How Does Zero-Fee Crypto Trading Impact Your ROI? 1

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? 2

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

Ethereum

The Future Price of Ethereum — Technical Analysis

Digitex Futures
• Dave Reiter
April 12, 2021

Similar to other coins and tokens, Ethereum has generated a substantial rally throughout the past six months. Specifically, ETH has increased 498%, outperforming BTC by approximately 60% during the same time period (see chart 1 below). So, where do we go from here? How will ETH perform for the remainder of 2021 and beyond? Let’s explore the details.

The Future Price of Ethereum — Technical Analysis 3

The Difference Between Ethereum and Ether

In terms of market capitalization, ETH is the second-largest cryptocurrency in the crypto universe. Only Bitcoin has a larger market capitalization. ETH has enjoyed some explosive price moves throughout its brief 6-year history. But, before we analyze the future price direction of ETH, let’s briefly discuss the difference between Ethereum and Ether.

There seems to be some confusion regarding these two crypto terms. Ethereum is a blockchain-based platform used for writing autonomous smart contracts and decentralized applications. Ether is the cryptocurrency that serves as the fuel to power the smart contracts, apps, and other transactions on the Ethereum blockchain.

Although most people in the crypto community (including many crypto websites) use these words interchangeably, they are actually quite different in terms of how they are used in the crypto ecosystem.

Use Cases for Ethereum Blockchain Continue to Expand

In this article, we will be analyzing the price direction of Ether (ETH), the cryptocurrency. However, it’s also important to discuss Ethereum, the blockchain, because it lays the foundation for the current ETH bull market. It seems almost impossible to believe that Ether was trading below $100 per token less than 15 months ago (see chart 2).

The Future Price of Ethereum — Technical Analysis 4

Over the course of the past 15 months, ETH has exploded to the upside by increasing 2,226%. Since March 2020, ETH has been one of the top-performing cryptocurrencies within the entire crypto universe. Ether easily outperformed Bitcoin during this particular time period, 2,226% versus 1,388%.

The majority of Ether’s gains can be attributed to the fact that the total number of use cases for the Ethereum blockchain has increased substantially. Unlike the Bitcoin blockchain, Ethereum can be used for multiple applications across a wide variety of industries. Several of these applications have evolved into legitimate and profitable business enterprises with exponential growth potential. Let’s briefly examine a few of these Ethereum-based businesses.

DeFi (Decentralized Finance)

Without question, the most exciting new business linked to Ethereum is decentralized finance, more commonly known as DeFi. Although DeFi has been in existence for less than four years, it has gained an incredible amount of interest from venture capital firms and angel investors who see the enormous potential in this new space.

Without going into great detail, DeFi competes head-to-head with the legacy financial services industry, with an estimated value of $26.5 trillion by 2022, according to data gathered by The World Bank. Based on these numbers, the upside potential in DeFi is massive. This is great news if you are an owner of ETH because the overwhelming majority of the DeFi ecosystem operates on the Ethereum blockchain.

NFTs (Non-Fungible Tokens)

Another business venture associated with Ethereum is non-fungible tokens (NFT), which have witnessed a tremendous wave of enthusiasm from investors and speculators during the past few months. Very briefly, non-fungible tokens allow non-fungible assets to possess unique properties that completely change the user and development relationship of these assets.

Examples of non-fungible digital assets include digital collectibles, such as in-game items and characters, virtual pets, and representations of fine art. By attaching unique properties such as immutability and scarcity to non-fungible assets, it substantially increases the value of said assets.

Almost the entire NFT industry operates on the Ethereum blockchain, which is obviously bullish for ETH. Arguably, the most exciting part of NFTs is the fact that young people are heavily involved in this exciting new space. Consequently, this will provide Generation Z with an opportunity to familiarize themselves with cryptocurrencies and other digital assets. This is very bullish from a long-term perspective.

In addition to DeFi and NFT, the Ethereum blockchain is also actively engaged in enterprise software, which is used by organizations, businesses, charities, schools, and governments to handle day-to-day operations across a wide variety of internal departments within each organization.

These daily operations would include such tasks as human resources, supply chain management, database management, CRM, security, and billing systems. Enterprise software companies are using a privatized version of the Ethereum network to provide their services to companies like Microsoft, IBM, JPMorgan Chase, and Deloitte.

These are just a few examples of how the Ethereum blockchain is linked to industries and businesses across the global economy. Of course, this is extremely bullish for ETH because these companies and businesses must purchase ETH in order to pay for their services on the Ethereum blockchain. Many crypto experts believe that the number of use cases for Ethereum will continue to expand as blockchain technology becomes more common throughout the global economy.

Using TA to Forecast the Price of ETH

Technical analysis has been extremely useful in forecasting the future price direction of ETH. Let’s review a few of these indicators.

Arguably, the most reliable technical indicator in modern history was created by a twelfth-century Italian mathematician by the name of Leonardo Fibonacci. The vast majority of mathematical historians consider Fibonacci to be the greatest mathematician of the Middle Ages. In fact, many experts in the field of mathematics claim that Fibonacci was one of the ten greatest mathematicians of all time.

Fibonacci made several important contributions to the field of mathematics throughout his life. However, he will always be most famously known for Fibonacci numbers, which are a sequence of numbers developed by Fibonacci circa 1202.

Fibonacci numbers are used in the study of nature, music, agriculture, computer applications, price forecasting, and several other fields of study. Stock and commodity traders use “Fib” numbers to calculate support and resistance levels.

The most common Fib levels are:

  • .236
  • .382
  • .500
  • .618
  • .786
  • 000

It’s not uncommon for financial assets like cryptocurrencies to fluctuate between Fibonacci support and resistance levels for long periods of time. When a major breakout finally occurs, it usually marks the beginning of a substantial move.

The crypto trading community would love to know the final top in ETH before a new bear market ensues, probably near the end of 2021 or early-2022. Of course, it’s impossible to accurately forecast the final top of any speculative asset. Cryptocurrencies are particularly difficult because we have such a small sample size of historical data. However, we can use Fibonacci numbers to develop an educated forecast concerning the final top for Ether. Please review the calculation on Chart 3 below:

The Future Price of Ethereum — Technical Analysis 5

There are several different ways to use Fib levels as a forecasting device. The most popular format involves calculating the price difference between two important price levels. For this particular calculation, we selected the historic high from January 2018 and the subsequent low achieved in December of the same year.

The majority of Fibonacci experts agree that .618 is the most significant Fib level. Therefore, we will use this number in our calculation. Based on the Fibonacci calculation, the final top for this cycle will be 4,921.73. If ETH follows the same path as the 2017 bull market, the top will occur in late-2021.

