Top 3 Crypto Arbitrage Strategies for Traders 1

Top 3 Crypto Arbitrage Strategies for Traders

Trading
• Digitex
April 28, 2021

Sometimes, the same asset is priced differently on two separate markets.

This is when arbitrage comes into play, in which traders spot such market inefficiencies and take advantage of them to make a profit on the price differences.

For example, when BTC trades at $50,000 on exchange A and at $50,200 on exchange B, arbitrageurs could purchase the digital asset on the prior platform and move it to the latter service to sell for a profit (in this case, it would result in a $200 profit for one BTC).

Unlike the traditional financial industry where such inefficiencies are hard to find nowadays, the cryptocurrency space often presents excellent arbitrage opportunities.

For that reason, we have collected the best three crypto arbitrage strategies in this article.

Let’s see them!

1. Simple Arbitrage

As its name suggests, simple arbitrage is among the easiest crypto arbitrage strategies out there and is essentially what we described in our previous example.

When you spot an opportunity, you deposit funds to the cryptocurrency exchange with the lower price, purchase the digital asset, and withdraw it to the other platform to sell it for a higher price.

Since you don’t have to perform any other trades than the ones above, this crypto arbitrage strategy can be executed quickly.

However, due to its simplicity, there is a higher chance of other arbitragers spotting and taking advantage of the same opportunity.

2. Triangular Arbitrage

Taking place either across multiple exchanges or on the same platform, triangular arbitrage aims to profit from the inefficiencies across three cryptocurrencies.

For example, an arbitrage opportunity occurs when the BTC/USDC pair is trading at 50,000 USDC, and one ETH equals 2,000 USDC, but the BTC/ETH pair is priced inefficiently at 30 ETH instead of 25 ETH.

In such a scenario, you execute the triangular arbitrage strategy with the following steps:

  1. You deposit funds to the exchange and purchase 1 BTC for 50,000 USDC.
  2. As the second step, you trade the BTC/ETH pair to convert your Bitcoin to 30 ETH.
  3. Finally, you sell the 30 ETH for 60,000 USDC.

As you can see, this opportunity would have generated you 10,000 USDC in profits with a 20% ROI on three trades. This type of opportunity is very infrequent and must be jumped upon immediately before the exchange’s algorithm quickly corrects the error.

3. Yield Arbitrage

Yield arbitrage allows traders to profit on interest rate inefficiencies between two DeFi lending or staking platforms.

Since the decentralized finance industry is quite new – yet growing at a rapid pace – it’s not unusual to spot irregularities related to interest rates or yields.

With yield arbitrage, a trader borrows funds in a stablecoin with a lower annual percentage yield (APY) for borrowing, exchange it to another stablecoin with a higher supply APY, and uses the latter cryptocurrency to lend funds to others.

An example yield arbitrage strategy goes as follows:

  1. On a DeFi lending platform, DAI’s borrowing APY is 5%, while USDC’s supply APY is 10% (both are USD-pegged stablecoins).
  2. You deposit USDC to the platform and use it as collateral to borrow DAI.
  3. After that, you exchange your DAI back to USDC.
  4. As the final step, you lend the USDC to others to make a profit on a 5% spread between the two coin’s APYs.

While this crypto arbitrage strategy can work excellently on a single or across multiple DeFi lending protocols, it is crucial to take gas fees into account, which have been notoriously high on Ethereum lately.

Closing Thoughts

When the right opportunities are identified and executed quickly, arbitrage strategies can provide lucrative profits to traders.

However, it’s important to note that the simplest opportunities are the easiest to discover. For that reason, you need to act fast before they disappear.

Furthermore, while some crypto arbitrage opportunities may seem highly profitable at first glance, other factors (e.g., excessively high trading costs or when an exchange charges a high fee for withdrawals) may decrease your earnings or even lead to losses.

For that reason, you need to take everything into account and research every opportunity extensively before executing your crypto arbitrage strategies.

April 28, 2021
Trading

Top 3 Crypto Arbitrage Strategies for Traders

Digitex
Top 3 Crypto Arbitrage Strategies for Traders 2

Sometimes, the same asset is priced differently on two separate markets.

This is when arbitrage comes into play, in which traders spot such market inefficiencies and take advantage of them to make a profit on the price differences.

For example, when BTC trades at $50,000 on exchange A and at $50,200 on exchange B, arbitrageurs could purchase the digital asset on the prior platform and move it to the latter service to sell for a profit (in this case, it would result in a $200 profit for one BTC).

Unlike the traditional financial industry where such inefficiencies are hard to find nowadays, the cryptocurrency space often presents excellent arbitrage opportunities.

For that reason, we have collected the best three crypto arbitrage strategies in this article.

Let’s see them!

1. Simple Arbitrage

As its name suggests, simple arbitrage is among the easiest crypto arbitrage strategies out there and is essentially what we described in our previous example.

When you spot an opportunity, you deposit funds to the cryptocurrency exchange with the lower price, purchase the digital asset, and withdraw it to the other platform to sell it for a higher price.

Since you don’t have to perform any other trades than the ones above, this crypto arbitrage strategy can be executed quickly.

However, due to its simplicity, there is a higher chance of other arbitragers spotting and taking advantage of the same opportunity.

2. Triangular Arbitrage

Taking place either across multiple exchanges or on the same platform, triangular arbitrage aims to profit from the inefficiencies across three cryptocurrencies.

For example, an arbitrage opportunity occurs when the BTC/USDC pair is trading at 50,000 USDC, and one ETH equals 2,000 USDC, but the BTC/ETH pair is priced inefficiently at 30 ETH instead of 25 ETH.

In such a scenario, you execute the triangular arbitrage strategy with the following steps:

  1. You deposit funds to the exchange and purchase 1 BTC for 50,000 USDC.
  2. As the second step, you trade the BTC/ETH pair to convert your Bitcoin to 30 ETH.
  3. Finally, you sell the 30 ETH for 60,000 USDC.

As you can see, this opportunity would have generated you 10,000 USDC in profits with a 20% ROI on three trades. This type of opportunity is very infrequent and must be jumped upon immediately before the exchange’s algorithm quickly corrects the error.

3. Yield Arbitrage

Yield arbitrage allows traders to profit on interest rate inefficiencies between two DeFi lending or staking platforms.

Since the decentralized finance industry is quite new – yet growing at a rapid pace – it’s not unusual to spot irregularities related to interest rates or yields.

With yield arbitrage, a trader borrows funds in a stablecoin with a lower annual percentage yield (APY) for borrowing, exchange it to another stablecoin with a higher supply APY, and uses the latter cryptocurrency to lend funds to others.

An example yield arbitrage strategy goes as follows:

  1. On a DeFi lending platform, DAI’s borrowing APY is 5%, while USDC’s supply APY is 10% (both are USD-pegged stablecoins).
  2. You deposit USDC to the platform and use it as collateral to borrow DAI.
  3. After that, you exchange your DAI back to USDC.
  4. As the final step, you lend the USDC to others to make a profit on a 5% spread between the two coin’s APYs.

While this crypto arbitrage strategy can work excellently on a single or across multiple DeFi lending protocols, it is crucial to take gas fees into account, which have been notoriously high on Ethereum lately.

Closing Thoughts

When the right opportunities are identified and executed quickly, arbitrage strategies can provide lucrative profits to traders.

However, it’s important to note that the simplest opportunities are the easiest to discover. For that reason, you need to act fast before they disappear.

Furthermore, while some crypto arbitrage opportunities may seem highly profitable at first glance, other factors (e.g., excessively high trading costs or when an exchange charges a high fee for withdrawals) may decrease your earnings or even lead to losses.

For that reason, you need to take everything into account and research every opportunity extensively before executing your crypto arbitrage strategies.

Latest News

How Does Zero-Fee Crypto Trading Impact Your ROI? 3

How Does Zero-Fee Crypto Trading Impact Your ROI?

Trading
• Digitex
April 26, 2021

Nearly all cryptocurrency exchanges on the market charge fees for each trade on their platform to keep their business profitable.

While it’s a viable business model used by many brokers in the traditional finance industry, trading costs hurt the profitability of traders even when they seem very low.

For that reason, the next-generation cryptocurrency exchange Digitex has entirely eliminated trading costs on its platform to offer a zero-fee experience for its traders both on the spot and Bitcoin derivatives markets.

In this article, we will show how zero-fee trading impacts our users’ ROI.

More Profits Per Trade

All types of trading fees – such as spreads and commissions – take away a portion of your hard-earned profits.

For example, suppose a cryptocurrency exchange charges 0.15% per trade. In that case, it will take 0.15% from your initial amount when you open a trade, and you will pay another 0.15% after the value your order gets filled at when exiting your position.

While the initial 0.15% hurts your chances of winning trades (more on this later), the second fee takes away a part of your profits (or increases your losses if your ROI is in the negative).

In reality, this works out as follows:

  • You enter and exit 100 positions to trade one BTC futures contract for $1,000 each time, from which you win 60 and lose 40
  • You make a $30 profit on each of your winning trades ($1,800 in total)
  • You lose $20 on the other 40 trades ($800)

As a result, your gross profit equals $1,000. However, since the crypto exchange charges a 0.15% fee on each of your trades, your net profits will decrease to $848.50 ($1000 – $1,545 x 60 + $1.47 x 40).

While a 0.15% fee doesn’t seem like much at first, the exchange ate over 15% of your profits in the above example, which effectively decreases your ROI. Imagine if you were using leverage! That fee would also be increased proportionally as well, which is a huge chunk of your profit.

On the other hand, if you trade on Digitex with zero fees, you will keep 100% of your gains, which would save you $151.50.

Moreover, in the above example, we didn’t even take compound interest into account, which is a powerful financial technique investor legend Warren Buffet used to achieve success on the market.

