Bitcoin Futures: Tips for Successful Trading

Bitcoing halving

Discipline, patience, and a pre-defined trading strategy are arguably the three most critical characteristics distinguishing winning traders from losing traders. Of course teaching discipline and patience is rather difficult. Yet it is possible to learn profitable trading strategies.

Simple Trading Strategies Work Best

Some of the biggest mistakes traders make is their assumption that complex formulae and complicated laws will fill efficient strategies. There is simply no empirical proof that indicates the highly difficult efficient trading systems. In addition, simple methods of trading produce typically the most reliable long-term returns. Let’s look at a few profitable strategies that stood the test of time.

Support and Resistance Levels

The first trading technique is a very basic chart pattern, defining levels of support and resistance.

Bitcoin Futures: How to Trade in

This above chart includes two days of intraday BTC trading operations. As you can see, the level of 9822 has strong resistance. On Feb 17, Bitcoin made three attempts to penetrate 9822 in 22 hours. This strategy positions a buy signal 9822, waiting for Bitcoin on its fourth attempt to break the hard line of resistance.

Finally, on Feb 18, as he hits 9822, BTC induces a bullish breakout. The benefit goal is simply the distance trading range between the line of resistance (9822 – 9481 = 341 + 9822 = 10163). This trade yielded a 341-point profit.

Let’s go over another example demonstrating a bearish breakout. Graph #2 reveals intraday trading activities for Feb 14 and Feb 15.

Bitcoin Futures: How to Trade in

Bitcoin tried to penetrate 10206 three times in the early morning hours of Feb 15 and broke down on the fourth try. That triggered a 10206 sell signal. The profit target is the trading range of the support line distance, generating a 69-point profit.

This trading strategy can be followed quite simply. This is a perfect strategy for day traders, as it provides many trading opportunities in a single trading day. Simply lessen the time span for each bar on the chart if you want to maximize the number of buy-sell signals.

Rates of support and resistance work extremely well when markets show a clear pattern change. Conversely, the strategy works poorly when the market is trapped within a trading range. This is why always using protective stops is critically important.

True Range Breakout System (TRABOS)

True Range Breakout System (TRABOS) is another straightforward marketing technique. The first step is to select the trade activity of 60 minutes. The best periods are when the high volume markets are very busy, which is usually in the morning hours. The following diagram displays 60 minutes of trade action.

Bitcoin Futures: How to Trade in

Now, we’re measuring the 60-minute box trading range which is 65 points. Then, assess the final bar closing price in the box which is 9649. Finally we add the range against the closing price (e.g. 9649) and subtract. The buy signals are 9714. The signal to sell is 9584.

As you can see from the map, 9714 produced a buy signal. What is the target for profit? The target is 200 percent (65 x 200 percent = 130 points) of the trading range. And the income target is 9844. After the trade was launched, the goal was elected relatively quickly.

TRABOS is a very easy trading method to use. If you want more operation with TRABOS, the easiest solution is to lessen the trading window’s time period. For aggresive day traders, raising the trading period to 15 minutes isn’t unusual.

TRABOS is very similar to support and resistance levels in terms of its ability to generate profits in a trendy environment. TRABOS works best when Bitcoin is moving in the same direction for an extended time period. TRABOS will lose money if BTC is stuck in a trading range. It is safer to use defensive stops to reduce your losses.

Fibonacci Levels

Let’s look at one final strategy, which involves using Fibonacci levels. When Bitcoin is stuck in a trading range, it works best. The strategy produces input signals explicitly based on different Fibonacci levels. The first step is to calculate the previous day’s BTC trading range, shown in Chart #4.

Bitcoin Futures: How to Trade in

The map includes intraday trading for Feb 18. BTC trading range was therefore estimated for 17 Feb. The second step is to generate the Fibonacci levels and display the chart with each price level. The third step is to use the Fibonacci rates as signals to buy-sell.

Very frequently, between the Fibonacci rates, Bitcoin tend to get stuck in a trading range for several hours. This strategy is a great way to trade BTC successfully when it is moving sideways. For instance, during the final eight hours of Feb 18, BTC had stuck between 10121 and 10276.

The strategy created a sales signal for profit secured the trade. You will find there has been an excellent buy signal created protected the place to a profit of 154 points.

There will of course be some unprofitable signals along the way, so be sure to use safe stops.

Reducing trading costs increases income prospects

For successful day trading, the single biggest enemy is commissions and trading costs, which can kill your trading income. Trading fees are the main reason the majority of day traders are losing money. Even the most popular day traders in the world have publicly acknowledged that the commissions reduced much of their profits.