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How to use crypto signals when trading with Coinbase?

It is no painful hustle to use crypto signals with Coinbase once you have already purchased your premium signals. 

What are Cryptocurrency trading signals?

Crypto signals are a special set of instructions created from thorough technical analysis for informing the price direction of an asset in an FX or Crypto market setup. Crypto signals have grown in popularity since the inception of Bitcoin in 2009. 

The entry of thousands of altcoins after BTC, has made the cryptocurrency market pretty lucrative. Flocks of people have become interested in investing in digital assets, and as this interest takes root, there is a deep desire to generate profit and avoid loss. 

The downside with the cryptocurrency market is majority of entrants havent got quit the grasp of it. The sector remains a complex market to understand, and the high volatility of assets has made it ever more difficult to place price direction into context.

If you are not a seasoned trader or technical analysts, making sense of the prices is not easy. This is why you need crypto trading signals to help make quick decisions and make profit.

In their most basic form, cryptocurrency signals are trading ideas for both beginning and seasoned traders to perfom a transaction on a particular cryptocurrency asset. 

Why Should you Use Crypto Signals with Coinbase?

  1. Low trading fees – Coinbase 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. Security and data privacy – you need not to worry about the safety of your funds when trading with Coinbase. 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. 
  3. Simplicity – Coinbase Exchange has an easy registration process and the interface is user friendly to accommodate traders of any level. 

There are two major types of cryptocurrency signals, a buy or sell signal to help you either long or short the market. Reading and understanding trading signals is simple. It is even simpler if you have an idea of trading, the cryptocurrency market price action and the industry jargon. 

A trading signal provider supplies traders with these signals. The signals are derived by a team of highly experienced traders and technical analysts. The signal instructs the trader what cryptocurrency to buy, at what time , at what price and the price they will sell it. Usually, the time is not defined as much but the entry price is specifically crucial to help traders know at what point they have to get in. 

Things you should note about buy/sell signals is that buy signals are usually supplied during market uptrends. On the hand, service providers issue sell signals during peak downtrends. The signal might have or might not have a Take Profit level.  Depending with your risk management plan and to avoid things like slippage and liquidation especially trading with leverage & margin,it is vital you set up a stop loss and a take profit level.

Below is an example of a crypto trading buy signal with no Take Profit. The subscriber is instructed to buy Ethereum at $1200. There is no SL or TP target, and therefore the trader is at liberty to personalize their own SL and TP levels. In such cases, the trader can either set a SL at breakeven and wait for the price to go up.Where they will then take profit. 

An example of a crypto trading sell signal will instruct a trader to sell Ethereum at a particular price. Let’s say $1100. A sell signal must also have an open stop loss and take profit target. Incase the price drops, the trader can place a trailing stop loss or adjust the SL to the breakeven point. A breakeven is usually the entry price at which you opened a position. Incase the price surges upwards, the trader can the place a close limit at a major demand level such as $1500. This is because the area below $1000 is a major supply/resistance level. 

How to Trade on Coinbase with Trading Signals

You need a fully registered Coinbase Exchange account. Also you need to have passed all user verification and sufficiently passed all KYC and AML policies in place. The next step is loading your account with funds. Deposit atleast $50 for this trade. However, there isnt a maximum or minimum amount of capital. The cryptocurrency market is pretty flexible, unlike stocks which might have a minimum entry level. You can trade crypto with even $10. 

The other step is to now subscribe to a credible premium level crypto signals provider. In our example below on how to use Coinbase with crypto trading signals, we are going to use a signal from FXLeaders. 

This signal will instruct us to buy Bitcoin $19,200, utilize a leverage of X3, set up a stop loss target at $18,000 and a profit target at $22,000. 

Go to Coinbase Pro

The official Coinbase Partner for traders. Head to Pro.Coinbase.com and start your trade once you have loaded funds. Also you need to choose your preferred stablecoin base currency, USDT or USDC. In this trading example, we will settle with USDT.

For trade signals where you do not have a SL and TP target, you may use the Limit option. On the image above you can see the small red box with Limit. Press that to get started. However, in our case we do have an SL and TP target, therefore we need to go with the Stop Option , next to the red box.

This is the point at which you implement the signal you already have. On the Left Sidebar is the order box. Enter your entry price, the stop price of Take Profit and the Limit Price , which is the SL target. 

In our case, we have a buy signal for the BTC/USDT pair at $19160, a take profit target at $20,000 and a stop loss target at $18,500.

Risks of using crypto signals when trading

  1. 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.
  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. 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. 

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. Trusting someone’s opinion regarding where to place your capital in trading comes with some level of risk and a high level of understanding –Imagine trusting a dubious signal provider and then losing your money. Many illegitimate platforms exist and its easy to fall prey for what seems like credible positive reviews. Wrong trading signals could end up wiping out your entire capital.
  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.

You can easily lose money – If you lack a good risk management strategy, crypto signals could result into lose of money.

About the author

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.