By compounding interest, you continuously reinvest your trading profits to generate an even better ROI in the long run.

Increased Chances of Winning Trades

In addition to making more profits, zero-fee trading also improves your chances of scoring winning trades.

Since Digitex doesn’t impose a fee when you enter a new position (and won’t be charging any other costs at all), you will start every trade with a 50-50% chance of winning or losing.

For example, as part of your crypto trading strategy, you will exit profitable trades after Bitcoin’s price goes up 1%.

On the other hand, you place a stop-loss order for each of your positions, which will automatically get triggered after the BTC price decreases by 1%.

Say there’s always a 50% chance that the BTC price will surge by at least 1% and also a 50% chance that it will move down by a minimum of 1% with every additional 0.1% gains or losses decreasing the probability by 2%.

On a zero-fee crypto trading platform, this would look like the following:

Realized Profit and Loss (minimum) Probability
+1.1% 48%
+1% 50%
-1% 50%
-1.1% 48%

As you can see, since there are no costs involved, the trader has a real 50% chance to win or lose trades in the above example.

Now, let’s see how this would work out on a digital asset exchange where traders enter every trade with a 0.1% loss due to trading costs.

Realized Profit and Loss (minimum) Probability
+1.1% 46%
+1% 48%
+0.9% 50%
-0.9% 54%
-1% 52%
-1.1% 50%

Since you paid 0.1% to the exchange for entering the position and started with a loss, your odds of scoring a winning trade have decreased to 48%, while the chances for losing one increased to 52%.

And this leads to an even worse scenario if you use a high-frequency crypto trading strategy like scalping, where you aim to take even smaller profits than in the above examples.

Let’s say that you seek to make a profit of 0.2% while triggering a stop-loss each time your realized PnL decreases by 0.2%. Like in the above example, you would have the same 50-50% chance of winning/losing at a zero-fee platform like Digitex with scalping.

On the other hand, you would face serious losses on a crypto exchange that takes a 0.1% cut from traders:

Realized Profit and Loss (minimum) Probability
+0.2% 30%
+0.15% 40%
+0.1% 50%
-0.1% 90%
-0.15% 80%
-0.2% 70%
-0.25% 60%
-0.3% 50%

As you can see from the table above, a 0.1% trading fee would lead to only a 30% chance of winning trades.

For that reason, since the risk/reward ratio was 1:1 in our example, trading at a crypto exchange with such costs will result in serious losses with this crypto trading strategy.

Supercharge Your ROI With Zero-Fee Trading at Digitex

By now, it has become clear that zero-fee trading is an excellent way to boost your ROI on the cryptocurrency market.

Eliminating trading costs not only leads to scoring more profits on your trades but also increases your chances of winning them.

Are you ready to supercharge your ROI while enjoying a zero-fee trading experience on both the crypto spot and futures markets?

Sign up for an account at Digitex now!

April 26, 2021
Trading

How Does Zero-Fee Crypto Trading Impact Your ROI?

Digitex
How Does Zero-Fee Crypto Trading Impact Your ROI? 4

Nearly all cryptocurrency exchanges on the market charge fees for each trade on their platform to keep their business profitable.

While it’s a viable business model used by many brokers in the traditional finance industry, trading costs hurt the profitability of traders even when they seem very low.

For that reason, the next-generation cryptocurrency exchange Digitex has entirely eliminated trading costs on its platform to offer a zero-fee experience for its traders both on the spot and Bitcoin derivatives markets.

In this article, we will show how zero-fee trading impacts our users’ ROI.

More Profits Per Trade

All types of trading fees – such as spreads and commissions – take away a portion of your hard-earned profits.

For example, suppose a cryptocurrency exchange charges 0.15% per trade. In that case, it will take 0.15% from your initial amount when you open a trade, and you will pay another 0.15% after the value your order gets filled at when exiting your position.

While the initial 0.15% hurts your chances of winning trades (more on this later), the second fee takes away a part of your profits (or increases your losses if your ROI is in the negative).

In reality, this works out as follows:

  • You enter and exit 100 positions to trade one BTC futures contract for $1,000 each time, from which you win 60 and lose 40
  • You make a $30 profit on each of your winning trades ($1,800 in total)
  • You lose $20 on the other 40 trades ($800)

As a result, your gross profit equals $1,000. However, since the crypto exchange charges a 0.15% fee on each of your trades, your net profits will decrease to $848.50 ($1000 – $1,545 x 60 + $1.47 x 40).

While a 0.15% fee doesn’t seem like much at first, the exchange ate over 15% of your profits in the above example, which effectively decreases your ROI. Imagine if you were using leverage! That fee would also be increased proportionally as well, which is a huge chunk of your profit.

On the other hand, if you trade on Digitex with zero fees, you will keep 100% of your gains, which would save you $151.50.

Moreover, in the above example, we didn’t even take compound interest into account, which is a powerful financial technique investor legend Warren Buffet used to achieve success on the market.

By compounding interest, you continuously reinvest your trading profits to generate an even better ROI in the long run.

Increased Chances of Winning Trades

In addition to making more profits, zero-fee trading also improves your chances of scoring winning trades.

Since Digitex doesn’t impose a fee when you enter a new position (and won’t be charging any other costs at all), you will start every trade with a 50-50% chance of winning or losing.

For example, as part of your crypto trading strategy, you will exit profitable trades after Bitcoin’s price goes up 1%.

On the other hand, you place a stop-loss order for each of your positions, which will automatically get triggered after the BTC price decreases by 1%.

Say there’s always a 50% chance that the BTC price will surge by at least 1% and also a 50% chance that it will move down by a minimum of 1% with every additional 0.1% gains or losses decreasing the probability by 2%.

On a zero-fee crypto trading platform, this would look like the following:

Realized Profit and Loss (minimum) Probability
+1.1% 48%
+1% 50%
-1% 50%
-1.1% 48%

As you can see, since there are no costs involved, the trader has a real 50% chance to win or lose trades in the above example.

Now, let’s see how this would work out on a digital asset exchange where traders enter every trade with a 0.1% loss due to trading costs.

Realized Profit and Loss (minimum) Probability
+1.1% 46%
+1% 48%
+0.9% 50%
-0.9% 54%
-1% 52%
-1.1% 50%

Since you paid 0.1% to the exchange for entering the position and started with a loss, your odds of scoring a winning trade have decreased to 48%, while the chances for losing one increased to 52%.

And this leads to an even worse scenario if you use a high-frequency crypto trading strategy like scalping, where you aim to take even smaller profits than in the above examples.

Let’s say that you seek to make a profit of 0.2% while triggering a stop-loss each time your realized PnL decreases by 0.2%. Like in the above example, you would have the same 50-50% chance of winning/losing at a zero-fee platform like Digitex with scalping.

On the other hand, you would face serious losses on a crypto exchange that takes a 0.1% cut from traders:

Realized Profit and Loss (minimum) Probability
+0.2% 30%
+0.15% 40%
+0.1% 50%
-0.1% 90%
-0.15% 80%
-0.2% 70%
-0.25% 60%
-0.3% 50%

As you can see from the table above, a 0.1% trading fee would lead to only a 30% chance of winning trades.

For that reason, since the risk/reward ratio was 1:1 in our example, trading at a crypto exchange with such costs will result in serious losses with this crypto trading strategy.

Supercharge Your ROI With Zero-Fee Trading at Digitex

By now, it has become clear that zero-fee trading is an excellent way to boost your ROI on the cryptocurrency market.

Eliminating trading costs not only leads to scoring more profits on your trades but also increases your chances of winning them.

Are you ready to supercharge your ROI while enjoying a zero-fee trading experience on both the crypto spot and futures markets?

Sign up for an account at Digitex now!

Latest News

The Top 5 Mistakes of Beginner Crypto Traders 5

The Top 5 Mistakes of Beginner Crypto Traders

Trading
• Digitex
April 14, 2021

With an over $2 trillion size, the current cryptocurrency bull market provides great opportunities for many investors and traders.

However, as with other asset classes, crypto is not a get-rich-quick scheme in which you put your money to see over 1,000% returns a day after (it can happen, but it’s highly unlikely).

Instead, you have to research assets to pick the right ones, gather knowledge about the market, as well as create and implement a viable crypto trading strategy to succeed.

That said, many newbies have failed to achieve the above, causing them severe losses after pouring money into digital assets.

For that reason, we have collected the top 5 mistakes of beginner crypto traders and some tips to avoid them in this article.

1. Trading Without the Necessary Knowledge

It’s tempting to jump right into day trading crypto without having the necessary trading or market knowledge.

While you may achieve good returns at first, it’s the result of pure luck in most cases. Even worse, when your luck goes away, you will likely face serious losses.

For you to succeed in day trading crypto, you need at least a basic knowledge of cryptocurrencies, market mechanisms, as well as trading assets in general.

If you have acquired that, you will know how to use fundamental analysis, technical analysis, or the combination of the two to spot crypto trading signals and pick the right ones to make decent returns on your trades.

Fortunately, the digital asset industry has tons of guides, tutorials, and even full-fledged courses that you can use to learn crypto trading.

The Digitex Blog is an excellent starting point to read beginner-friendly articles on crypto trading; we highly recommend checking it out!

2. Lack of Crypto Trading Strategies

Even those who have extensive market knowledge often fail to develop their crypto trading strategies before jumping into a trade.

The lack of a decent plan will lead to impulsive trading, which can be best compared to visiting the supermarket hungry without a grocery shopping list and buying all the food you find there.

While both cases lead to spending significantly more money than you would have planned, impulsive decisions in trading can cause severe financial losses.

For that reason, you need a good crypto trading strategy, which includes strict rules to enter and exit trades, tactics to manage your risks, as well as the tools and indicators to research assets and find decent opportunities to trade.

