitcoin Trend Following Strategies
Bitcoin Trend following strategies are based on first of all determining the overall market trend, whether the btcusd trading market is moving upwards or it is moving downwards. After determining the btcusd trading market bitcoin trend the trader will then only open trades in one direction.
Upward bitcoin trend - in an upward bitcoin trend bitcoin prices keep moving up, and here the trader will keep opening buy cryptocurrency trades.
Downward bitcoin trend - in a downward bitcoin trend bitcoin prices keep moving down, and here the trader will keep opening sell cryptocurrency trades.
There are various strategies of determining the btcusd trading market trends and the two most popular ones are:
Bitcoin Trend lines - traders will draw bitcoin trend line on the bitcoin price chart to determine the current general market movement. Once the bitcoin trend direction is determine a trader will then open cryptocurrency trades once the bitcoin price touches the bitcoin trend line or when bitcoin price is close to the bitcoin trend line. The trader will only open trades in direction of the trend.
When markets form trends, the bitcoin trend will have a lot of momentum and this momentum will mean that the bitcoin prices will keep moving in that direction for a period of time that lasts for quite some time.
Trading the bitcoin trend is one of the most profitable way to trade the btcusd trading market if a trader catches a bitcoin trend that has already formed they can make a lot profit just by trading in direction of the bitcoin trend and the longer the bitcoin trend stays the longer a trader can continue to make profits. Some major bitcoin trend might last for years and these can prove to be the most profitable setups especially when they last for years.
Moving Averages Strategies - Another bitcoin trend identification strategy is the use of the 20 day moving average, and when bitcoin prices are above this moving average the btcusd trading market is bullish and if bitcoin prices are below this moving average the btcusd trading market is bearish.
The 50 day moving average is also used for determining the medium term bitcoin trend, while the 200 day moving average is used to determine the long term bitcoin trend of the btcusd trading market.
Traders can also use 2 moving averages to form the moving average cross over technique, this method will have a shorter period moving average & a longer term moving average & these 2 will be use to determine the current market trend. For examples a trader can use the 5 day & 7 day moving averages, & for this strategy the bitcoin trend is upwards if both these moving averages are moving in the upward direction and the bitcoin trend will be down if both these two moving averages are moving downward.
This system will indicate the bitcoin trend is about to change one these two line cross over each other. This signal will be a god time to close trades if a trader has open trades.
Bitcoin Trading Strategies Tips
Once a trader has come up with their bitcoin strategy, they should also include the following so that to make their bitcoin strategy more successful.
1.Bitcoin Trading Money Management Rules
2.Bitcoin Trading Psychology
BTCUSD Trading Money Management Rules
Bitcoin money management guidelines should be part of your bitcoin trading strategy - these rules will help you as a trader to manage risk. This means that you will use the two rules of bitcoin trading money management - these are risk : reward ratio and draw down reducing method when placing your cryptocurrency trades to determine the lot size that you will open in the btcusd trading market. The most popular bitcoin money management rule use in cryptocurrency trading & the one that you should also add to your trading plan is the rule that says a trader should never risk more than 2% of their account balance on any one single bitcoin trade.
To learn & know more about these two bitcoin money management guidelines, traders should read the bitcoin money management tutorial that is on the learn bitcoin tutorials section of this website under the bitcoin trading key concepts lessons.
Bitcoin Trading Psychology Mindset
In order to become successful when trading the btcusd trading market a trader has to learn about bitcoin trading psychology. The bitcoin psychology or mindset that's required to become successful in bitcoin trading is one that avoids the emotions of fear & greed while trading the btcusd trading market and is a mindset of total discipline that a trader will follow all their trading rules & their bitcoin trading strategy & only trade with signals which are generated by their bitcoin strategy. With discipline a trader will not trade unless their bitcoin trading strategy gives a signal. A trader will have the mindset of only following their bitcoin system 100% all the time without second guessing the cryptocurrency system. A disciplined trader will also not place trades in btcusd trading market just because the btcusd trading market has started to move up or down, instead a trader will wait for a trading signal to trade to be generated by their bitcoin trading strategy.
In order to study more about bitcoin psychology & how to manage emotions while trading the online cryptocurrency market a trader can read the bitcoin trading psychology guides from the learn bitcoin tutorials section of this website under the bitcoin trading key concepts courses.
