When to buy and when to sell the cryptocurrency questions are not idle. From the points of entry and exit depends on whether you embrace the trend fully and don’t miss its profit by reducing the cost of the asset. Let’s begin on a simple definitions point of entry and exit based on support and resistance, which we discussed in the previous material.
We were told that when building the uptrend line, based on the two main points of price barriers and supported by the third trend. This third point will be the best point of purchase or of entry into the market. A similar situation with a downward trend, only here a third touch with the pricing line is a clear signal to sell the asset or the exit from the market.
Effective point of entry into the market is also considered a price breakout through the resistance level, when the momentum of the uptrend is just beginning to develop. To reduce the risks in such a situation it is advisable to enter the market via limit orders, thus it is necessary to pay special attention to the area of correction.
To adopt the rule that a corrective decline is rarely more than 38% of the last completed drop, and then often there is the rise of the price up. This zone is bounded by the last vertex and the point 38%, is a good time to buy.
If clearly there has been a reversal of trend and the market falls, that the chart may show a breakthrough of the support line, to sell the asset should be at minimum puncture above this line. In the early stages of the downtrend to catch such a moment is not difficult.
Another strategy of entry/exit to the market — buying or selling on contentrange. Often rising contratrend growing immediately behind the trend, turning it from resistance line to support line. When the price touches this line — it’s time to invest in the asset.
The reverse situation, when contraband breaks the support line, turning it into a resistance line, and especially if there are visible areas of correction, increases the chance of a successful exit from the market.
These techniques have proven themselves in marked positive or negative trend, but there is a way to earn and in the corridors of relative stability. Sideways trend can be profitable to fans of short term trading. To identify best point of purchase or sale, divide the area of the flat trend a horizontal line in the middle. The rise of the price above this line — a buy signal, and falling below the sale. This technique relies on the tendency of the market to rise or fall when crossing separating his half of the border.
If you have learned to determine how the news agenda affects the value of a particular currency, you can try to enter the market based on recent news. The subtlety here is that the market is not always clearly responds to world events, and we know several examples when the negative crypto news out of China investors were selling their bitcoins, without waiting for rapid growth in just a few hours. About the intricacies of trading on the news we will talk separately, meantime, recommend you to practice the described methods. Share with us your progress and watch for updates in the rubric “Analyze this”.