Another useful technical indicator is the Relative Strength Index (RSI), which was created by J Welles Wilder Jr, one of the greatest technical analysts in the history of financial markets. RSI is a momentum indicator that measures the overbought or oversold condition of a speculative asset. RSI is typically displayed in an oscillator format, which fluctuates between 0 and 100.

Generally speaking, a market is considered overbought if the RSI reading exceeds 70. Conversely, the market is considered oversold if the RSI reading falls below 30. Many traders will use a reading above 70 as a trigger to generate a sell signal and a reading below 30 will generate a buy signal. However, this is not a good strategy to follow in a momentum-fueled environment like cryptocurrencies. Please review Chart number 4:

The Future Price of Ethereum — Technical Analysis 6

The RSI reading has been above 70 since November 9, 2020, when ETH was trading @ 446.10. Obviously, this was not a good time to sell ETH. In fact, this would have been a great time to buy Ether. Therefore, an argument could be made that the optimum way to use RSI for trending markets like cryptocurrencies is to wait for a bullish breakout above 70 as a buy signal. A bearish breakout below 30 would constitute a sell signal. Trying to pick tops and bottoms in a trending market is a recipe for disaster. As Chart #4 clearly demonstrates, the best course of action is to follow the momentum.

In addition to RSI, another momentum-based indicator is the Money Flow Index (MFI). This indicator measures the inflow and outflow of money into a speculative asset over a specific period of time. It uses price and volume to calculate trading pressure. Arguably, MFI is the purest way to determine the amount of money entering and leaving a particular asset class.

Similar to RSI, the index fluctuates between 0 and 100. In terms of trending markets like cryptocurrencies, the best way to apply MFI is to wait for a bullish breakout above 70 or a bearish breakout below 30. MFI is located at the bottom of Chart #5.

The Future Price of Ethereum — Technical Analysis 7

An Ether buy signal was generated @ 509.11 on November 23, 2020, when MFI penetrated the 70 level. MFI has been continuously above 70 for the past five months. This is a perfect example of why it’s best to follow the trend of the market and avoid the temptation to pick a top or bottom.

At least for now, the trend of ETH is clearly in favor of the bulls. The vast majority of technical indicators are forecasting a continuation of the bull market. In addition to technical analysis, the fundamental backdrop for Ether is extremely bullish, as more use cases are being added to the Ethereum blockchain. Eventually, this bullish cycle will end and a new bear cycle will begin. However, this current bullish phase could easily continue for the remainder of 2021.

Don’t forget that whether the price of ETH goes up or down, you can make money trading ETH futures on our zero-fee rapid-fire ladder trading platform. Sign up here to find out how easy it is to profit from even the smallest of price fluctuations when you’re not constantly losing out to commissions. 

Digitex Futures writers and/or guest authors may or may not have a vested interest in the Digitex Futures project and/or other businesses mentioned throughout the site. None of the content on Digitex Futures is investment advice nor is it a replacement for advice from a certified financial planner.

April 12, 2021
Digitex Futures

The Future Price of Ethereum — Technical Analysis

Dave Reiter
Ethereum

Similar to other coins and tokens, Ethereum has generated a substantial rally throughout the past six months. Specifically, ETH has increased 498%, outperforming BTC by approximately 60% during the same time period (see chart 1 below). So, where do we go from here? How will ETH perform for the remainder of 2021 and beyond? Let’s explore the details.

The Future Price of Ethereum — Technical Analysis 8

The Difference Between Ethereum and Ether

In terms of market capitalization, ETH is the second-largest cryptocurrency in the crypto universe. Only Bitcoin has a larger market capitalization. ETH has enjoyed some explosive price moves throughout its brief 6-year history. But, before we analyze the future price direction of ETH, let’s briefly discuss the difference between Ethereum and Ether.

There seems to be some confusion regarding these two crypto terms. Ethereum is a blockchain-based platform used for writing autonomous smart contracts and decentralized applications. Ether is the cryptocurrency that serves as the fuel to power the smart contracts, apps, and other transactions on the Ethereum blockchain.

Although most people in the crypto community (including many crypto websites) use these words interchangeably, they are actually quite different in terms of how they are used in the crypto ecosystem.

Use Cases for Ethereum Blockchain Continue to Expand

In this article, we will be analyzing the price direction of Ether (ETH), the cryptocurrency. However, it’s also important to discuss Ethereum, the blockchain, because it lays the foundation for the current ETH bull market. It seems almost impossible to believe that Ether was trading below $100 per token less than 15 months ago (see chart 2).

The Future Price of Ethereum — Technical Analysis 9

Over the course of the past 15 months, ETH has exploded to the upside by increasing 2,226%. Since March 2020, ETH has been one of the top-performing cryptocurrencies within the entire crypto universe. Ether easily outperformed Bitcoin during this particular time period, 2,226% versus 1,388%.

The majority of Ether’s gains can be attributed to the fact that the total number of use cases for the Ethereum blockchain has increased substantially. Unlike the Bitcoin blockchain, Ethereum can be used for multiple applications across a wide variety of industries. Several of these applications have evolved into legitimate and profitable business enterprises with exponential growth potential. Let’s briefly examine a few of these Ethereum-based businesses.

DeFi (Decentralized Finance)

Without question, the most exciting new business linked to Ethereum is decentralized finance, more commonly known as DeFi. Although DeFi has been in existence for less than four years, it has gained an incredible amount of interest from venture capital firms and angel investors who see the enormous potential in this new space.

Without going into great detail, DeFi competes head-to-head with the legacy financial services industry, with an estimated value of $26.5 trillion by 2022, according to data gathered by The World Bank. Based on these numbers, the upside potential in DeFi is massive. This is great news if you are an owner of ETH because the overwhelming majority of the DeFi ecosystem operates on the Ethereum blockchain.

NFTs (Non-Fungible Tokens)

Another business venture associated with Ethereum is non-fungible tokens (NFT), which have witnessed a tremendous wave of enthusiasm from investors and speculators during the past few months. Very briefly, non-fungible tokens allow non-fungible assets to possess unique properties that completely change the user and development relationship of these assets.

Examples of non-fungible digital assets include digital collectibles, such as in-game items and characters, virtual pets, and representations of fine art. By attaching unique properties such as immutability and scarcity to non-fungible assets, it substantially increases the value of said assets.

Almost the entire NFT industry operates on the Ethereum blockchain, which is obviously bullish for ETH. Arguably, the most exciting part of NFTs is the fact that young people are heavily involved in this exciting new space. Consequently, this will provide Generation Z with an opportunity to familiarize themselves with cryptocurrencies and other digital assets. This is very bullish from a long-term perspective.