3. Panic Selling

When you are trading cryptocurrencies – or basically any other asset class –, it’s hard to keep your emotions in control.

Greed, fear, hope, and excitement are some of those emotions that prevent traders from making the right decisions.

If you can’t control your emotions, you will likely face the issue of panic selling, in which traders or investors sell a cryptocurrency as soon as it experiences significant losses.

While it makes sense to cut your losses sometimes, you should remember that you will only lose money on a long trade after selling the asset.

If your crypto trading strategy is a great one, you will know when to enter and exit trades, and you won’t experience the panic that would make you sell your digital asset holdings when prices hit bottom.

4. Revenge Trading

One of the most common mistakes of beginner crypto traders is revenge trading, in which one loses funds in a trade and enters into a new, riskier position in an attempt to recover his losses.

In such a case, the trader takes too much risks while his decision is driven by frustration and fear. For these reasons, it’s very likely to lead to further, more significant losses.

Being disciplined, keeping your emotions in control, and leveraging a decent crypto trading strategy is an excellent way to overcome revenge trading.

5. Paying High Exchange Fees

A common misconception among beginner crypto traders is that you have a 50-50% chance to win or lose a trade.

However, in practice, it’s (almost) never true.

Since crypto exchanges impose fees on your trades right after entering a position, you will start trading crypto with a loss.

And things will get worse when you margin trade crypto – a 0.10% fee becomes 10% in case of a 100x leverage – or pick a service provider that features higher costs than average.

The lower the fees, the higher your chances for winning trades; you should remember that.

At Digitex, our top priority is to offer the best crypto trading experience to our traders. For that reason, we have completely eliminated fees, allowing all our users to have access to free crypto trading.

As a result, you can limit their risks and maximize your chances for winning trades while keeping 100% of the profit you make on the platform.

Start trading crypto on Digitex now!

April 14, 2021
Trading

The Top 5 Mistakes of Beginner Crypto Traders

Digitex
The Top 5 Mistakes of Beginner Crypto Traders 6

With an over $2 trillion size, the current cryptocurrency bull market provides great opportunities for many investors and traders.

However, as with other asset classes, crypto is not a get-rich-quick scheme in which you put your money to see over 1,000% returns a day after (it can happen, but it’s highly unlikely).

Instead, you have to research assets to pick the right ones, gather knowledge about the market, as well as create and implement a viable crypto trading strategy to succeed.

That said, many newbies have failed to achieve the above, causing them severe losses after pouring money into digital assets.

For that reason, we have collected the top 5 mistakes of beginner crypto traders and some tips to avoid them in this article.

1. Trading Without the Necessary Knowledge

It’s tempting to jump right into day trading crypto without having the necessary trading or market knowledge.

While you may achieve good returns at first, it’s the result of pure luck in most cases. Even worse, when your luck goes away, you will likely face serious losses.

For you to succeed in day trading crypto, you need at least a basic knowledge of cryptocurrencies, market mechanisms, as well as trading assets in general.

If you have acquired that, you will know how to use fundamental analysis, technical analysis, or the combination of the two to spot crypto trading signals and pick the right ones to make decent returns on your trades.

Fortunately, the digital asset industry has tons of guides, tutorials, and even full-fledged courses that you can use to learn crypto trading.

The Digitex Blog is an excellent starting point to read beginner-friendly articles on crypto trading; we highly recommend checking it out!

2. Lack of Crypto Trading Strategies

Even those who have extensive market knowledge often fail to develop their crypto trading strategies before jumping into a trade.

The lack of a decent plan will lead to impulsive trading, which can be best compared to visiting the supermarket hungry without a grocery shopping list and buying all the food you find there.

While both cases lead to spending significantly more money than you would have planned, impulsive decisions in trading can cause severe financial losses.

For that reason, you need a good crypto trading strategy, which includes strict rules to enter and exit trades, tactics to manage your risks, as well as the tools and indicators to research assets and find decent opportunities to trade.

3. Panic Selling

When you are trading cryptocurrencies – or basically any other asset class –, it’s hard to keep your emotions in control.

Greed, fear, hope, and excitement are some of those emotions that prevent traders from making the right decisions.

If you can’t control your emotions, you will likely face the issue of panic selling, in which traders or investors sell a cryptocurrency as soon as it experiences significant losses.

While it makes sense to cut your losses sometimes, you should remember that you will only lose money on a long trade after selling the asset.

If your crypto trading strategy is a great one, you will know when to enter and exit trades, and you won’t experience the panic that would make you sell your digital asset holdings when prices hit bottom.

4. Revenge Trading

One of the most common mistakes of beginner crypto traders is revenge trading, in which one loses funds in a trade and enters into a new, riskier position in an attempt to recover his losses.

In such a case, the trader takes too much risks while his decision is driven by frustration and fear. For these reasons, it’s very likely to lead to further, more significant losses.

Being disciplined, keeping your emotions in control, and leveraging a decent crypto trading strategy is an excellent way to overcome revenge trading.

5. Paying High Exchange Fees

A common misconception among beginner crypto traders is that you have a 50-50% chance to win or lose a trade.

However, in practice, it’s (almost) never true.

Since crypto exchanges impose fees on your trades right after entering a position, you will start trading crypto with a loss.

And things will get worse when you margin trade crypto – a 0.10% fee becomes 10% in case of a 100x leverage – or pick a service provider that features higher costs than average.

The lower the fees, the higher your chances for winning trades; you should remember that.

At Digitex, our top priority is to offer the best crypto trading experience to our traders. For that reason, we have completely eliminated fees, allowing all our users to have access to free crypto trading.

As a result, you can limit their risks and maximize your chances for winning trades while keeping 100% of the profit you make on the platform.

Start trading crypto on Digitex now!

Latest News

Crypto Trading

Get More Profits Through the Application of Technical Analysis in Crypto Trading

Trading
• Digitex
April 12, 2021

Technical analysis is among the most useful tools for traders, which especially comes in handy when day trading crypto.

For that reason, incorporating technical analysis into your crypto trading strategies is an excellent way to increase your chances for profits on the digital asset market.

In this article, we will explain what technical analysis is, how it is different from fundamental analysis, and what are the advantages and downsides of using it to discover crypto trading signals.

Let’s dive in!

What Is Technical Analysis And How Is it Different From Fundamental Analysis?

Technical analysis refers to the practice of evaluating investments and identifying trading signals by studying trends related to trading activity (e.g., price movement).

Simply put, it helps traders predict future price movements as well as decide whether to enter a position, when and for how long.

Technical analysis usually involves using multiple charting tools and indicators – such as the Relative Strength Index (RSI), the Money Flow Index (MFI), and the Moving Average Convergence Divergence (MACD) – to spot as well as interpret market trends and signals.

Fundamental analysis focuses on identifying an asset’s true value by analyzing its financial data (e.g., sales and earnings), the industry’s condition, and even general statistics about the economy.

On the other hand, technical analysis aims to find how the supply and demand on the market impact an instrument’s price, volume, and volatility.

Also, while fundamental analysis is best used for mid-to-long-term investments, technical analysis can be incorporated into day trading strategies.

Below, you can find the three fundamental principles of technical analysis in trading:

  1. The market prices everything: From a company’s financial data to market sentiment, everything is priced into an asset, according to technical analysts. The only exception is price movements, which are the products of supply and demand for a certain asset.
  2. Prices move in trends: Technical analysts believe that the market rarely moves erratically. Instead, no matter the timeframe used, they assume that prices exhibit trends.
  3. History often repeats itself: Based on market psychology, price movements regularly repeat themselves throughout time due to emotions like fear, excitement, and greed. Technical analysis evaluates these emotions via chart patterns to understand trends and predict future price movements.

What Are the Pros and Cons of Technical Analysis in Crypto?

Technical analysis has been widely popular among traders in the crypto industry. And for a very good reason.

While fundamental analysis works great for general market assets like stocks and bonds, it’s very hard to determine the intrinsic value of cryptocurrencies.

For that reason, technical analysis is a better choice to identify crypto trading signals, especially if we take the high volatility of the asset class into account, which makes it an excellent option for day traders.

Furthermore, technical analysis allows traders to identify and respond to market changes quickly.

With hundreds of indicators to choose from, traders can customize their crypto trading strategies to fit their preferences by leveraging technical analysis.

Combining trading knowledge, practice, and the right tools allows traders to accurately predict future digital asset price movements in most of their trades.

As with every trading practice, technical analysis has its own limitations.

One of its main downsides is related to market behavior, which can be unpredicted on certain occasions. For that reason, technical analysis can’t provide 100% accurate crypto trading signals for users.

Moreover, with so many tools to choose from, it’s hard for beginners to learn the ropes and select the indicators that best fit their crypto trading strategies. Also, some technical analysis tools are more reliable and precise than others.

Closing Thoughts

Along with fundamental analysis, technical analysis is among the most popular practices to evaluate financial decisions.

While the prior evaluates data to calculate the true value of assets to spot the ones trading at a discount, technical analysis is based on an asset’s price charts, identifying patterns to predict future price movements using historical market data and statistics.

However, while it’s nearly impossible to determine the intrinsic value of digital assets, technical analysis tends to work better for crypto traders.

Are you looking to learn more about crypto trading?

Check out the following articles to learn how the Bitcoin volume impacts traders, what the best crypto trading strategies are, and how to profit from scalping futures.

In case you are ready to test your skills, be sure to check out the zero-fee Bitcoin futures exchange Digitex to trade crypto for free!

April 12, 2021
Trading

Get More Profits Through the Application of Technical Analysis in Crypto Trading

Digitex
Crypto Trading

Technical analysis is among the most useful tools for traders, which especially comes in handy when day trading crypto.

For that reason, incorporating technical analysis into your crypto trading strategies is an excellent way to increase your chances for profits on the digital asset market.

