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How to use crypto signals when trading with bybit

Crypto signals are defined as a set of instructions packaged as trading tips that help traders to invest wisely. The signals allow traders to avoid apparent pitfalls that could easily cost them money. Signals can be created by a software or through the knowledge and opinions of experienced traders. 

Experienced traders and analysts with long track records are the ones tasked with building crypto signals. Note that the trading signals provided by experienced analysts are not products of guess work. Hence you can easily rely on them and overcome the entry barriers to trading crypto.

Market analysts undertake thorough technical and fundamental analysis of particular cryptocurrencies to come up with detailed crypto trading signals. The format entails details of the entry level price, stop loss and profit take target.

A crypto signal in its most basic form would look like this: 

Trade Ripple (XRP) – Sell – $0.55  – TP $0.40 – SL $0.70

  1. Trade an asset called Ripple(XRP).
  2. The action for the trade whether its buy or sell. In this case, its a sell. 
  3. The entry price level to sell is $0.55
  4. A take profit target price at $0.40
  5. And finally, a stop loss target at $0.70

In most cases, crypto signal platforms will provide a short term signal with all targets mapped.

How to use ByBit for trading signals

You need a ByBit account to continue. Once done with registering your profile on the official exchange account, come back here and learn the exact way of trading ByBit using trading signals. We will make the assumption that we have received Futures trading signals. 

Prerequisites include: 

  1. A Bybit account. Registering on the platform will require you pass all Know-your-Customer (KYC) in place. 
  2. Load funds into your account. Deposit atleast $50 to get you started. There is no maximum or minimum amount of capital. You have the freedom to start anywhere. 
  3. Finally, a Bybit trading signal from your preferred crypto signal provider. In this example, we will use a signal from FXLeaders analysts for buying Ethereum (ETH) at $1350 using a 2X leverage, a profit take target at $1600 and the stop loss at $1100. 

Step 1: Go to derivatives

Locate USD-M Futures on the ByBit homepage. Navigate to the Derivatives Button at the top of homepage. If you do not intend using leverage, click Spot located under Trade. Depending on your preferred base stablecoin, you can choose between USDC and USDT. in our case, we are going with USDT Perpetual.

At this point, I am already assuming you have already loaded your Bybit wallet with funds. As well as transferred the funds from your funding/spot wallet to the Futures wallet. 

The next step is to now set up the leverage. We have two options when customizing leverage, Cross or Isolated margin. Cross means the leverage will affect your entire capital irregardless of whether its in an open position or not. Isolated means the leverage will not affect your balance in the Futures wallet. We recommend using Isolated. An Isolated leverage ensures you reduce the overal risk spread just incase you have several Futures positions you want to open simultaneously.

After picking Isolated, set your leverage to 2X through the steps shown on the image below and confirm. Since our signal is a buy action, we will set the Long Leverage to 2.

The next step is implementing the signal you received. On the right sidebar, is an open and close bar. Choose the Open Position Bar and click on Limit.  You will then need to tick a box written :

Checking the box will display two text boxes where you can now customize your take profit target and stop loss target depending with the signal you received. In our case, we have a buy signal for the ETH/USDT pair at $1350, a take profit target at $1600 and a stop loss target at $1100.

After the above steps, its time to open our long position. We intend to use $25 to open a buy position at $1350. The other parameters include to set up a TP and a SL at $1600 and $1100 respectively. 

This is the final step and at this point you only need to patiently wait for your order to fill. Something else you need to look at is how to ake profit without closing your position. Nonetheless, we are not going to cover that topic in this article. But generally, this is all on how to use crypto signals with ByBit.

How to identify the best trading signals

Since you have already learnt how to trade Bybit with crypto signals, lets scratch the surface a little bit more. In this section, we answer how to find the right trading signal. 

1.What other features are available besides crypto signals? 

A good signal provider provides more than just signals. This could be news coverage, events, live updates and detailed description of the methodology they use for a particular trade. Choose a provider that offers passive learning besides earning. 

2.Do they have a free trial or money back guarantuee? 

A service provider with either a free trial or money back guarantuee indicates the team is not just out for money. They have an urge to grow their customer relations and are invested in the long term growth and advancement of its subscribers. 

3.What are you instincts telling you? 

Your gut instincts will always warn if something is not right. The right service provider will not relay any red flags or cause any doubts. Therefore, try as much as possible to rely on our gut feelings when choosing the right trading signal provider. Just incase you identify any redflags, the provider is not worth the risk. Hence, flag it down. 