In addition to DeFi and NFT, the Ethereum blockchain is also actively engaged in enterprise software, which is used by organizations, businesses, charities, schools, and governments to handle day-to-day operations across a wide variety of internal departments within each organization.

These daily operations would include such tasks as human resources, supply chain management, database management, CRM, security, and billing systems. Enterprise software companies are using a privatized version of the Ethereum network to provide their services to companies like Microsoft, IBM, JPMorgan Chase, and Deloitte.

These are just a few examples of how the Ethereum blockchain is linked to industries and businesses across the global economy. Of course, this is extremely bullish for ETH because these companies and businesses must purchase ETH in order to pay for their services on the Ethereum blockchain. Many crypto experts believe that the number of use cases for Ethereum will continue to expand as blockchain technology becomes more common throughout the global economy.

Using TA to Forecast the Price of ETH

Technical analysis has been extremely useful in forecasting the future price direction of ETH. Let’s review a few of these indicators.

Arguably, the most reliable technical indicator in modern history was created by a twelfth-century Italian mathematician by the name of Leonardo Fibonacci. The vast majority of mathematical historians consider Fibonacci to be the greatest mathematician of the Middle Ages. In fact, many experts in the field of mathematics claim that Fibonacci was one of the ten greatest mathematicians of all time.

Fibonacci made several important contributions to the field of mathematics throughout his life. However, he will always be most famously known for Fibonacci numbers, which are a sequence of numbers developed by Fibonacci circa 1202.

Fibonacci numbers are used in the study of nature, music, agriculture, computer applications, price forecasting, and several other fields of study. Stock and commodity traders use “Fib” numbers to calculate support and resistance levels.

The most common Fib levels are:

  • .236
  • .382
  • .500
  • .618
  • .786
  • 000

It’s not uncommon for financial assets like cryptocurrencies to fluctuate between Fibonacci support and resistance levels for long periods of time. When a major breakout finally occurs, it usually marks the beginning of a substantial move.

The crypto trading community would love to know the final top in ETH before a new bear market ensues, probably near the end of 2021 or early-2022. Of course, it’s impossible to accurately forecast the final top of any speculative asset. Cryptocurrencies are particularly difficult because we have such a small sample size of historical data. However, we can use Fibonacci numbers to develop an educated forecast concerning the final top for Ether. Please review the calculation on Chart 3 below:

The Future Price of Ethereum — Technical Analysis 10

There are several different ways to use Fib levels as a forecasting device. The most popular format involves calculating the price difference between two important price levels. For this particular calculation, we selected the historic high from January 2018 and the subsequent low achieved in December of the same year.

The majority of Fibonacci experts agree that .618 is the most significant Fib level. Therefore, we will use this number in our calculation. Based on the Fibonacci calculation, the final top for this cycle will be 4,921.73. If ETH follows the same path as the 2017 bull market, the top will occur in late-2021.

Another useful technical indicator is the Relative Strength Index (RSI), which was created by J Welles Wilder Jr, one of the greatest technical analysts in the history of financial markets. RSI is a momentum indicator that measures the overbought or oversold condition of a speculative asset. RSI is typically displayed in an oscillator format, which fluctuates between 0 and 100.

Generally speaking, a market is considered overbought if the RSI reading exceeds 70. Conversely, the market is considered oversold if the RSI reading falls below 30. Many traders will use a reading above 70 as a trigger to generate a sell signal and a reading below 30 will generate a buy signal. However, this is not a good strategy to follow in a momentum-fueled environment like cryptocurrencies. Please review Chart number 4:

The Future Price of Ethereum — Technical Analysis 11

The RSI reading has been above 70 since November 9, 2020, when ETH was trading @ 446.10. Obviously, this was not a good time to sell ETH. In fact, this would have been a great time to buy Ether. Therefore, an argument could be made that the optimum way to use RSI for trending markets like cryptocurrencies is to wait for a bullish breakout above 70 as a buy signal. A bearish breakout below 30 would constitute a sell signal. Trying to pick tops and bottoms in a trending market is a recipe for disaster. As Chart #4 clearly demonstrates, the best course of action is to follow the momentum.

In addition to RSI, another momentum-based indicator is the Money Flow Index (MFI). This indicator measures the inflow and outflow of money into a speculative asset over a specific period of time. It uses price and volume to calculate trading pressure. Arguably, MFI is the purest way to determine the amount of money entering and leaving a particular asset class.

Similar to RSI, the index fluctuates between 0 and 100. In terms of trending markets like cryptocurrencies, the best way to apply MFI is to wait for a bullish breakout above 70 or a bearish breakout below 30. MFI is located at the bottom of Chart #5.

The Future Price of Ethereum — Technical Analysis 12

An Ether buy signal was generated @ 509.11 on November 23, 2020, when MFI penetrated the 70 level. MFI has been continuously above 70 for the past five months. This is a perfect example of why it’s best to follow the trend of the market and avoid the temptation to pick a top or bottom.

At least for now, the trend of ETH is clearly in favor of the bulls. The vast majority of technical indicators are forecasting a continuation of the bull market. In addition to technical analysis, the fundamental backdrop for Ether is extremely bullish, as more use cases are being added to the Ethereum blockchain. Eventually, this bullish cycle will end and a new bear cycle will begin. However, this current bullish phase could easily continue for the remainder of 2021.

Don’t forget that whether the price of ETH goes up or down, you can make money trading ETH futures on our zero-fee rapid-fire ladder trading platform. Sign up here to find out how easy it is to profit from even the smallest of price fluctuations when you’re not constantly losing out to commissions. 

Digitex Futures writers and/or guest authors may or may not have a vested interest in the Digitex Futures project and/or other businesses mentioned throughout the site. None of the content on Digitex Futures is investment advice nor is it a replacement for advice from a certified financial planner.

Latest News

4 Ways that Bitcoin Trading Volumes Impact Crypto Trading Strategies 13

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 14

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 15

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 16

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

dfe

Latest Success Stories from Winning Traders on the DFE

Digitex Futures
• Digitex
July 13, 2020

The entire business model of the Digitex Futures exchange has always been focused on creating more winning traders. By introducing a zero-fee platform powered by the DGTX token, we’re making trading strategies such as scalp trading and swing trading profitable. It was a big vision, but we now know it’s working. Here, some of our mainnet traders share their success stories and insights.

From Investor to Trader

Eoghan has been a supporter of Digitex since the ICO, although he wasn’t a trader back then. In the time since, he spent nearly a year and a half learning everything he could about trading, but he still couldn’t turn a profit using his chosen short-term trading strategy. He explains:

“Using an infamous exchange, I managed to blow up three trading accounts before adjusting my risk level. This brought my win rate up significantly – but to my dismay, I watched as slowly over time my account balance was eaten away by commissions, which hit me particularly hard as an ultra short term trader.”