In this article, we will explain what technical analysis is, how it is different from fundamental analysis, and what are the advantages and downsides of using it to discover crypto trading signals.

Let’s dive in!

What Is Technical Analysis And How Is it Different From Fundamental Analysis?

Technical analysis refers to the practice of evaluating investments and identifying trading signals by studying trends related to trading activity (e.g., price movement).

Simply put, it helps traders predict future price movements as well as decide whether to enter a position, when and for how long.

Technical analysis usually involves using multiple charting tools and indicators – such as the Relative Strength Index (RSI), the Money Flow Index (MFI), and the Moving Average Convergence Divergence (MACD) – to spot as well as interpret market trends and signals.

Fundamental analysis focuses on identifying an asset’s true value by analyzing its financial data (e.g., sales and earnings), the industry’s condition, and even general statistics about the economy.

On the other hand, technical analysis aims to find how the supply and demand on the market impact an instrument’s price, volume, and volatility.

Also, while fundamental analysis is best used for mid-to-long-term investments, technical analysis can be incorporated into day trading strategies.

Below, you can find the three fundamental principles of technical analysis in trading:

  1. The market prices everything: From a company’s financial data to market sentiment, everything is priced into an asset, according to technical analysts. The only exception is price movements, which are the products of supply and demand for a certain asset.
  2. Prices move in trends: Technical analysts believe that the market rarely moves erratically. Instead, no matter the timeframe used, they assume that prices exhibit trends.
  3. History often repeats itself: Based on market psychology, price movements regularly repeat themselves throughout time due to emotions like fear, excitement, and greed. Technical analysis evaluates these emotions via chart patterns to understand trends and predict future price movements.

What Are the Pros and Cons of Technical Analysis in Crypto?

Technical analysis has been widely popular among traders in the crypto industry. And for a very good reason.

While fundamental analysis works great for general market assets like stocks and bonds, it’s very hard to determine the intrinsic value of cryptocurrencies.

For that reason, technical analysis is a better choice to identify crypto trading signals, especially if we take the high volatility of the asset class into account, which makes it an excellent option for day traders.

Furthermore, technical analysis allows traders to identify and respond to market changes quickly.

With hundreds of indicators to choose from, traders can customize their crypto trading strategies to fit their preferences by leveraging technical analysis.

Combining trading knowledge, practice, and the right tools allows traders to accurately predict future digital asset price movements in most of their trades.

As with every trading practice, technical analysis has its own limitations.

One of its main downsides is related to market behavior, which can be unpredicted on certain occasions. For that reason, technical analysis can’t provide 100% accurate crypto trading signals for users.

Moreover, with so many tools to choose from, it’s hard for beginners to learn the ropes and select the indicators that best fit their crypto trading strategies. Also, some technical analysis tools are more reliable and precise than others.

Closing Thoughts

Along with fundamental analysis, technical analysis is among the most popular practices to evaluate financial decisions.

While the prior evaluates data to calculate the true value of assets to spot the ones trading at a discount, technical analysis is based on an asset’s price charts, identifying patterns to predict future price movements using historical market data and statistics.

However, while it’s nearly impossible to determine the intrinsic value of digital assets, technical analysis tends to work better for crypto traders.

Are you looking to learn more about crypto trading?

Check out the following articles to learn how the Bitcoin volume impacts traders, what the best crypto trading strategies are, and how to profit from scalping futures.

In case you are ready to test your skills, be sure to check out the zero-fee Bitcoin futures exchange Digitex to trade crypto for free!

Latest News

The Best 3 Crypto Trading Strategies for Beginners 7

The Best 3 Crypto Trading Strategies for Beginners

Cryptocurrency
Digitex Futures
Trading
• Digitex
April 8, 2021

Whether you are holding for the long term or day trading crypto, you need a viable strategy to profit from the current bull market’s price moves.

That said, your crypto trading strategies shouldn’t be overly complex to avoid grave mistakes like misinterpreting signals.

For that reason, we have collected the best three crypto trading strategies both beginners and advanced traders can use to gain exposure to the rapidly-growing digital asset market.

Let’s see them!

1. Momentum Trading

Momentum trading is one of the most beginner-friendly crypto trading strategies out there.

In the financial industry, momentum refers to the speed at which an asset’s value is changing in either direction.

Instead of buying the dip and selling high, momentum traders ride the wave, entering a trade when a cryptocurrency’s price has already grown considerably while exiting their positions at a trend’s peak.

Using both fundamental and technical analysis tools, momentum traders screen the market to find assets that have recently entered into a strong trend. Once they spot one, they open long positions, which they only exit after a trend reversal occurs.

Even after a trend reversal, momentum traders may decide to enter the market again to short the asset if the downtrend is strong enough.

While it may sound counterproductive at first, this type of cryptocurrency trading strategy makes great sense in the digital asset space, where momentum occurs quite often.

For example, in the current bull market, a sudden increase in the demand for an asset, positive news for a project, or even just fear of missing out (FOMO) kicking in can all create strong, rapidly accelerating uptrends.

Momentum traders can take advantage of all the above while leveraging key indicators like market volatility, the Bitcoin trading volume, and timeframe analysis to gather crypto trading signals.

On the other hand, as with all crypto trading strategies, momentum trading also involves some risks. For that reason, effective risk management is crucial to achieving success with this strategy.

2. Swing Trading

Swing trading is also an excellent beginner-friendly crypto trading strategy.

Unlike long-term holding or day trading crypto, this strategy aims to make short- to medium-term profits on digital assets’ price movements.

With trades lasting from a couple of days to multiple months, swing traders use a combination of fundamental and technical analysis to spot crypto trading signals.

While increasing the time on the market allows traders to maximize their short-term profit potential, swing trading doesn’t involve as much effort as day trading. Instead of checking charts every day, swing traders enter and exit positions once every few days or weeks.

On the other hand, swing traders have to regularly monitor the market for potential reversals to minimize their risks and increase their profits.

3. Scalping

Scalping is a straightforward, high-frequency crypto day trading strategy in which traders aim to make quick profits on digital assets’ minor price changes.

Since they only focus on extremely short-term price movements, scalpers don’t take an asset’s fundamentals into account. Instead, they rely exclusively on technical analysis to enter many quick trades.

Since the profits are small for each trade, those using this crypto trading strategy usually enter and exit hundreds of positions in a day.

Scalping is based on the following three trading principles:

  • Less exposure to the market limits traders’ risks as the probability is much lower for getting impacted by an adverse event than for longer-term strategies.
  • It’s easier for an asset to make smaller moves than larger ones (e.g., a $10 change in the BTC price is more likely than a $1,000).
  • Smaller moves are much more frequent than bigger ones, even when the market is relatively quiet.

In addition to the above, scalpers must be disciplined while using strict entry and exit strategies to limit their risks since a large loss is enough to take away most of their profits.

It’s also essential for traders utilizing this crypto trading strategy to pick an exchange with cost-efficient fees as high spreads can easily turn their gains into losses.

For that reason, the Digitex exchange is the perfect choice for scalpers and other high-frequency traders as they can enjoy a free crypto trading experience to maximize their profits.

 

April 8, 2021
Cryptocurrency
Digitex Futures
Trading

The Best 3 Crypto Trading Strategies for Beginners

Digitex
The Best 3 Crypto Trading Strategies for Beginners 8

Whether you are holding for the long term or day trading crypto, you need a viable strategy to profit from the current bull market’s price moves.

That said, your crypto trading strategies shouldn’t be overly complex to avoid grave mistakes like misinterpreting signals.

For that reason, we have collected the best three crypto trading strategies both beginners and advanced traders can use to gain exposure to the rapidly-growing digital asset market.

Let’s see them!

1. Momentum Trading

Momentum trading is one of the most beginner-friendly crypto trading strategies out there.

In the financial industry, momentum refers to the speed at which an asset’s value is changing in either direction.

Instead of buying the dip and selling high, momentum traders ride the wave, entering a trade when a cryptocurrency’s price has already grown considerably while exiting their positions at a trend’s peak.

Using both fundamental and technical analysis tools, momentum traders screen the market to find assets that have recently entered into a strong trend. Once they spot one, they open long positions, which they only exit after a trend reversal occurs.

Even after a trend reversal, momentum traders may decide to enter the market again to short the asset if the downtrend is strong enough.

While it may sound counterproductive at first, this type of cryptocurrency trading strategy makes great sense in the digital asset space, where momentum occurs quite often.

For example, in the current bull market, a sudden increase in the demand for an asset, positive news for a project, or even just fear of missing out (FOMO) kicking in can all create strong, rapidly accelerating uptrends.

Momentum traders can take advantage of all the above while leveraging key indicators like market volatility, the Bitcoin trading volume, and timeframe analysis to gather crypto trading signals.

On the other hand, as with all crypto trading strategies, momentum trading also involves some risks. For that reason, effective risk management is crucial to achieving success with this strategy.

2. Swing Trading

Swing trading is also an excellent beginner-friendly crypto trading strategy.

Unlike long-term holding or day trading crypto, this strategy aims to make short- to medium-term profits on digital assets’ price movements.

With trades lasting from a couple of days to multiple months, swing traders use a combination of fundamental and technical analysis to spot crypto trading signals.

While increasing the time on the market allows traders to maximize their short-term profit potential, swing trading doesn’t involve as much effort as day trading. Instead of checking charts every day, swing traders enter and exit positions once every few days or weeks.

On the other hand, swing traders have to regularly monitor the market for potential reversals to minimize their risks and increase their profits.

3. Scalping

Scalping is a straightforward, high-frequency crypto day trading strategy in which traders aim to make quick profits on digital assets’ minor price changes.

