This is for beginners who want to know how trading works and the basics.
So this guide provides some basic guidelines that should help you better understand the good times to buy or sell different coins.
10 Tips/ideas that you may find helpful
- The 24-hour volume is a good indicator of whether big money is flowing into the market or not if you see huge volumes on Bittrex at, say, midnight.
For example, it’s probably people pumping coins before an announcement etc., which you should avoid. If you see shallow volumes during the day, there’s likely to be less volatility, which makes it better to trade.
- An important concept, especially for new traders, is that if there hasn’t been enough volume over the last 1-2 days (for example), price swings should be much smaller throughout the upcoming day because that volume is essentially the fuel for volatility.
If there has been low volume over a few days, price moves will be much less volatile (because it’s not moving far with each trade), making trading more difficult.
- One way to see this volume flow easily is to use Cryptowatch https://cryptowat.ch/ – you can plot various charts and scroll back in time to look at typical volume patterns depending on market conditions. It also shows all the major exchanges.
- There are often multiple support/resistance prices that matter on any chart (for example, if resistance is turned, support comes into play but has already failed once).
If you’re new to following charts, this might seem overwhelming, but if you stick with them, you’ll start to see how these basic levels form and reform in time with price movements.
- Using Cryptowatch, this is easy. Click on the ‘advanced’ option in the platform, and you can easily see significant support/resistance lines or draw them in yourself.
They will automatically show up depending on the chart type selected. It is a handy trading tool for all time frames (concise term).
- Volume analysis comes into its own when combined with TA – that’s technical analysis for anyone new to it.
- If you see a sudden increase in volume at a certain price level, especially if it is on Bittrex (mainly BTC pairs), it indicates some resistance, which will likely stop the price from going higher.
Hence, unless there is another supporting indicator (which I’ll get onto), I’d be careful about buying near these sorts of levels.
Even if it looks like it’s going to break through, there may not be enough momentum for this move to happen, and you could end up with a loss if you buy.
- Conversely, sometimes, when prices are falling or stagnating (slowly rising), there can be an opportunity to jump in because big players may want to get into that market but don’t want to jump in very near the top.
If there is a sudden drop in volume and the price starts strengthening again, that’s when people who already hold coins (holders) will start building up their holdings at lower prices.
- The order book on Bittrex is handy for looking at how much selling/buying pressure exists for any given coin.
There are multiple levels of buying and selling orders which you can see on an order book chart if you click on the ‘depth’ option in Cryptowatch.
- You should be able to get a live quote from multiple sources, and it shows you what bids and asks (prices sellers and buyers are willing to do business at currently) exist – these change over time.
You may find these tips/ideas helpful, but in the end each person has unique goals and risk tolerance.
Many people think trading is all about getting lucky and catching a pump, but it’s not like that at all. It’s an art. It’s the fine line between knowing when to get in and out of a trade.
You can’t expect to always get in at the lowest price and out at the highest price either; you will lose more than you gain if you do that, especially as a beginner.
For more information, look at this site.