So for Eoghan, using the DFE, is an absolute no-brainer. But circumstances provided him with an additional incentive. In mid-April, he was put on furlough from his job due to the pandemic.

“I took this as a sign and decided to dive headfirst into trading full time on the DFE – I was determined to never again have to rely on the whims of others to put food on the table. Starting back with a real money account on the DFE, I began with much smaller position sizes, and immediately found myself profitable. Since the beginning of mainnet, I have managed an increase of over 107% on my total trading stack.”

Eoghan is now laser-focused on developing his skills to the point that he can gain financial freedom through trading.

19,000% Returns

Another trade, who chose to remain anonymous, shared this astounding success with us:

 

Latest Success Stories from Winning Traders on the DFE 17

 

From 12,000 DGTX to 2.3 million represents a staggering return of 19,000%. How did he achieve these kinds of results? He has a few tips for anyone wanting to replicate his success.

“The main benefit to using the DFE is the ability to scratch if a trade looks like it’s going against you. Patience is the key, waiting for the right moments to enter a trade, or waiting for a trade to be filled. But always be ready to switch positions if needed. Don’t get too attached to any trade, hoping that it will work out. Admit when you’re wrong as soon as possible, take the loss and move on.”

He also explains how zero-fees can help drive better decision-making when trading:

“Commissions limit what strategies a trader can follow. They can lead to poor decision making. On DFE a scratched trade is a scratched trade. There’s no extra penalty. This can really help psychologically, especially if executing a lot of trades throughout the day.”

From Betfair to Bitcoin

In canvassing traders to share their success stories, we heard from a few people who came to the DFE, not through the crypto scene, but because they had previously used Adam’s trading ladder on Betfair. For the benefit of the uninitiated, Adam used to be a sports betting trader, and he originally developed the ladder trading interface used by Digitex as an app for Betfair users.

Some of the guys using the Betfair ladder were apparently such a fan of it, they’ve now joined the DFE to reap the benefits of zero-commission futures trading.

Paul has been seeing consistent profits of around 3,000 DGTX per day, which he believes could increase even further with the deeper liquidity of more traders. He’s achieved this using the same technique he used with the Betfair ladder – by looking for gaps in the ladder driven by volatility in the spot price.

While he also looks for support and resistance in the one-minute and five-minute charts, he shares Adam’s view that scalping is as much about reading the markets as reading the charts. He told us:

“Scalping doesn’t have to be strategy-oriented trading. You just need to be quick enough and take the loss as quickly as you can in order to be successful long-term.”

Paul also thinks it’s high time that crypto traders start demanding a better user experience.

“I was never excited to trade on crypto exchanges because the UI was so inconvenient. That’s why when I heard of Adam’s plans, I was really pleased that someone who knows the industry is willing to apply a simple tool to enable users to trade the markets conveniently. You know for us Betfair traders, the ladder is well known! And it’s funny that most people in crypto had no idea this tool exists.”

He isn’t alone. Mika is another trader who reached out to us to share his story, who also came to the DFE via Betfair. He actually runs his own Telegram channel now, where he posts his daily trading results from the DFE.

Very much a no-nonsense kind of trader, Mika also shares many of the same views as Adam when it comes to scalping.

“My strategy is simple. I trade small moves and cut losses immediately. No indicators, no charts. With the ladder, it doesn’t matter whether the price is for horse racing or Bitcoin – the principles of trading are the same.”

It’s a strategy that’s stood him in good stead, earning steady returns of around 15% each week.

Watch and Learn

Want to see our mainnet traders in action? Digitex contributor Cryptrader regularly shares live streams of his trading sessions over on his YouTube channels. Here is one from a few weeks ago, where he shorted a breakdown of support with more than 20,000 contracts, managing a smooth entry with ease thanks to the ladder.

As he told us:

“Typically, I wouldn’t be that aggressive. But the fact there is no fees means I can get out at any moment if it appears not to go my way.

Finally, trading doesn’t have to be effortful. Check out this trading success story tweeted by Daniel:

Latest Success Stories from Winning Traders on the DFE 18

If you want to trader Bitcoin futures with zero fees, sign up here and get started today. A big thanks to all the DFE mainnet users who took the time to share their stories! 

July 13, 2020
Digitex Futures

Latest Success Stories from Winning Traders on the DFE

Digitex
dfe

The entire business model of the Digitex Futures exchange has always been focused on creating more winning traders. By introducing a zero-fee platform powered by the DGTX token, we’re making trading strategies such as scalp trading and swing trading profitable. It was a big vision, but we now know it’s working. Here, some of our mainnet traders share their success stories and insights.

From Investor to Trader

Eoghan has been a supporter of Digitex since the ICO, although he wasn’t a trader back then. In the time since, he spent nearly a year and a half learning everything he could about trading, but he still couldn’t turn a profit using his chosen short-term trading strategy. He explains:

“Using an infamous exchange, I managed to blow up three trading accounts before adjusting my risk level. This brought my win rate up significantly – but to my dismay, I watched as slowly over time my account balance was eaten away by commissions, which hit me particularly hard as an ultra short term trader.”

So for Eoghan, using the DFE, is an absolute no-brainer. But circumstances provided him with an additional incentive. In mid-April, he was put on furlough from his job due to the pandemic.

“I took this as a sign and decided to dive headfirst into trading full time on the DFE – I was determined to never again have to rely on the whims of others to put food on the table. Starting back with a real money account on the DFE, I began with much smaller position sizes, and immediately found myself profitable. Since the beginning of mainnet, I have managed an increase of over 107% on my total trading stack.”

Eoghan is now laser-focused on developing his skills to the point that he can gain financial freedom through trading.

19,000% Returns

Another trade, who chose to remain anonymous, shared this astounding success with us:

 

Latest Success Stories from Winning Traders on the DFE 19

 

From 12,000 DGTX to 2.3 million represents a staggering return of 19,000%. How did he achieve these kinds of results? He has a few tips for anyone wanting to replicate his success.

“The main benefit to using the DFE is the ability to scratch if a trade looks like it’s going against you. Patience is the key, waiting for the right moments to enter a trade, or waiting for a trade to be filled. But always be ready to switch positions if needed. Don’t get too attached to any trade, hoping that it will work out. Admit when you’re wrong as soon as possible, take the loss and move on.”

He also explains how zero-fees can help drive better decision-making when trading:

“Commissions limit what strategies a trader can follow. They can lead to poor decision making. On DFE a scratched trade is a scratched trade. There’s no extra penalty. This can really help psychologically, especially if executing a lot of trades throughout the day.”