Since they only focus on extremely short-term price movements, scalpers don’t take an asset’s fundamentals into account. Instead, they rely exclusively on technical analysis to enter many quick trades.

Since the profits are small for each trade, those using this crypto trading strategy usually enter and exit hundreds of positions in a day.

Scalping is based on the following three trading principles:

  • Less exposure to the market limits traders’ risks as the probability is much lower for getting impacted by an adverse event than for longer-term strategies.
  • It’s easier for an asset to make smaller moves than larger ones (e.g., a $10 change in the BTC price is more likely than a $1,000).
  • Smaller moves are much more frequent than bigger ones, even when the market is relatively quiet.

In addition to the above, scalpers must be disciplined while using strict entry and exit strategies to limit their risks since a large loss is enough to take away most of their profits.

It’s also essential for traders utilizing this crypto trading strategy to pick an exchange with cost-efficient fees as high spreads can easily turn their gains into losses.

For that reason, the Digitex exchange is the perfect choice for scalpers and other high-frequency traders as they can enjoy a free crypto trading experience to maximize their profits.

 

Latest News

4 Ways that Bitcoin Trading Volumes Impact Crypto Trading Strategies 9

4 Ways that Bitcoin Trading Volumes Impact Crypto Trading Strategies

Cryptocurrency
Crypto Industry
Trading
• Digitex
April 7, 2021

The Bitcoin trading volume is a crucial indicator for both cryptocurrency investors and traders.

According to a CoinDesk Markets survey, trading volume was ranked as the top indicator traders “couldn’t live without,” scoring 38% among all poll respondents.

Currently, the 24-hour BTC trading volume is standing at nearly $73 billion, which is up by 8% since the last day. 

4 Ways that Bitcoin Trading Volumes Impact Crypto Trading Strategies 10

But what is the Bitcoin trading volume, what does it tell us about the market, and how does it impact crypto trading strategies Let’s explore the answers to the above questions together in this article!

Bitcoin Trading Volume Explained

The Bitcoin trading volume measures how much BTC has been traded on cryptocurrency exchanges in a certain period of time (the most common timeframe is 24 hours).

For Bitcoin derivatives trading, the volume provides data about the number of futures or options contracts changing hands between buyers and sellers.

When buyers and sellers reach an agreement at a certain price for a trading pair (e.g., BTC/USD), the exchange facilitating the trade records the transaction and uses that data to calculate the trading volume for the digital asset.

For example, suppose Alice sells 1 BTC to Bob at $60,000. In that case, the facilitating exchange records a volume of either $60,000 or 1 BTC for the BTC/USD trading pair based on the currency the service uses for denominating it.

How Does the Bitcoin Trading Volume Impact Crypto Trading Strategies?

Whether you are day trading crypto or holding digital assets for the long-term, you can use the Bitcoin trading volume to gather valuable insights about the market.

For that reason, the Bitcoin trading volume has an impact on crypto trading strategies and the financial decisions of users.

Traders can use volumes to discover the following crypto trading signals:

  1. Confirm trends: During a bull market, a high trading volume with great enthusiasm from buyers is crucial to keep pushing prices upwards. For that reason, it’s usually a bullish signal when both the volume and the price are increasing. On the other hand, when a digital asset’s price is surging, but its trading volume is decreasing, it is a warning sign of an upcoming potential reversal.
  2. Exhaustion moves: Monitoring the trading volume is also an excellent way to identify exhaustion moves. Featuring a sharp move into any direction as well as a significant volume growth, an exhaustion move can indicate a trend’s potential end.
  3. Price reversals: After excessive price movements in either direction, a significantly high volume paired with minor changes in the price can indicate that a reversal is imminent, in which the asset’s value will move in the opposite direction.
  4. Dead projects: While there are over 9,100 cryptocurrencies present on the market, not all of them have active projects behind them. Monitoring the current and historical trading volume of a cryptocurrency is an excellent way to limit your risks by filtering out dead coins with very low daily volumes.

Closing Thoughts

When investing for the long term or day trading crypto, incorporating the Bitcoin trading volume in your strategy helps you discover crucial market trends and gather signals that support you to make the right decisions.

For that reason, it’s essential to adjust your crypto trading strategy to include the Bitcoin trading volume as part of your fundamental and technical analysis.

In the meantime, be sure to leverage your new digital asset trading strategies at the next-generation futures trading platform Digitex to trade crypto for free while enjoying the benefits of a robust exchange solution.

Also, you shouldn’t forget to check out DGTX, Digitex’s native exchange token, which you can buy now with a credit card

 

April 7, 2021
Cryptocurrency
Crypto Industry
Trading

4 Ways that Bitcoin Trading Volumes Impact Crypto Trading Strategies

Digitex
4 Ways that Bitcoin Trading Volumes Impact Crypto Trading Strategies 11

The Bitcoin trading volume is a crucial indicator for both cryptocurrency investors and traders.

According to a CoinDesk Markets survey, trading volume was ranked as the top indicator traders “couldn’t live without,” scoring 38% among all poll respondents.

Currently, the 24-hour BTC trading volume is standing at nearly $73 billion, which is up by 8% since the last day. 

4 Ways that Bitcoin Trading Volumes Impact Crypto Trading Strategies 12

But what is the Bitcoin trading volume, what does it tell us about the market, and how does it impact crypto trading strategies Let’s explore the answers to the above questions together in this article!

Bitcoin Trading Volume Explained

The Bitcoin trading volume measures how much BTC has been traded on cryptocurrency exchanges in a certain period of time (the most common timeframe is 24 hours).

For Bitcoin derivatives trading, the volume provides data about the number of futures or options contracts changing hands between buyers and sellers.

When buyers and sellers reach an agreement at a certain price for a trading pair (e.g., BTC/USD), the exchange facilitating the trade records the transaction and uses that data to calculate the trading volume for the digital asset.

For example, suppose Alice sells 1 BTC to Bob at $60,000. In that case, the facilitating exchange records a volume of either $60,000 or 1 BTC for the BTC/USD trading pair based on the currency the service uses for denominating it.

How Does the Bitcoin Trading Volume Impact Crypto Trading Strategies?

Whether you are day trading crypto or holding digital assets for the long-term, you can use the Bitcoin trading volume to gather valuable insights about the market.

For that reason, the Bitcoin trading volume has an impact on crypto trading strategies and the financial decisions of users.

Traders can use volumes to discover the following crypto trading signals:

  1. Confirm trends: During a bull market, a high trading volume with great enthusiasm from buyers is crucial to keep pushing prices upwards. For that reason, it’s usually a bullish signal when both the volume and the price are increasing. On the other hand, when a digital asset’s price is surging, but its trading volume is decreasing, it is a warning sign of an upcoming potential reversal.
  2. Exhaustion moves: Monitoring the trading volume is also an excellent way to identify exhaustion moves. Featuring a sharp move into any direction as well as a significant volume growth, an exhaustion move can indicate a trend’s potential end.
  3. Price reversals: After excessive price movements in either direction, a significantly high volume paired with minor changes in the price can indicate that a reversal is imminent, in which the asset’s value will move in the opposite direction.
  4. Dead projects: While there are over 9,100 cryptocurrencies present on the market, not all of them have active projects behind them. Monitoring the current and historical trading volume of a cryptocurrency is an excellent way to limit your risks by filtering out dead coins with very low daily volumes.

Closing Thoughts

When investing for the long term or day trading crypto, incorporating the Bitcoin trading volume in your strategy helps you discover crucial market trends and gather signals that support you to make the right decisions.

For that reason, it’s essential to adjust your crypto trading strategy to include the Bitcoin trading volume as part of your fundamental and technical analysis.

In the meantime, be sure to leverage your new digital asset trading strategies at the next-generation futures trading platform Digitex to trade crypto for free while enjoying the benefits of a robust exchange solution.

Also, you shouldn’t forget to check out DGTX, Digitex’s native exchange token, which you can buy now with a credit card

 

Latest News

Trade

Learn to Trade Profitably with Trader Cobb

Trading
• Digitex
August 10, 2020

If you read Fridays blog post, then youll know we have a stellar lineup of educational content coming for the DFE. Trading profitably is both an art and a science, but anyone can learn it, given the right tools. Here, we dive into whats coming up starting this week, from pro trader and educator, Trader Cobb. Read to the end to also find out whats coming up this week on the DFE.

Craig Cobb, better known as Trader Cobb, is one of the best-known pro traders and crypto trading educators in the business. He has over 15 years of experience, having started out in the traditional markets trading forex pairs, stocks, bonds, and commodities.

For the last three years, he’s been fully dedicated to cryptocurrency trading. With over 10,000 students around the world, there is nobody better to help you unravel the mysteries of scalp trading on the Digitex Futures exchange.

Over the course of four separate webinar sessions, Craig will teach you the tools he has learned to use over his 15-year trading career. These tools will help you increase your chances of trading success, decrease your loss risk, and take emotions out of the process so you’ll trade based on facts.

You’ll receive a complete trading strategy with a checklist to follow as you go. You’ll also get a trading business plan. Craig is a firm believer that trading isn’t just about charts – you should treat it as you would a business. So you’ll also get a trading business plan to help you as you transition from developing your trading hobby into a business.

How to Join

The best news is that joining Craig’s webinars is completely free! There are only two simple prerequisites. Firstly, you’ll need to have an account on the Digitex Futures exchange so that you can follow along with the webinar instructions. Secondly, you should sign up for the webinar on the dedicated registration page.

That’s it! All you then need to do is turn up on the dates, and watch and learn as Craig unveils his trading strategy over four separate sessions.

Webinar Schedule of Events

The full schedule of events is as follows. Please note that as Craig is broadcasting from his home in Australia, the timezones given are in Australian Eastern Standard Time (AEST). We’ve provided times here in UTC too.

