What Are Crypto Trading Signals?
Skerdian Meta • 5 min read
The forex signals industry has been the forerunner of the crypto signals systems, both of which have become very popular with the growth of retail trading and the growth of the cryptocurrency market in the last decade. The volatility in the crypto market makes it almost necessary to have a second opinion from professional traders, given that most crypto traders/investors don’t understand the fundamentals behind cryptocurrencies and the blockchain technology behind them. Crypto trading signals are recommendations to buy or sell a cryptocurrency token at a certain price, which should include certain parameters such as the take profit and stop-loss targets as well to be considered complete.
Are Crypto Trading Signals Important?
So nowadays when cryptocurrencies are becoming increasingly popular, you need to choose carefully before deciding to invest in a given project, considering the crash of Terra LUNA and UST. Some cryptocurrencies that are based on real projects such as Solana (SOL), Fantom (FTM), Ethereum (ETH), Polkadot (DOT), Binance Smart Chain (BSC), etc are good to start with because you have security that they will progress and have a bright future. These are projects with a good foundation and a lot of potential.
With new crypto tokens, you can get a high revenue at a lower launching price although they are riskier. But these need extensive research from professionals because these are very technical projects, which means that altcoin signals from professional service providers are a necessity, since most people don’t understand individual blockchains in depth. Crypto trading signals allow you to quickly and, most of the time, successfully decide on the completion of a cryptocurrency transaction.
Bitcoin (BTC) and Ethereum (ETH) signals were the most common ones, but in recent years crypto signals on other crypto tokens have become popular too. Shiba Inu coin has now become a very popular cryptocurrency with very high trading volume, which also means large moves. Signal providers can recognize the end of such moves either at the top or at the bottom of a trend, which can provide very good trading opportunities. All categories of traders can make use of crypto trading signals, be it experienced or new ones. Experienced traders can receive new trading opportunities and broaden their market scope, while for new traders to earn as they also learn how this new market works.
How Do Crypto Signals Work?
There are plenty of crypto trading signal providers, free or premium signals which are more complete, and each of them has a different system and is based on different research and analysis methods, although in general crypto signals fall into two main categories.
In the first category, there are altcoin signals which are issued by professional traders who analyze the crypto market, which includes all the earlier information on the price action and the trend of traders. Followers just have to copy the signal as it is displayed on their crypto broker platform.
In the other category, crypto trading signals are based on computerized studies of the market. Expert traders help build automated crypto signal systems to read chart patterns and to provide the signals. One of the biggest benefits of automated systems is that it eliminates the contradictory effects of human psychology, which could sometimes affect the trading performance.
How Do We Evaluate Crypto Projects?
We at FX leaders have a team of experienced traders and analysts who perform thorough technical and fundamental analysis, as well as the sentiment for the entire crypto market which drives cryptocurrencies most of the time. The sentiment and technical are visible from the charts while fundamentals are discussed and published by our analysts. The market capitalization is an important metric for cryptocurrencies although it doesn’t always tell the story since tokens with a large market cap find it difficult to gain much in value. With tens of thousands of cryptocurrencies in circulation, project ranking and market listing are also important factors. Other metrics are the trading volume which measures the value of coins that are bought and sold daily or monthly, with our analysts watching out for middle or large projects with low trading volume, which means that the project is not going well. Liquidity is also important, since it shows how easy it is for a crypto asset to be exchanged for cash or other assets when you want, particularly on low volume projects.
Comparing circulating supply to total supply shows how many coins have been left to be mined/minted. If the circulating supply is close to the total supply, then the value of the cryptocurrency should increase. The team of developers is also taken into consideration, since they are the most valuable asset, particularly for newer projects. The importance of the community can’t be underestimated either. Dogecoin and Shiba Inu rely heavily on their community that brought these projects to great heights.
The white paper, which is pretty technical for normal people, is also one of the most important documents for a crypto project. It shows the roadmap for the project and provides insight into the inner workings. Understanding the utility as well as the use case is also important for the long-term performance and viability of a crypto project. If the project attracts lots of funding and has strategic partnerships, then this is another positive sign in the long term.
How to Read Our Crypto Signals
Reading crypto trading signals is pretty easy for traders who have a very basic knowledge of the cryptocurrency market. All followers have to do is copy the data as it is given into their trading platforms as soon as possible, so there’s not much price deviation from the entry price of the crypto signal. One of the latest Bitcoin signals we gave was displayed in the format below:
BTC – Sell – Entry Price ($30.500) – Stop Loss ($31,500) – Take Profit ($29,000)
- The crypto asset to trade (BTC)
- The action for the trade (Buy or Sell)
- The entry price of the asset (30,500)
- The stop loss target ($31,500)
- The take profit target ($29,000)
All the necessary information for the trade is included in the Bitcoin signal above where the asset to be traded is BTC, the action is sell, the entry price is $30,500, the stop loss price is $31,500 and the take profit price is $29,000 with a risk/reward ratio of 1:1.5. This is a short-term signal which closed within a day, since the targets are considerably small for Bitcoin. Besides these types of signals, there are also buy only crypto signals and sell signals. Buy only signals are issued during an uptrend, when a signal service predicts that the price action will be bullish in the future and gives a buy recommendation, although the trader has to decide himself where to close the trade. Sell signals are the opposite, with analysts predicting a retreat in the crypto price therefore they give a recommendation to sell which has an open take profit and stop loss.
Telegram for Signals
Telegram has become a popular platform where traders and trading signals post their trade ideas for followers to copy them, having built a crypto community. You can find new trading opportunities without having to do the analysis or follow the markets yourself. There are signals for all types of cryptocurrencies in Telegram, such as Solana (SOL), Fantom (FTM), and Cardano (ADA) signals. There are all sorts of signal providers on this platform, some of them serious and some not so professional, some of them offering their service for free and some others for a fee. In 2015, Telegram launched a platform for third-party developers to create bots, which means that there are automated signals as well on this platform on top of channels, groups, and stickers.