From Betfair to Bitcoin

In canvassing traders to share their success stories, we heard from a few people who came to the DFE, not through the crypto scene, but because they had previously used Adam’s trading ladder on Betfair. For the benefit of the uninitiated, Adam used to be a sports betting trader, and he originally developed the ladder trading interface used by Digitex as an app for Betfair users.

Some of the guys using the Betfair ladder were apparently such a fan of it, they’ve now joined the DFE to reap the benefits of zero-commission futures trading.

Paul has been seeing consistent profits of around 3,000 DGTX per day, which he believes could increase even further with the deeper liquidity of more traders. He’s achieved this using the same technique he used with the Betfair ladder – by looking for gaps in the ladder driven by volatility in the spot price.

While he also looks for support and resistance in the one-minute and five-minute charts, he shares Adam’s view that scalping is as much about reading the markets as reading the charts. He told us:

“Scalping doesn’t have to be strategy-oriented trading. You just need to be quick enough and take the loss as quickly as you can in order to be successful long-term.”

Paul also thinks it’s high time that crypto traders start demanding a better user experience.

“I was never excited to trade on crypto exchanges because the UI was so inconvenient. That’s why when I heard of Adam’s plans, I was really pleased that someone who knows the industry is willing to apply a simple tool to enable users to trade the markets conveniently. You know for us Betfair traders, the ladder is well known! And it’s funny that most people in crypto had no idea this tool exists.”

He isn’t alone. Mika is another trader who reached out to us to share his story, who also came to the DFE via Betfair. He actually runs his own Telegram channel now, where he posts his daily trading results from the DFE.

Very much a no-nonsense kind of trader, Mika also shares many of the same views as Adam when it comes to scalping.

“My strategy is simple. I trade small moves and cut losses immediately. No indicators, no charts. With the ladder, it doesn’t matter whether the price is for horse racing or Bitcoin – the principles of trading are the same.”

It’s a strategy that’s stood him in good stead, earning steady returns of around 15% each week.

Watch and Learn

Want to see our mainnet traders in action? Digitex contributor Cryptrader regularly shares live streams of his trading sessions over on his YouTube channels. Here is one from a few weeks ago, where he shorted a breakdown of support with more than 20,000 contracts, managing a smooth entry with ease thanks to the ladder.

As he told us:

“Typically, I wouldn’t be that aggressive. But the fact there is no fees means I can get out at any moment if it appears not to go my way.

Finally, trading doesn’t have to be effortful. Check out this trading success story tweeted by Daniel:

Latest Success Stories from Winning Traders on the DFE 20

If you want to trader Bitcoin futures with zero fees, sign up here and get started today. A big thanks to all the DFE mainnet users who took the time to share their stories! 

Latest News

trading strategy

One Trading Strategy for Gains of 400,000 DGTX in Two Months

Trading
• Digitex
June 17, 2020

Resident Digitex trader Cryptrader provides an invaluable video helping traders navigate the Digitex Futures platform and providing useful tips and insights to his own trading strategies. Today, he walks through the one strategy that he’s used to generate gains of 400,000 DGTX tokens in just two months of mainnet trading!

Cryptrader opens the video by walking viewers through the interface and some of the key features they’ll need to use, he then gets straight into his trading strategy.

Using Fibonacci Levels to Calculate Entry and Exit

Now, to the exciting part! Cryptrader shares the strategy he has been using to generate 400,000 DGTX in the two months that he’s been trading on the DFE mainnet. To save you doing the math, 400k DGTX works out to $16,000 in profit at an average price of $0.04 for one DGTX. That’s some impressive effort!

Cryptrader points out that when the market moves in either direction, it goes in waves, with a surge and then a smaller correction. His strategy is to look for the point when the wave is about to exhaust itself and trade the pullback with a short.

He demonstrates how to use the Fibonacci Retracement tool to find the level to short at. His preferred zone is to enter at the 0.5 to 0.618 level, with a target of exiting around the 0.236 level.

Using the risk/reward tool will help you determine where you should exit the position, both from a stop-loss and take-profit perspective. Currently, both of these features are in test mode on the DFE. So, until they’re live, mainnet users should continue monitoring their trades to exit manually once the price hits their risk or reward limits.

Cryptrader uses the risk/reward tool to illustrate that he only has to be right 30% of the time for this to become a profitable trading strategy.

He moves on to another example, using the same strategy on a different price movement. In this instance, he demonstrates how it made sense to target a higher low, based on the overall pattern of the market.

The strategy listed here is just one of many that a trader could use. However, Cryptrader’s success on the mainnet demonstrates how finding a single formula for success, and sticking to it, can result in some serious profits.

The video here is retrospective, so Cryptrader is explaining how he executed some of his latest trades. If you want to watch him performing this strategy live, then you can head over to his YouTube channel and watch one of his live trading sessions on the DFE mainnet.

Want to start making gains like Cryptrader on the Digitex Futures platform? Sign up here to start trading Bitcoin futures with zero fees now.

June 17, 2020
Trading

One Trading Strategy for Gains of 400,000 DGTX in Two Months

Digitex
trading strategy

Resident Digitex trader Cryptrader provides an invaluable video helping traders navigate the Digitex Futures platform and providing useful tips and insights to his own trading strategies. Today, he walks through the one strategy that he’s used to generate gains of 400,000 DGTX tokens in just two months of mainnet trading!

Cryptrader opens the video by walking viewers through the interface and some of the key features they’ll need to use, he then gets straight into his trading strategy.

Using Fibonacci Levels to Calculate Entry and Exit

Now, to the exciting part! Cryptrader shares the strategy he has been using to generate 400,000 DGTX in the two months that he’s been trading on the DFE mainnet. To save you doing the math, 400k DGTX works out to $16,000 in profit at an average price of $0.04 for one DGTX. That’s some impressive effort!

Cryptrader points out that when the market moves in either direction, it goes in waves, with a surge and then a smaller correction. His strategy is to look for the point when the wave is about to exhaust itself and trade the pullback with a short.

He demonstrates how to use the Fibonacci Retracement tool to find the level to short at. His preferred zone is to enter at the 0.5 to 0.618 level, with a target of exiting around the 0.236 level.

Using the risk/reward tool will help you determine where you should exit the position, both from a stop-loss and take-profit perspective. Currently, both of these features are in test mode on the DFE. So, until they’re live, mainnet users should continue monitoring their trades to exit manually once the price hits their risk or reward limits.

Cryptrader uses the risk/reward tool to illustrate that he only has to be right 30% of the time for this to become a profitable trading strategy.

He moves on to another example, using the same strategy on a different price movement. In this instance, he demonstrates how it made sense to target a higher low, based on the overall pattern of the market.

