What should you look for in a crypto trading signal service?

After careful analysis of several cryptocurrencies, the signal provider will arrive at a decision about what they consider a good cryptocurrency, the buy range, exit strategy, and expected duration of the trade.

These are the things traders and investors should look for in a crypto trading service.


Project Trends

Signal experts usually arrive at this decision by scanning through a few of the available cryptocurrencies and examining their market data such as the price trends and moving averages.

Sometimes, they can analyse signs of an alt-season in crypto or receive early information about a project like the announcement of an airdrop for holders of the coin.

If several people know about this offering, chances are, many investors will want to be beneficiaries of the upcoming airdrop by buying the coin before the airdrop date, which would in turn cause its value to soar significantly.


Buy Range

This is also referred to as the entry-level. Here, the signal professional conducts a full-time TA on cryptos. When the coin that is considered a good buy is spotted, the signal expert carefully analyzes its market data to identify what price level is suitable for entry.

The value is usually given in the range and it is left for the trader to identify where to place the purchase order. Setting your purchase order below the range given by the expert may not end well, as the coin may not reach your expected level before reaching its sale target.


Exit Strategy

The signal professional would also provide the price level you are expected to sell in order to lock in a profit or mitigate your losses.

This encompasses the Sell Target (ST) and the Stop Loss (SL). Sell Target is the price you’re willing to sell to make a gain, while Stop Loss is the price level you want to sell to reduce your losses in case things do not go as planned.

In most cases, the Sell Target and Stop Loss are usually given in different ranges and traders are expected to choose a particular value based on their risk appetite.

To be on the safer side, it is best to set a One-Cancel-the-Other (OCO) order, which requires traders to input both the value of the ST and SL, respectively.


Trade Duration

Here, the timeframe the trade is expected to achieve its goal will be clearly stated. The signal provider usually indicates this by stating whether the trade is short-term, mid-term, or long-term. This would help guide traders’ decision about whether to join the trade or ignore it.

People who opt for short trades may be classified as trend following traders and are expected to always be on the lookout for the price movement to know the condition of the market.

On the other hand, people who choose medium or long-term are confident that they will be on the trade for a long time and as such are referred to as investors. People in this category are not bothered about the daily trends of the market as they believe things will fall into place in a few months or years.

Leave a Reply

Your email address will not be published. Required fields are marked *