How to Read Crypto Charts Like a Pro

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While rewards can stack up quickly, margin trading can amplify losses, sometimes to a factor of two or more. Savvy investors will have planned for the worst-case scenario, a margin call, in the event that they suffer (and must necessarily weather) temporary losses if the market moves against their position. If margin trading amplifies gains, it also amplifies losses and traders can find themselves losing more than their initial investment in addition to having to pay interest on their loan, which can add insult to injury. When using cross margin trading, a trader’s balance is shared in its entirety across all open positions, the point of which in this case is to avoid liquidation.

During these periods, the bulls and bears are fighting to decide the market direction, but neither group is in control. Mean reversion strategies have the best risk-adjusted returns when the level of market noise is high. Long-only mean reversion strategies often struggle in bear markets, especially if there is a price crash. The regime filter is designed to filter for the most optimal times to trade. Our strategy takes a position directly proportional to the trading signal. When the price is expensive, the strategy should be selling to take profit; when the price is cheap, the strategy should be buying to take advantage of the discounted prices.


Below we will cover the main building blocks of strategy development, all of which are crucial to understand before creating a trading system. Founded in 2019 by Moritz Putzhammer and Christopher Helf, VortexValor exists to ease most retail investors’ pain of not knowing how to invest their hard-earned money and not having access to a personal wealth manager. Unfortunately, the opposite can also be true, which is one of the reasons why many recent crypto investors have been left in the cold by the prolonged crypto winter, holding stacks of depreciating cryptocur…

Due to this unfavourable result we immediately remove XRP from our universe. For margin traders seeking an exchange without KYC, then ByBit should be at the top of your list. Born and raised in China (so to speak), Bybit started out in March 2018 as a little-known derivatives exchange, but has quickly transformed into a Singapore-based trading giant. With co-founder and CEO Ben Zhou at the helm, the exchange achieved a peak trading volume of $54 billion in May 2021, although it currently sits around $10 billion a day. Kraken’s website is the best source of information regarding the various fees related to margin trading, as these can be updated regularly. With over 4,000 cryptocurrencies available to investors, and more in the offing each day, any list will be incomplete by definition, but below is some data to whet your appetite.

Also, keep in mind that anyone can create a yield farming dApp for the purpose of scamming unsuspecting investors with abnormally high yields, which is why it is so important to carry out thorough due diligence before farming your crypto. A rug pull scam refers to a fraudulent practice in which a project or protocol team deliberately drains liquidity or removes user funds from a project, resulting in losses for investors. In yield farming, rug pull scams can occur when a project offers abnormally high yields and attractive incentives to investors, only to have the project’s founders disappear or execute an exit scam. The allocation percentages can be adjusted based on an individual’s risk tolerance and investment goals. It’s important to note that diversification doesn’t eliminate risk completely, but it can help to reduce risk by spreading investments across different assets that are not highly correlated.

Periods of compression are often followed by breakouts and high volatility, which is not usually suitable for reversion strategies. During periods of price compression, the future volatility can be underestimated, leading to the strategy taking too much risk. The regime filter also avoids trading when there is a long-term downtrend.

  • Stefan is a quant with more than 6 years experience in the finance industry.
  • You can also diversify by owning cryptocurrencies and their respective blockchains that are used in various industries or sectors.
  • This again increases the fees as the investor will have to foot the bill for electricity and internet costs.
  • As the largest centralized cryptocurrency exchange in the world in terms of daily trading volume, Binance is one of the most popular choices for beginners looking to test the crypto waters as well as for experienced cryptocurrency investors.
  • Central banks are stuck at zero and higher interest rates aren’t likely to come to the fiat markets any time soon.

However, most crypto enthusiasts start investing in cryptocurrencies without an investment strategy, preferring instead to use an ad hoc approach that tries to time the market for that perfect time to buy (or sell). Even seasoned day traders can struggle to predict the best trade entries and exits, which is why the most successful ones rely on automated crypto trading. VortexValor’s Marketplace is a cutting-edge investment platform that brings together expert crypto trading bot creators and investors for mutually beneficial purposes. One of the easiest ways to gain exposure to the crypto market while also minimizing risk as well as the amount of time spent managing your portfolio is by renting automated investment strategies. It’s basically a form of copy trading in which you effectively let expert traders do the heavy lifting for you while you sit back and evaluate the performance of their custom trading bots. The most significant difference between trading and investing is the time horizon.

It’s also important to note that every market has experienced a downturn in 2022, and financial experts are forecasting a global recession soon. If this is your first big dip, then the best advice is to calm your nerves and wait for prices to recover as they enter the accumulation phase of the market cycle. The crypto crash of 2022 has understandably caused a lot of stress and anxiety in the investment community because of its size and scope, but rash decisions are always best avoided.

Perhaps more importantly, never risk more money than you can afford to lose. But, then again, show me a crypto that isn’t a rollercoaster of emotions. And while it’s obviously impossible to predict Litecoin’s price with any degree of absolute certainty, there is positive sentiment surrounding the asset, especially when it comes to its long-term prospects. Trading Beasts performs daily predictions of different assets based on “historical data and using a combination of linear and polynomial regressions.” As a result, the platform has Litecoin price predictions up until 2025.

3 stars for the service itself that allows you to program custom bots while only you need to focus on writing the code. In fact, let’s say that you’ve created and tested your own algorithmic trading bot. You’re now ready to take your trading to the next level — live trading, right? A return is the amount of money made or lost over a period of time, or the absolute return on investment over the given time period. A further distinction can be made between nominal returns (i.e. the net profit or loss expressed in nominal terms) and real returns (i.e. adjustments are made to account for external factors such as inflation). Approximately one year is a common time frame used by seasoned traders for backtesting.

Crypto margin trading involves using the funds deposited in your trading account as collateral for a loan from a crypto margin trading exchange. As with other types of trading, you can automate the process by creating a margin trading bot using Python. The loan advance increases your buying power to trade more crypto than you would if you were to use your own capital.

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