The strategy listed here is just one of many that a trader could use. However, Cryptrader’s success on the mainnet demonstrates how finding a single formula for success, and sticking to it, can result in some serious profits.

The video here is retrospective, so Cryptrader is explaining how he executed some of his latest trades. If you want to watch him performing this strategy live, then you can head over to his YouTube channel and watch one of his live trading sessions on the DFE mainnet.

Want to start making gains like Cryptrader on the Digitex Futures platform? Sign up here to start trading Bitcoin futures with zero fees now.

Latest News

Trading Strategies

Crypto Trading Strategies: The Ins and Outs of Scalping

Digitex Futures
Trading
• Christina Comben
April 2, 2020

We’ve looked at various different crypto trading strategies in recent articles. Any trader in this volatile space has a plethora of paths to choose when deciding how best to execute. Since all crypto trading strategies are different, we thought we’d take a closer look at Digitex Futures CEO’s favorite ones, including day trading and scalping.

Different Styles of Futures Trading

Traders with a high tolerance to risk will look to pursue strategies that may make other retail traders uncomfortable. These can include buying futures on margin or keeping positions (long or short) open for extended periods of time, sometimes even years.

These types of actions can certainly magnify a trader’s profits. But they can also be extremely risky. A wrong call can see them liquidated with hefty losses.

Advanced futures trading styles often rely on hefty fundamental analysis, whereas shorter-term styles such as day trading and scalping look at technical analysis and charts. Of all the crypto trading strategies out there, Digitex Futures CEO Adam Todd prefers scalping as it gives him less exposure to risk but still a good chance of making a profit when conditions are right.

What Is Scalping?

Scalping is the most labor-intensive and aggressive style of day trading. Scalpers look to take advantage of even the smallest of price fluctuations, sometimes holding a position open for a very short time of just a few minutes or even seconds. The main aim of scalpers is to buy low and sell slightly higher for profits sometimes only the equivalent of a few cents.

The name of the game is focusing on reducing losses rather than, as Adam calls it, “riding the winners.” Scalpers will open and close multiple positions in one day with the aim of racking up lots of profits from many places; rather than act on one large swing trend or pattern. Adam explains that in order to be a successful scalper, your trades should be as short as possible: “I discovered that the longer I held a position, the bigger the risk that my position would turn into a loser,” he said.

It’s vital to be disciplined as a scalper and to leave your emotions out of trading. In fact, according to Adam, it’s better if you don’t know anything about the underlying asset at all.

“Short-term scalping requires no fundamental knowledge of the underlying instrument on which you’re trading. As soon as you have entered a position you’re looking to exit it, hopefully with a one or two tick profit but willing to scratch it or lose a tick without any emotional attachment to the trade.”

Scalping Trading – The Ins and Outs

Scalping requires full concentration from the trader. We’re talking about continuous monitoring of the screens and profiting from even the smallest of price changes. If you’re reading your emails or checking social media, you’ll likely fail to see success. According to Investopedia, scalping is “A fast-paced activity for nimble traders. It requires precision timing and execution.”

Scalpers focus on time frame interval charts like the one-minute and five-minute candlestick charts and look out for certain momentum indicators. These could be the relative strength index (RSI), the moving average convergence divergence (MACD), or stochastic. Price chart indicators are also commonly used to identify support and resistance levels.

One of the biggest mistakes a scalper can make according to Investopedia (and echoed by Adam’s words) is late exits (holding a position open for too long). This exposes them to more risk and can turn a profitable day into a losing one if they get caught out in the wrong position. Since scalping generates high commission fees from extensive trading, successfully scalping is currently almost impossible in today’s cryptocurrency markets.

Want to try your hand at trading commission-free on the Digitex Futures exchange? With the beta version handling insane volume, you can practice your skills on our trading ladder interface and hone your strategy before the mainnet release on April 27, 2020.

JOIN NOW
Scalping on Digitex Futures

At Digitex Futures, we want to see all types of crypto trading strategies used so that we appeal to a wide net of traders. However, one of the main things we are looking forward to when we come to market is to at last stop punishing our most active traders, the ones who provide liquidity to the market with commission fees.

As Adam said, “As a scalper, I shouldn’t be paying a percentage of the notional value of the underlying instrument. I’m providing liquidity and should be encouraged, not squeezed out of the market entirely.”

Since we will charge no maker or taker fees on any trade, scalpers will be able to enter and exit as many positions as they like. They’ll be able to make a real living out of aggressive day trading without worrying about how much they have to give back to the house.

Do you want to stock up on DGTX tokens ahead of the mainnet launch? You can head over to the Digitex Treasury for a trustless transaction with zero slippage and completely KYC-free now.

BUY DGTX

 

April 2, 2020
Digitex Futures
Trading

Crypto Trading Strategies: The Ins and Outs of Scalping

Christina Comben
Trading Strategies

We’ve looked at various different crypto trading strategies in recent articles. Any trader in this volatile space has a plethora of paths to choose when deciding how best to execute. Since all crypto trading strategies are different, we thought we’d take a closer look at Digitex Futures CEO’s favorite ones, including day trading and scalping.

Different Styles of Futures Trading

Traders with a high tolerance to risk will look to pursue strategies that may make other retail traders uncomfortable. These can include buying futures on margin or keeping positions (long or short) open for extended periods of time, sometimes even years.

These types of actions can certainly magnify a trader’s profits. But they can also be extremely risky. A wrong call can see them liquidated with hefty losses.

Advanced futures trading styles often rely on hefty fundamental analysis, whereas shorter-term styles such as day trading and scalping look at technical analysis and charts. Of all the crypto trading strategies out there, Digitex Futures CEO Adam Todd prefers scalping as it gives him less exposure to risk but still a good chance of making a profit when conditions are right.

What Is Scalping?

Scalping is the most labor-intensive and aggressive style of day trading. Scalpers look to take advantage of even the smallest of price fluctuations, sometimes holding a position open for a very short time of just a few minutes or even seconds. The main aim of scalpers is to buy low and sell slightly higher for profits sometimes only the equivalent of a few cents.

The name of the game is focusing on reducing losses rather than, as Adam calls it, “riding the winners.” Scalpers will open and close multiple positions in one day with the aim of racking up lots of profits from many places; rather than act on one large swing trend or pattern. Adam explains that in order to be a successful scalper, your trades should be as short as possible: “I discovered that the longer I held a position, the bigger the risk that my position would turn into a loser,” he said.

It’s vital to be disciplined as a scalper and to leave your emotions out of trading. In fact, according to Adam, it’s better if you don’t know anything about the underlying asset at all.

“Short-term scalping requires no fundamental knowledge of the underlying instrument on which you’re trading. As soon as you have entered a position you’re looking to exit it, hopefully with a one or two tick profit but willing to scratch it or lose a tick without any emotional attachment to the trade.”