Part 1: High Probability

Thursday, August 13, 2020, 9 pm AEST/11 am UTC

Every building needs solid foundations, and your trading business and plan need the same. This chapter will help you to plan out the type of trader you will become and provide you the blueprint that you will create with Craig’s guidance to move forward through the chapters. Trading is a business and we need to plan it!

Part 2: Master Price Action

Thursday, August 20, 2020, 9 pm AEST/11 am UTC

When you bake a cake you need to know the ingredients for that cake, you don’t need to know about cooking a lasagna. Craig will focus you on the ingredients needed to bake the perfect trade – process-driven, outcome-based, and zero emotions. You’ve got that here.

Part 3: The Crypto Cradle Strategy

Thursday, August 27, 2020, 9 pm AEST/11 am UTC

This is what most people have been waiting for! In parts 1 and 2, you have set out to plan the type of trader you wish to be and learned the ingredients to be ready for this part 3.

You’re now ready to learn and use the “Crypto Cradle” strategy; arguably the most common trading set up out there.

Part 4: Management of Risk, Mindset, and Progress

Thursday, September 3, 2020, 9 pm AEST/11 am UTC

You have the strategy from the first three webinar episodes of this series, you have the scans and watch list videos, and now it’s about keeping your headstrong and keeping the account growing!

Especially if you’re new to trading or scalping, you don’t want to miss this series. Make sure you sign up before the start time to secure your slot and share it with any of your friends who want to learn more about profitable scalp trading on the DFE!

What’s Coming Up This Week on the DFE

Along with Craig’s webinars, we have some much-anticipated updates to the DFE being rolled out this week. First up, the API will be launched on mainnet, allowing algorithmic traders to plug in their bots and trade automatically for the first time. We know that the API has been in demand ever since we started onboarding traders to the mainnet, and we’re looking forward to the further injection of liquidity that it will bring to the DFE. Watch the blog for a video from Cryptrader explaining how to use it.

Secondly, we explained last week that we are closing the Digitex Treasury and replacing it with the DGTX Converter. The Converter will allow users to deposit a variety of cryptocurrencies, including BTC, ETH, and USDT, onto the DFE and convert them to DGTX so they can start trading with zero fees.

The development team has been working extremely hard to bring this to life, and we’re pleased to confirm it will go live on the testnet later this week. As soon as it’s proving to work without any issue, we will migrate it to the mainnet.

Keep watching the blog for more updates about DFE features and functionality, as they happen. And if you want more information about what to expect, check out our recently published roadmap, which lays out everything still to come in 2020. Stay tuned!

August 10, 2020
Trading

Learn to Trade Profitably with Trader Cobb

Digitex
Trade

If you read Fridays blog post, then youll know we have a stellar lineup of educational content coming for the DFE. Trading profitably is both an art and a science, but anyone can learn it, given the right tools. Here, we dive into whats coming up starting this week, from pro trader and educator, Trader Cobb. Read to the end to also find out whats coming up this week on the DFE.

Craig Cobb, better known as Trader Cobb, is one of the best-known pro traders and crypto trading educators in the business. He has over 15 years of experience, having started out in the traditional markets trading forex pairs, stocks, bonds, and commodities.

For the last three years, he’s been fully dedicated to cryptocurrency trading. With over 10,000 students around the world, there is nobody better to help you unravel the mysteries of scalp trading on the Digitex Futures exchange.

Over the course of four separate webinar sessions, Craig will teach you the tools he has learned to use over his 15-year trading career. These tools will help you increase your chances of trading success, decrease your loss risk, and take emotions out of the process so you’ll trade based on facts.

You’ll receive a complete trading strategy with a checklist to follow as you go. You’ll also get a trading business plan. Craig is a firm believer that trading isn’t just about charts – you should treat it as you would a business. So you’ll also get a trading business plan to help you as you transition from developing your trading hobby into a business.

How to Join

The best news is that joining Craig’s webinars is completely free! There are only two simple prerequisites. Firstly, you’ll need to have an account on the Digitex Futures exchange so that you can follow along with the webinar instructions. Secondly, you should sign up for the webinar on the dedicated registration page.

That’s it! All you then need to do is turn up on the dates, and watch and learn as Craig unveils his trading strategy over four separate sessions.

Webinar Schedule of Events

The full schedule of events is as follows. Please note that as Craig is broadcasting from his home in Australia, the timezones given are in Australian Eastern Standard Time (AEST). We’ve provided times here in UTC too.

Part 1: High Probability

Thursday, August 13, 2020, 9 pm AEST/11 am UTC

Every building needs solid foundations, and your trading business and plan need the same. This chapter will help you to plan out the type of trader you will become and provide you the blueprint that you will create with Craig’s guidance to move forward through the chapters. Trading is a business and we need to plan it!

Part 2: Master Price Action

Thursday, August 20, 2020, 9 pm AEST/11 am UTC

When you bake a cake you need to know the ingredients for that cake, you don’t need to know about cooking a lasagna. Craig will focus you on the ingredients needed to bake the perfect trade – process-driven, outcome-based, and zero emotions. You’ve got that here.

Part 3: The Crypto Cradle Strategy

Thursday, August 27, 2020, 9 pm AEST/11 am UTC

This is what most people have been waiting for! In parts 1 and 2, you have set out to plan the type of trader you wish to be and learned the ingredients to be ready for this part 3.

You’re now ready to learn and use the “Crypto Cradle” strategy; arguably the most common trading set up out there.

Part 4: Management of Risk, Mindset, and Progress

Thursday, September 3, 2020, 9 pm AEST/11 am UTC

You have the strategy from the first three webinar episodes of this series, you have the scans and watch list videos, and now it’s about keeping your headstrong and keeping the account growing!

Especially if you’re new to trading or scalping, you don’t want to miss this series. Make sure you sign up before the start time to secure your slot and share it with any of your friends who want to learn more about profitable scalp trading on the DFE!

What’s Coming Up This Week on the DFE

Along with Craig’s webinars, we have some much-anticipated updates to the DFE being rolled out this week. First up, the API will be launched on mainnet, allowing algorithmic traders to plug in their bots and trade automatically for the first time. We know that the API has been in demand ever since we started onboarding traders to the mainnet, and we’re looking forward to the further injection of liquidity that it will bring to the DFE. Watch the blog for a video from Cryptrader explaining how to use it.

Secondly, we explained last week that we are closing the Digitex Treasury and replacing it with the DGTX Converter. The Converter will allow users to deposit a variety of cryptocurrencies, including BTC, ETH, and USDT, onto the DFE and convert them to DGTX so they can start trading with zero fees.

The development team has been working extremely hard to bring this to life, and we’re pleased to confirm it will go live on the testnet later this week. As soon as it’s proving to work without any issue, we will migrate it to the mainnet.

Keep watching the blog for more updates about DFE features and functionality, as they happen. And if you want more information about what to expect, check out our recently published roadmap, which lays out everything still to come in 2020. Stay tuned!

Latest News

bitcoin

A Technical Index To Help You Time Bitcoin’s Price Action

Trading
• Ali Martinez
June 23, 2020

Thousands of technical indicators are used by traders all over the world to try to forecast the direction of Bitcoin’s trend and profit from it. While most of these indexes are easily accessible to the public, there is one, in particular, that is widely used by institutional investors. Here, we demonstrate how retail traders can use it to their advantage. 

The Tom Demark (TD) Sequential indicator is often described as one of the most efficient gauges since it can be easily adapted to any trading strategy. This index serves the purpose of identifying local tops and bottoms as it signals when an uptrend or a downtrend is about to reach an exhaustion point and reverse.     

Over the years, the TD setup has proven to be essential in determining Bitcoin’s price action. In 2020, for instance, it was able to predict one of the most significant corrections that the flagship cryptocurrency has seen thus far. 

In mid-February when Bitcoin surged to a yearly high of $10,500, the TD Sequential presented a sell signal in the form of a green nine candlestick. Following the bearish formation, BTC went through a massive bearish impulse that saw its price plummet by nearly 63%.

Then, it was also able to accurately estimate that BTC was reaching an oversold territory on March 16. After providing a buy signal in the form of a red nine candlestick that transitioned into a green one, the price of Bitcoin recovered over 56% of the losses incurred.  

Bitcoin US dollar price chart
TD Sequential Times BTC’s Price Action During March’s Market Meltdown. (Source: TradingView)

The high level of precision that this technical index has to determine where Bitcoin is headed next, makes it ideal for any trader to consider it before entering any long or short positions. For this reason, we will explore some of the most simple and effective rules of the TD Sequential to help you time the price action of the bellwether cryptocurrency.  

When to Buy and When to Sell?

The TD setup usually presents different buy and sell signals that are correlated with Bitcoin’s price action. These vary between aggressive, combo, and sequential 13 candlesticks as well as others. But for now, we will direct our focus towards the most significant bullish and bearish formation that will boost your trading strategy. 

The most important buy and sell signals start with the completion of a nine candlesticks count. When a nine candlesticks countdown is completed, it is at that point that the TD Sequential indicates that a pullback or trend reversal is about to take place. This can happen in an upward or downward direction. 

When it occurs to the upside, the bearish formation develops in the form of a green nine candlestick that forecasts a one to four candlesticks correction or the beginning of a new downward countdown. Conversely, when the nine candlesticks count happens in a downward trend, the buy signal develops in the form of a red nine candlestick estimating that a bullish impulse is underway. 

It is worth noting that green nine and red nine candlesticks can transition into red or green one candlesticks, respectively, depending on Bitcoin’s price action. But this does not invalidate the forecast of each signal. 

A look at BTC’s 1-day chart shows how the formation of green and red nine candlesticks has provided several opportunities to profit since mid-December. Traders who rigorously followed these signals since then would have made at least 180% in profits. Meanwhile, those who bought Bitcoin around December 16, 2019, would have 47% returns.  