4.What’s their track record and experience? 

Identify a service provider that has been around for a while. Newcomers have high chances of getting things wrong. A seasoned team of analysts and signal providers with years of experience are the most preferred choice. Also take note of the platform’s reputation and its historic perfomance. Consistent positive testimonials and ratings are signs of a credible provider. 

5.Are they honest and transparent?

A quality provider is transparent when communicating their wins and losses. It is not possible to have a long streak of wins only if there is no back up proof. Genuine providers will back up their wins and admit losses on the way. 

Risks of using crypto signals when trading

  1. Price Movement – The volatile nature of cryptocurrency will always lead to dramatic price changes. Volatility could either hurt or profit your investment. Therefore treat those unexpected market changes as a double-edged sword. It is easy to lose with crypto when trading a highly volatile market. You either make quick profits or quick losses. We however recommend using crypto signals when trading the big coins, which even if they are not at the entre level ; they will still regain their position. 
  2. Fees – There is a cost associated with trading any cryptocurrencies. These costs could be trading, withdrawal and deposit fees. Such fees result in tight profit margins and we recommend factoring them in when calculating your investments. Imagine if you bought a coin from one exchange and expect it to sell on another exchange at 1% profit. You have to pay 0.3% in fees in each exchange. The total profit will be minus 60%. Some exchanges also charge deposit and withdrawal fees. Factoring all these costs could easily see you out of interest.
  3. Slippage – Slippage is the extent of a price change between the time you started your trade to the time you successfully concluded the transaction. In arbitrage, it means the price could change to your disadvantage after you have just bought the coin. Slippage could be a small amount of money but it really counts in the cryptocurrency market. Crypto trading requires you to trade within tight margins and you therefore require to put much thought on all these costs, including the costs of a reliable crypto signals provider.

Pros of Crypto Signals

  1. A reliable extra pair of eyes – It is difficult to monitor multiple markets taking place across different timeframes. You also cannot watch these markets 24/7. In such cases, reliable trading signals become your personal trading assistant for enabling you trade a couple of markets altogether. 
  2. Generating profit – A decent crypto trading signal platform will generate you money. It does not matter whether you are parting with some dollars to get a premium signal, the provider will make you money at the end of the day. 
  3. Fresh perspective – If your provider has more experience than you do and they end up providing a contrary signal; the signal ends up clearing your doubts about the market’s direction. A fresh perspective will also help you horn your trading skills and your ability to conduct accurate technical analysis.
  4. A tool for passive learning – Crypto signals allow you to learn everything about trading and the thought process of expert traders. Following the trades of professional traders and analyzing their process of working out the signals, you incorporate new knowledge to your way of trading and thinking. 
  5. Reducing risk – Sometimes you cannot make the right decision on where the price of an asset is heading. And jumping into a trade with a biased mindset is setting yourself up for risk and loss. Crypto signals alleviate this kind of risk and you could end up making profit where you would have made a loss. 

Cons of Crypto Signals

  1. Placing trust on someone’s opinion on how to invest your trading capital comes with a high level of understanding. Imagine if you end up trusting a dubious signal provider and then you lose your money.  There are many illegitimate platforms out there and you could easily fall for what seems like credible positive reviews. Wrong trading signals could easily wipe out your entire capital investment.
  2. No upward learning curve – Crypto signals will not help you take the traditional trading learning curve as it is with live trading. Yes, you will easily find new opportunities and exploit them but you will be using someone else’ opinions. To get better with trading, you need to learn it through experience of live trading. 
  3. Pay is upfront – Some providers might charge lots of money to offer signals even to a small account. This would not be recommendable if you believe the profits are not worth the sigal. Also remember their is a risk attached to paying money to provider you have never used before.
  4. You can easily lose money – If you lack a good risk management strategy, crypto signals could result into lose of money. 

Why use Crypto Signals with ByBit?

  1. Low trading fees – ByBit aims to keep its fees threshold as low as possible. Employing reliable, consistent and frequent crypto signals with an exchange that charges low fees will make you lots of profit. 
  2. Simplicity – ByBit has an easy registration process and the interface is user friendly to accommodate traders of any level. 
  3. Both Margin and Futures accounts – ByBit has both futures and margin accounts that allow you to reap returns from leveraging your capital investment. 

Security and data privacy – you need not to worry about the safety of your funds when trading with Bybit. The platform follows a strict data privacy protocol to ensure their user data is safe and can never fall in the hands of unscrupulous individuals.

About the author

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Skerdian Meta // Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.