Scalping Trading – The Ins and Outs

Scalping requires full concentration from the trader. We’re talking about continuous monitoring of the screens and profiting from even the smallest of price changes. If you’re reading your emails or checking social media, you’ll likely fail to see success. According to Investopedia, scalping is “A fast-paced activity for nimble traders. It requires precision timing and execution.”

Scalpers focus on time frame interval charts like the one-minute and five-minute candlestick charts and look out for certain momentum indicators. These could be the relative strength index (RSI), the moving average convergence divergence (MACD), or stochastic. Price chart indicators are also commonly used to identify support and resistance levels.

One of the biggest mistakes a scalper can make according to Investopedia (and echoed by Adam’s words) is late exits (holding a position open for too long). This exposes them to more risk and can turn a profitable day into a losing one if they get caught out in the wrong position. Since scalping generates high commission fees from extensive trading, successfully scalping is currently almost impossible in today’s cryptocurrency markets.

Want to try your hand at trading commission-free on the Digitex Futures exchange? With the beta version handling insane volume, you can practice your skills on our trading ladder interface and hone your strategy before the mainnet release on April 27, 2020.

JOIN NOW
Scalping on Digitex Futures

At Digitex Futures, we want to see all types of crypto trading strategies used so that we appeal to a wide net of traders. However, one of the main things we are looking forward to when we come to market is to at last stop punishing our most active traders, the ones who provide liquidity to the market with commission fees.

As Adam said, “As a scalper, I shouldn’t be paying a percentage of the notional value of the underlying instrument. I’m providing liquidity and should be encouraged, not squeezed out of the market entirely.”

Since we will charge no maker or taker fees on any trade, scalpers will be able to enter and exit as many positions as they like. They’ll be able to make a real living out of aggressive day trading without worrying about how much they have to give back to the house.

Do you want to stock up on DGTX tokens ahead of the mainnet launch? You can head over to the Digitex Treasury for a trustless transaction with zero slippage and completely KYC-free now.

BUY DGTX

 

Latest News

Speculating

What Is the Difference Between Speculating vs. Trading vs. Investing?

Digitex Futures
• Luke Green
March 20, 2020

Becoming financially literate is perhaps one of the most important skills you can learn on the path to financial freedom. With so many ways to put your money to work, it’s important to understand the mechanics behind each approach. With that in mind, let’s take a deeper dive into the difference between speculating, trading, and investing.

Difference Between Speculating, Trading and Investing?
Speculating

When you think about it, we are actually doing this most of the time, be it about the weather, the cast of a hotly-anticipated film or what Facebook might be doing with our data. In essence, it’s simply taking what you know now and predicting the likelihood of a certain outcome.

Despite being a fantastic conversation starter, in the investment world, speculating essentially puts cold hard cash on the line for those hunches. It can be both highly risky and highly profitable.

As the well-known band, Faithless once sang in their song Reverence, you don’t need eyes to see, you need vision. And nothing could be more important when choosing this approach to your wealth management. The most successful speculative investors, sometimes known as Angel Investors, are often highly inquisitive. They constantly imagine future opportunities within their fields of expertise.

This “vision” and forward-thinking not only allows them to be entrepreneurial with their own business ideas, but it also lets them connect the dots and spot companies with huge upside potential, very early within their success trajectory.

This allows them to inject capital into vastly undervalued assets before they become widely known. Jeff Bezos, the founder of Amazon, for example, was an early Angel investor in a fledgeling internet search company called BackRub (oh the irony). It went on, of course, to be known as Google.

While many Angel Investment opportunities remain in the domain of a privileged few, speculative investment has now become much more mainstream and accessible. Initially through fundraising platforms like Kickstarter, Indigogo, and Seeders. But in recent times, via new investment vehicles like ICOs or STO offerings.

These new ways to raise capital have somewhat leveled the playing field exposing a whole new class of mainstream retail investors to the exciting and potentially lucrative world of speculative investment.

Trading

It’s crazy to think that our earliest ancestors were traders, bartering goods between tribes back in prehistoric times. To put this into some kind of perspective as to how deeply embedded into the human psyche it is, that’s around the same time as the first-ever human communication some 150,000 years ago!

But fast-forward to 2019 and you’d be forgiven for being confused by the huge variety and complex methods by which you can perform this ancient and simple action.

For all its apparent modern sophistication, trading, specifically in relation to stocks, shares or cryptocurrencies, is simply the act of buying something for one price and selling it for another, with the goal of making a profit.

While trading does indeed involve an element of both investment and speculation, it differs from both in that its proponents may not even care or understand what it is they are buying or selling.

As Adam pointed out during the TraderCobb Podcast. He managed an 8-month winning streak on Betfair without any knowledge of horse racing at all. He just knew what he could buy the bet for and what he could sell it at.

Want to try your hand at trading commission-free on the Digitex Futures exchange? With the beta version handling insane volume, you can practice your skills on our trading ladder interface and hone your strategy before the mainnet release on April 27, 2020.

JOIN NOW
Types of Trading Strategies

Depending on the type of trading being undertaken, there are a number of different trading strategies that can be employed. What tends to separate them is the timeline over which the trade takes place alongside the type of analysis deployed, specifically to judge the risk and reward.

The Digitex online futures trading platform will finally make it viable for retail traders through commission-free trades, to pursue a trading style called scalping.

In this approach, the gap between the trader buying the asset and selling it may be no longer than a few minutes; perhaps even seconds.

But by employing tools such as order flow, ladder trading interfaces or algorithms (automated futures trading programs called bots), traders can execute lots of trades quickly. With a commission-free platform, disciplined traders will be able to turn small profits into large gains over time.

Investing

Investing is of course, fundamental to both trading and speculating, as, by definition, it represents the “what” you risk when pursuing these strategies. However, in the general sense, the difference between speculating vs. trading vs. investing is that investing represents money-making strategies that are generally over much longer timelines. These can often be years, and with much lower volatility and risk/reward profiles.

The vast majority of people who invest are doing so for long-term goals, such as retirement, or future financial freedom. As a result of this, making an investment is almost always based on something that has a solid (and preferably a long history) of stable growth and returns. This is a critical difference between trading vs. investing, as traders make money in down markets, whereas investors tend to rely on growth markets.

As with many financial services, investment as a financial vehicle has experienced a Cambrian explosion of innovation, driven in part by the cryptocurrency and fintech industries.

This has lead to a dizzying amount of ways you can invest and made it easier than ever before to do so. From more traditional markets like stocks and shares, tracker funds or ETFs to cutting-edge uses such as Crypto Asset Lending; there’s no shortage of places to put your money.