Bitcoin US dollar price chart
TD Setup Provides Sizable Opportunites to Profit. (Source: TradingView)

Another important rule to have in mind when using the TD Sequential indicator is that a green two candlestick trading above a preceding green one candle can have the potential to invalidate a sell signal. The same goes when a red nine candlestick develops and there is a red two candlestick trading below the preceding red one candle. 

If you’re already trading on the DFE mainnet, then our zero-fee trading environment is perfect for testing out these kinds of indicators in your trading strategy without the edge of commissions working against you.

If you’re still waiting for the chance to get onto the DFE mainnet, then why not test out the TD Sequential indicator on the Digitex testnet platform? It’s free to sign up and doing so means you’re automatically queued for a mainnet account. We’re onboarding more and more traders every week, turning the DFE into one of the most liquid exchanges on the market.

June 23, 2020
Trading

A Technical Index To Help You Time Bitcoin’s Price Action

Ali Martinez
bitcoin

Thousands of technical indicators are used by traders all over the world to try to forecast the direction of Bitcoin’s trend and profit from it. While most of these indexes are easily accessible to the public, there is one, in particular, that is widely used by institutional investors. Here, we demonstrate how retail traders can use it to their advantage. 

The Tom Demark (TD) Sequential indicator is often described as one of the most efficient gauges since it can be easily adapted to any trading strategy. This index serves the purpose of identifying local tops and bottoms as it signals when an uptrend or a downtrend is about to reach an exhaustion point and reverse.     

Over the years, the TD setup has proven to be essential in determining Bitcoin’s price action. In 2020, for instance, it was able to predict one of the most significant corrections that the flagship cryptocurrency has seen thus far. 

In mid-February when Bitcoin surged to a yearly high of $10,500, the TD Sequential presented a sell signal in the form of a green nine candlestick. Following the bearish formation, BTC went through a massive bearish impulse that saw its price plummet by nearly 63%.

Then, it was also able to accurately estimate that BTC was reaching an oversold territory on March 16. After providing a buy signal in the form of a red nine candlestick that transitioned into a green one, the price of Bitcoin recovered over 56% of the losses incurred.  

Bitcoin US dollar price chart
TD Sequential Times BTC’s Price Action During March’s Market Meltdown. (Source: TradingView)

The high level of precision that this technical index has to determine where Bitcoin is headed next, makes it ideal for any trader to consider it before entering any long or short positions. For this reason, we will explore some of the most simple and effective rules of the TD Sequential to help you time the price action of the bellwether cryptocurrency.  

When to Buy and When to Sell?

The TD setup usually presents different buy and sell signals that are correlated with Bitcoin’s price action. These vary between aggressive, combo, and sequential 13 candlesticks as well as others. But for now, we will direct our focus towards the most significant bullish and bearish formation that will boost your trading strategy. 

The most important buy and sell signals start with the completion of a nine candlesticks count. When a nine candlesticks countdown is completed, it is at that point that the TD Sequential indicates that a pullback or trend reversal is about to take place. This can happen in an upward or downward direction. 

When it occurs to the upside, the bearish formation develops in the form of a green nine candlestick that forecasts a one to four candlesticks correction or the beginning of a new downward countdown. Conversely, when the nine candlesticks count happens in a downward trend, the buy signal develops in the form of a red nine candlestick estimating that a bullish impulse is underway. 

It is worth noting that green nine and red nine candlesticks can transition into red or green one candlesticks, respectively, depending on Bitcoin’s price action. But this does not invalidate the forecast of each signal. 

A look at BTC’s 1-day chart shows how the formation of green and red nine candlesticks has provided several opportunities to profit since mid-December. Traders who rigorously followed these signals since then would have made at least 180% in profits. Meanwhile, those who bought Bitcoin around December 16, 2019, would have 47% returns.  

Bitcoin US dollar price chart
TD Setup Provides Sizable Opportunites to Profit. (Source: TradingView)

Another important rule to have in mind when using the TD Sequential indicator is that a green two candlestick trading above a preceding green one candle can have the potential to invalidate a sell signal. The same goes when a red nine candlestick develops and there is a red two candlestick trading below the preceding red one candle. 

If you’re already trading on the DFE mainnet, then our zero-fee trading environment is perfect for testing out these kinds of indicators in your trading strategy without the edge of commissions working against you.

If you’re still waiting for the chance to get onto the DFE mainnet, then why not test out the TD Sequential indicator on the Digitex testnet platform? It’s free to sign up and doing so means you’re automatically queued for a mainnet account. We’re onboarding more and more traders every week, turning the DFE into one of the most liquid exchanges on the market.

Latest News

Simple Habits to Boost Trading Profits 13

Simple Habits to Boost Trading Profits

Trading
• Ali Martinez
May 26, 2020

A quick glance at the candlestick chart of any cryptocurrency in the market may seem to provide a wide range of opportunities to profit. With some altcoins appreciating over 100% in a matter of days, as many new DeFi tokens are showing us recently, even the biggest crypto skeptic would think, “If I had bought here, I could have doubled (or more!) my investment in less than a week.”

Remember, at its peak, DGTX offered a 1600% return on its ICO value.

But the truth of the matter is that trading is not easy.

There is a widely known statistic that says that 90% of traders are not profitable. So over time, 80% of those who endeavor into this profession lose money, 10% usually break even, and 10% percent are able to generate returns from the price action in the markets.

By understanding these figures, Digitex Futures Exchange is doing everything in its power to help traders around the world reach their financial goals. Not only can investors and market participants alike benefit from this zero-commission trading platform, but our team has also put out valuable educational material that will help you become part of the 10% traders who consistently make money.

Now, we want to drive your attention toward risk management and position sizing. Having a clear picture of the risk your account can tolerate will help you find the right position size for your next trade.

With this information, you will be able to maximize your profits and minimize your losses the moment you start applying these simple habits.

Plan Your Trade, Trade Your Plan

Risk management is one of the many areas of trading that is often disregarded by most of those at the beginning of their trading journey. However, understanding what is at stake before entering any trade is what separates successful traders from gamblers.

A profitable trader usually determines where he is going to place a stop-loss order before even thinking about the profits a trade could generate. This type of order cannot be set at random price levels. They need to make sense so that they are not triggered by the regular fluctuation in the market.

As a rule of thumb, most retail investors risk no more than 2% of their investment capital on any single trade, and hedge fund managers usually risk less than this amount, according to Investopedia.

Assume you have investment capital of $1,000 in your trading account. If you risk 2% on every trade in your account, that translates to a $20 potential loss per trade. This means that a losing trade will not wipe out your entire capital. For this to happen, you would have to lose 50 consecutive trades, or 100 trades in a row if you reduce the risk to 1%.

Now that you have a better understanding of how much capital you can lose per trade, determining the size of your positions is very easy. We will illustrate this idea by employing different technical indicators to help time a potential trade.

Executing a Well Sized Trade

The Tom Demark (TD) Sequential indicator is currently on a red nine candlestick on Ethereum’s 45-min chart. This index estimates that if the same price action continues, Ether could be preparing for a rebound.

Indeed, the bullish formation forecasts a one to four candlesticks upswing before the continuation of the downtrend. Breaking above the 7 moving average within this time frame will add credence to the optimistic outlook.

If this were to happen, ETH could find resistance around the 50 moving average. But a more significant barrier to pay attention to sits by the 100 moving average since this area has been able to reject the price of Ethereum before.

Ethereum US dollar price chart
TD Setup Estimates that Bullish Momentum Is Building Up. (Source: TradingView)

With the high probability of a long trade underway, you need to remember first that your maximum account risk is at 2% so you cannot risk more than $20 per trade, assuming that your investment capital is $1,000.

To figure out the correct position size you will take into consideration where to place your stop-loss order and your entry point. A few cents below the recent low is a reasonable price to set your stop-loss order, which could be around $197. If you were to enter the long position around the current price levels of $199, the trade risk is $2 per ETH.

By dividing your account risk, which is $20 per trade, by the trade risk, which is $2 per ETH, you will determine that the right position size for this long trade is up to 10 ETH. If everything plays out and this altcoin surges to the 50 moving average you could make $40 while a sudden downswing to $197 will kick you out of the trade with a $20 loss.

Now, it is time for you to calculate what is the maximum risk your trading account can tolerate so you can define the right position size for your next trade.

Understanding what you are doing before you trade is vital if you want to minimize your losses. That’s why, at Digitex Futures, we have our testnet open alongside the actual trading platform so that you can practice as much as you want before you start trading. Sign up for an account now and you can choose testnet or mainnet to either hone your skills first or get started trading right away.

May 26, 2020
Trading

Simple Habits to Boost Trading Profits

Ali Martinez
Simple Habits to Boost Trading Profits 14

A quick glance at the candlestick chart of any cryptocurrency in the market may seem to provide a wide range of opportunities to profit. With some altcoins appreciating over 100% in a matter of days, as many new DeFi tokens are showing us recently, even the biggest crypto skeptic would think, “If I had bought here, I could have doubled (or more!) my investment in less than a week.”

Remember, at its peak, DGTX offered a 1600% return on its ICO value.

But the truth of the matter is that trading is not easy.

There is a widely known statistic that says that 90% of traders are not profitable. So over time, 80% of those who endeavor into this profession lose money, 10% usually break even, and 10% percent are able to generate returns from the price action in the markets.

By understanding these figures, Digitex Futures Exchange is doing everything in its power to help traders around the world reach their financial goals. Not only can investors and market participants alike benefit from this zero-commission trading platform, but our team has also put out valuable educational material that will help you become part of the 10% traders who consistently make money.

Now, we want to drive your attention toward risk management and position sizing. Having a clear picture of the risk your account can tolerate will help you find the right position size for your next trade.

