What are cryptocurrency trading signals?

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For traders, there are specialized channels whose analysts give out various trading signals for cryptocurrencies, the reviews of which are not bad. The second option of channels that give signals to cryptocurrency traders is indirect providers. They are often people who do not professionally specialize in market analysis. These are usually regulars of thematic communities or subscribers of paid channels who leave self-generated information in comments.

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Cryptocurrency signals from professionals

Also, in the free version, you will be able to see some of the signals, statistics on them, promptly receive current news that can affect the movement of signals for cryptocurrency trading prices on the market. A cool feature is the ability to filter signals by the cryptocurrency you are interested in, as well as view upcoming events.

How are paid cryptocurrency signals better?

Of course, you should develop an overall strategy before risking your money, but sometimes that’s not enough. You have to be ready to react in seconds as soon as the right opportunity arises. Even the best strategy in the world won’t help if you can’t make decisions and act quickly. The crypto industry is slowly evolving, copying trading techniques from other financial markets. One way to start trading on a cryptocurrency exchange is to get crypto alerts on the price movements of certain digital instruments.

There is nothing easier than getting signals for cryptocurrencies and, using this information, getting rich quickly. Let’s not forget that there are a huge number of scammers in this field. Their main target is inexperienced traders, but even experienced participants of the cryptocurrency market sometimes get hit by cheaters. That’s why you need to be careful to make money and not become a victim.

  • All the signals that are given to the user, firstly, there are different types.
  • Secondly, they have different purposes and carry some information, such as signals to buy cryptocurrency or signals for cryptocurrency growth.
  • You should also understand that trading signals are the result of long analytical work or insider information taken from the circles of larger market players.

 

First of all, we are talking about the high volatility of rates of digital assets, as well as the tendency to form price gaps. For this reason, not every indicator that effectively predicts the direction of price movement on fiat instruments copes with its task on cryptocurrency pairs. In this article, we have collected the most effective cryptocurrency market analysis tools that are worth using to build a profitable trading strategy.

Trading signals are recommendations about profitable points for buying and selling cryptocurrencies, made based on detailed analysis. Such information is distributed through forex strategies through special platforms, channels, chats, and messengers, which are of open and closed type. The first is available to everyone, the second – only those who have paid a subscription.

They contain information on what coin to buy and when to do it. Trading signals are akin to insider information about an upcoming change in the value of a trading instrument. But unlike the real insider, they are obtained in an honest way – through deep market analysis. Signals providers provide online messages about the most convenient points to enter the market and the most profitable points to exit. The messages are transmitted in real-time through an open channel of communication (chats, messengers, social networks).

Those who have access to insider information can really make good money. Such users are warned about plans of large crypto market players to artificially raise or lower the price of a particular cryptocurrency. Trading signals come in the form of push notifications, messages in messengers, social networks, or emails.

However, there are fraudulent trading signal services that promise super profits to their subscribers.

Test Mode

As a rule, trading signals, with few exceptions, are a paid service, but sometimes you can activate it for some time in testing mode. Providers of signals do not undertake any obligations and do not guarantee profitable trading. Based on such trading recommendations, you will be able to build an even profitability straight line and multiply your cryptocurrency savings. All trading signals for cryptocurrency trading have a lot of distinctive parameters, depending on the distributors of information. Direct providers traditionally supply signal information mainly for the most popular cryptocurrencies, for example, ethereum, bitcoin, dash, litecoin, etc.

To analyze the rates of cryptocurrencies, algorithms that have long been implemented in technical analysis indicators and have already confirmed their effectiveness in the currency and stock markets are used. Their universality is due to the use of mathematical methods of calculation of readings, where only the price of the analyzed asset or information about trading volumes are used as input data. Therefore, any of the indicators will also work with quotes on the cryptocurrency market, where the same principles of price formation apply as on the classical trading floors. But there are also a number of features that distinguish the altcoin market from classic investment instruments.

The most difficult part of the work, namely determining the optimal time to open and close positions, will be done by experienced traders. You will only have to use the information received and take profit before the scalping strategy turns in the opposite direction.

So, depending on where the signal comes from and what information it carries, it comes in paid and free. Free trading signals for cryptocurrency traders can be found on personal websites and social networks. If it is a private trader’s site, the quality of signals will be low.

VIP groups and trust management

Subscriber loyalty can be used in different ways. For example, selling paid subscriptions to a VIP channel. Unscrupulous traders create the illusion of big earnings to lure new users into private groups. They provide signals to buy and sell different assets and other financial advice.

Whether they are of high quality is a separate question. But if the group owner cares more about making money by selling subscriptions than by trading, the signals will most likely not work. Another scheme is that they can simply be copied from random free channels.

Another way to make money from your audience is through trust management. It works in the following way: the channel administrator takes under his control a certain amount in cryptocurrency, with the condition that he will trade it, and a fixed percentage of profit – to keep for himself.

The unscrupulous trader divides the received coins into two halves. Each of them is used to open long and short positions simultaneously. Therefore, no matter what happens to the rate of the asset, one of the transactions will be profitable. The attacker will get his percentage, but someone will be left without his money.

But it doesn’t matter for the channel owner who originally intended to deceive subscribers. As a rule, the scammers refuse to take responsibility for the failures even at the stage of making the deal.

“Pumps” and arbitrage

In addition to providing paid services such as access to VIP groups and trust management, some channels may arrange “pumps”. Subscribers are offered to buy a certain coin, the name of which is revealed at the last moment, seconds before the start of the promotion.

As soon as this happens, participants of “pump” massively buy altcoin in the hope of an instant increase in its exchange rate. The asset may go up in price, but it’s mostly the organizers who make money on it, while subscribers are left with a cryptocurrency with a questionable future in their hands.

In other words, channel administrators, who want to earn on their subscribers, buy an illiquid coin, artificially inflate its rate, and after some time organize “pump” to get rid of it. If the price of the cryptocurrency rises seriously, the criminals benefit from this in two ways: they both earned money from the audience and got a statistical advantage.

Another, but similar way to manipulate subscribers is arbitrage. The channel gives a signal to buy an asset on one exchange, expecting to resell it at another one. Data from aggregators such as Coinmarketcap can be cited as confirmation.

Such services, like exchanges, show the price of assets based on the last transaction, rather than on open buy or sell orders. The attacker uses this in the following way:

  • He buys an illiquid altcoin and transfers it to exchange A, where its price is higher than the market average, say, by 10%;
  • On exchange B, artificially inflates the rate of the asset, for example by 50%. This is done by finding an exchange with a low number of open orders to sell the altcoin and buying it at a high price, which is fixed by the aggregator;
  • Informs in its channel about the difference in the value of the cryptocurrency on the A and B exchanges, and, accordingly, the opportunity to earn on it.

 

As a result, subscribers buy the coin at an inflated price from the channel administrator on exchange A. When they transfer the asset to exchange B, it turns out that they can only sell it at the market rate, at a loss to themselves.

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