With this information, you will be able to maximize your profits and minimize your losses the moment you start applying these simple habits.

Plan Your Trade, Trade Your Plan

Risk management is one of the many areas of trading that is often disregarded by most of those at the beginning of their trading journey. However, understanding what is at stake before entering any trade is what separates successful traders from gamblers.

A profitable trader usually determines where he is going to place a stop-loss order before even thinking about the profits a trade could generate. This type of order cannot be set at random price levels. They need to make sense so that they are not triggered by the regular fluctuation in the market.

As a rule of thumb, most retail investors risk no more than 2% of their investment capital on any single trade, and hedge fund managers usually risk less than this amount, according to Investopedia.

Assume you have investment capital of $1,000 in your trading account. If you risk 2% on every trade in your account, that translates to a $20 potential loss per trade. This means that a losing trade will not wipe out your entire capital. For this to happen, you would have to lose 50 consecutive trades, or 100 trades in a row if you reduce the risk to 1%.

Now that you have a better understanding of how much capital you can lose per trade, determining the size of your positions is very easy. We will illustrate this idea by employing different technical indicators to help time a potential trade.

Executing a Well Sized Trade

The Tom Demark (TD) Sequential indicator is currently on a red nine candlestick on Ethereum’s 45-min chart. This index estimates that if the same price action continues, Ether could be preparing for a rebound.

Indeed, the bullish formation forecasts a one to four candlesticks upswing before the continuation of the downtrend. Breaking above the 7 moving average within this time frame will add credence to the optimistic outlook.

If this were to happen, ETH could find resistance around the 50 moving average. But a more significant barrier to pay attention to sits by the 100 moving average since this area has been able to reject the price of Ethereum before.

Ethereum US dollar price chart
TD Setup Estimates that Bullish Momentum Is Building Up. (Source: TradingView)

With the high probability of a long trade underway, you need to remember first that your maximum account risk is at 2% so you cannot risk more than $20 per trade, assuming that your investment capital is $1,000.

To figure out the correct position size you will take into consideration where to place your stop-loss order and your entry point. A few cents below the recent low is a reasonable price to set your stop-loss order, which could be around $197. If you were to enter the long position around the current price levels of $199, the trade risk is $2 per ETH.

By dividing your account risk, which is $20 per trade, by the trade risk, which is $2 per ETH, you will determine that the right position size for this long trade is up to 10 ETH. If everything plays out and this altcoin surges to the 50 moving average you could make $40 while a sudden downswing to $197 will kick you out of the trade with a $20 loss.

Now, it is time for you to calculate what is the maximum risk your trading account can tolerate so you can define the right position size for your next trade.

Understanding what you are doing before you trade is vital if you want to minimize your losses. That’s why, at Digitex Futures, we have our testnet open alongside the actual trading platform so that you can practice as much as you want before you start trading. Sign up for an account now and you can choose testnet or mainnet to either hone your skills first or get started trading right away.

Latest News

bitcoin

3 Technical Indicators to Help Time Bitcoin’s Price Action

Trading
• Ali Martinez
May 19, 2020

With the upcoming launch of the Digitex Futures Exchange, our team has been focused on creating educational material to allow traders and market participants alike to benefit the most from zero-commission trading.

In our beginners’ guide, for instance, we explain the basics of how to trade crypto derivative products and give you a breakdown of the platform.

Now, we want to help you understand how different technical indexes within Digitex Futures can help you time your next trade.

3 Technical Indicators to Supercharge Your Bitcoin Trading

One of the most widely used technical indicators among traders is the Bollinger bands. This analysis tool is defined by a set of two standard deviation lines and a simple moving average. Its popularity relies on the ability to identify that momentum is building up for a period of high volatility.

When the price action of a given asset goes through a stagnation phase, the Bollinger bands tend to squeeze. Squeezes are indicative of periods of low volatility and are typically succeeded by wild price movements. The longer the squeeze, the higher the probability of a strong breakout.

A look at BTC’s 5-min chart reveals that the Bollinger bands are squeezing. Since this technical index does not provide a clear path of where BTC could be headed next, the area between the lower and upper band is a reasonable no-trade zone.

A decisive move above or below this area will determine the direction of the trend.

Bitcoin USD price chart
Bollinger Bands Squeeze Signaling High Volatility. (Source: TradingView)

Nonetheless, when taking into consideration the parabolic stop and reverse, or “SAR,” we can estimate that the direction of Bitcoin is currently bullish despite the low levels of volatility.

Every time the stop and reversal points move below the price of an asset, it is considered to be a positive sign. On the flip side, when the SAR points move above the price of a given asset, it can be viewed as a bearish signal.

By taking in aggregate the Bollinger bands and the stop and reversal system, we can assume that there is a higher probability that Bitcoin will go up when volatility strikes back.

But how high can it go?

Bitcoin USD price chart
Stop and Reversal Points Turn Bullish. (Source: TradingView)

To answer this question, we can use the Fibonacci retracement indicator. This metric is based on a sequence of numbers expressed by ratios between the numbers in the series, according to Investopedia.

By plotting two extreme points, which are the most recent swing low at $9,475 and the peak of $9,820, the Fibonacci retracement indicator provides critical ratios that can be considered areas of support and resistance.

A bullish impulse that allows Bitcoin to move above the overhead resistance could see it rise towards the 127.2%, 141.4%, and, most importantly, the 161.8% Fibonacci retracement level. These resistance barriers sit approximately at $9,900, $9,960, and $10,030, respectively.

Bitcoin USD price chart
The Fibonacci Retracement Indicator Suggests the Next Major Resistance Sits at $10,030. (Source: TradingView)

At press time, we can see that the stop and reversal points accurately predicted that Bitcoin’s trend was bullish despite the consolidation phase. As the bellwether cryptocurrency broke above the resistance represented by the upper Bolliger band, it seems to be marching towards the 127.2%, 141.4%, or 161.8% Fibonacci retracement levels.

Bitcoin USD price chart
The 3 Indexes In Question Seem to Work Effectively. (Source: TradingView)

Individually, these different technical indicators may seem to provide an ambiguous outlook about future Bitcoin prices. Taken in aggregate, however, they can provide actionable information about when to enter and exit trades on the Digitex Futures Exchange.

With a good dose of patience and high levels of concentration on the charts, it is possible to minimize risk while profiting from Bitcoin’s price action.

May 19, 2020
Trading

3 Technical Indicators to Help Time Bitcoin’s Price Action

Ali Martinez
bitcoin

With the upcoming launch of the Digitex Futures Exchange, our team has been focused on creating educational material to allow traders and market participants alike to benefit the most from zero-commission trading.

In our beginners’ guide, for instance, we explain the basics of how to trade crypto derivative products and give you a breakdown of the platform.

Now, we want to help you understand how different technical indexes within Digitex Futures can help you time your next trade.

3 Technical Indicators to Supercharge Your Bitcoin Trading

One of the most widely used technical indicators among traders is the Bollinger bands. This analysis tool is defined by a set of two standard deviation lines and a simple moving average. Its popularity relies on the ability to identify that momentum is building up for a period of high volatility.

When the price action of a given asset goes through a stagnation phase, the Bollinger bands tend to squeeze. Squeezes are indicative of periods of low volatility and are typically succeeded by wild price movements. The longer the squeeze, the higher the probability of a strong breakout.

A look at BTC’s 5-min chart reveals that the Bollinger bands are squeezing. Since this technical index does not provide a clear path of where BTC could be headed next, the area between the lower and upper band is a reasonable no-trade zone.

A decisive move above or below this area will determine the direction of the trend.

Bitcoin USD price chart
Bollinger Bands Squeeze Signaling High Volatility. (Source: TradingView)

Nonetheless, when taking into consideration the parabolic stop and reverse, or “SAR,” we can estimate that the direction of Bitcoin is currently bullish despite the low levels of volatility.

Every time the stop and reversal points move below the price of an asset, it is considered to be a positive sign. On the flip side, when the SAR points move above the price of a given asset, it can be viewed as a bearish signal.

By taking in aggregate the Bollinger bands and the stop and reversal system, we can assume that there is a higher probability that Bitcoin will go up when volatility strikes back.

But how high can it go?

Bitcoin USD price chart
Stop and Reversal Points Turn Bullish. (Source: TradingView)

To answer this question, we can use the Fibonacci retracement indicator. This metric is based on a sequence of numbers expressed by ratios between the numbers in the series, according to Investopedia.

By plotting two extreme points, which are the most recent swing low at $9,475 and the peak of $9,820, the Fibonacci retracement indicator provides critical ratios that can be considered areas of support and resistance.

A bullish impulse that allows Bitcoin to move above the overhead resistance could see it rise towards the 127.2%, 141.4%, and, most importantly, the 161.8% Fibonacci retracement level. These resistance barriers sit approximately at $9,900, $9,960, and $10,030, respectively.

Bitcoin USD price chart
The Fibonacci Retracement Indicator Suggests the Next Major Resistance Sits at $10,030. (Source: TradingView)

At press time, we can see that the stop and reversal points accurately predicted that Bitcoin’s trend was bullish despite the consolidation phase. As the bellwether cryptocurrency broke above the resistance represented by the upper Bolliger band, it seems to be marching towards the 127.2%, 141.4%, or 161.8% Fibonacci retracement levels.

Bitcoin USD price chart
The 3 Indexes In Question Seem to Work Effectively. (Source: TradingView)

Individually, these different technical indicators may seem to provide an ambiguous outlook about future Bitcoin prices. Taken in aggregate, however, they can provide actionable information about when to enter and exit trades on the Digitex Futures Exchange.

With a good dose of patience and high levels of concentration on the charts, it is possible to minimize risk while profiting from Bitcoin’s price action.

Latest News