Ultimately, whichever investment instrument you choose, your goal is to gradually build wealth over an extended period. If you are sensible and have time on your side, it can be a very stress-free way to manage and grow your wealth, often insulating you from the impact of short-term market fluctuations.

Wrapping It Up

When comparing speculating vs. trading vs. investing, there is certainly one aspect that is common to them all. That’s taking full responsibility for judging your risk vs your reward.

Of course, what you’re willing to risk for what reward is just as unique as your personality. But truly analyzing this and how you make these judgments can be highly revealing on a personal level.

Any time you take to learn and understand this is perhaps the most worthwhile investment you can make. It will help you make not just better financial judgments, but better decisions all round.

With the upcoming Digitex mainnet release, we are committed to producing successful traders. Commission-free trades and a provably fair matching engine with market makers programmed to lose will level the playing field more than ever. So whatever investment strategy suits you best, there is a place for you on the exchange.

Do you want to stock up on DGTX tokens ahead of the mainnet launch? You can head over to the Digitex Treasury for a trustless transaction with zero slippage and completely KYC-free now.

BUY DGTX
March 20, 2020
Digitex Futures

What Is the Difference Between Speculating vs. Trading vs. Investing?

Luke Green
Speculating

Becoming financially literate is perhaps one of the most important skills you can learn on the path to financial freedom. With so many ways to put your money to work, it’s important to understand the mechanics behind each approach. With that in mind, let’s take a deeper dive into the difference between speculating, trading, and investing.

Difference Between Speculating, Trading and Investing?
Speculating

When you think about it, we are actually doing this most of the time, be it about the weather, the cast of a hotly-anticipated film or what Facebook might be doing with our data. In essence, it’s simply taking what you know now and predicting the likelihood of a certain outcome.

Despite being a fantastic conversation starter, in the investment world, speculating essentially puts cold hard cash on the line for those hunches. It can be both highly risky and highly profitable.

As the well-known band, Faithless once sang in their song Reverence, you don’t need eyes to see, you need vision. And nothing could be more important when choosing this approach to your wealth management. The most successful speculative investors, sometimes known as Angel Investors, are often highly inquisitive. They constantly imagine future opportunities within their fields of expertise.

This “vision” and forward-thinking not only allows them to be entrepreneurial with their own business ideas, but it also lets them connect the dots and spot companies with huge upside potential, very early within their success trajectory.

This allows them to inject capital into vastly undervalued assets before they become widely known. Jeff Bezos, the founder of Amazon, for example, was an early Angel investor in a fledgeling internet search company called BackRub (oh the irony). It went on, of course, to be known as Google.

While many Angel Investment opportunities remain in the domain of a privileged few, speculative investment has now become much more mainstream and accessible. Initially through fundraising platforms like Kickstarter, Indigogo, and Seeders. But in recent times, via new investment vehicles like ICOs or STO offerings.

These new ways to raise capital have somewhat leveled the playing field exposing a whole new class of mainstream retail investors to the exciting and potentially lucrative world of speculative investment.

Trading

It’s crazy to think that our earliest ancestors were traders, bartering goods between tribes back in prehistoric times. To put this into some kind of perspective as to how deeply embedded into the human psyche it is, that’s around the same time as the first-ever human communication some 150,000 years ago!

But fast-forward to 2019 and you’d be forgiven for being confused by the huge variety and complex methods by which you can perform this ancient and simple action.

For all its apparent modern sophistication, trading, specifically in relation to stocks, shares or cryptocurrencies, is simply the act of buying something for one price and selling it for another, with the goal of making a profit.

While trading does indeed involve an element of both investment and speculation, it differs from both in that its proponents may not even care or understand what it is they are buying or selling.

As Adam pointed out during the TraderCobb Podcast. He managed an 8-month winning streak on Betfair without any knowledge of horse racing at all. He just knew what he could buy the bet for and what he could sell it at.

Want to try your hand at trading commission-free on the Digitex Futures exchange? With the beta version handling insane volume, you can practice your skills on our trading ladder interface and hone your strategy before the mainnet release on April 27, 2020.

JOIN NOW
Types of Trading Strategies

Depending on the type of trading being undertaken, there are a number of different trading strategies that can be employed. What tends to separate them is the timeline over which the trade takes place alongside the type of analysis deployed, specifically to judge the risk and reward.

The Digitex online futures trading platform will finally make it viable for retail traders through commission-free trades, to pursue a trading style called scalping.

In this approach, the gap between the trader buying the asset and selling it may be no longer than a few minutes; perhaps even seconds.

But by employing tools such as order flow, ladder trading interfaces or algorithms (automated futures trading programs called bots), traders can execute lots of trades quickly. With a commission-free platform, disciplined traders will be able to turn small profits into large gains over time.

Investing

Investing is of course, fundamental to both trading and speculating, as, by definition, it represents the “what” you risk when pursuing these strategies. However, in the general sense, the difference between speculating vs. trading vs. investing is that investing represents money-making strategies that are generally over much longer timelines. These can often be years, and with much lower volatility and risk/reward profiles.

The vast majority of people who invest are doing so for long-term goals, such as retirement, or future financial freedom. As a result of this, making an investment is almost always based on something that has a solid (and preferably a long history) of stable growth and returns. This is a critical difference between trading vs. investing, as traders make money in down markets, whereas investors tend to rely on growth markets.

As with many financial services, investment as a financial vehicle has experienced a Cambrian explosion of innovation, driven in part by the cryptocurrency and fintech industries.

This has lead to a dizzying amount of ways you can invest and made it easier than ever before to do so. From more traditional markets like stocks and shares, tracker funds or ETFs to cutting-edge uses such as Crypto Asset Lending; there’s no shortage of places to put your money.

Ultimately, whichever investment instrument you choose, your goal is to gradually build wealth over an extended period. If you are sensible and have time on your side, it can be a very stress-free way to manage and grow your wealth, often insulating you from the impact of short-term market fluctuations.

Wrapping It Up

When comparing speculating vs. trading vs. investing, there is certainly one aspect that is common to them all. That’s taking full responsibility for judging your risk vs your reward.

Of course, what you’re willing to risk for what reward is just as unique as your personality. But truly analyzing this and how you make these judgments can be highly revealing on a personal level.

Any time you take to learn and understand this is perhaps the most worthwhile investment you can make. It will help you make not just better financial judgments, but better decisions all round.

With the upcoming Digitex mainnet release, we are committed to producing successful traders. Commission-free trades and a provably fair matching engine with market makers programmed to lose will level the playing field more than ever. So whatever investment strategy suits you best, there is a place for you on the exchange.

Do you want to stock up on DGTX tokens ahead of the mainnet launch? You can head over to the Digitex Treasury for a trustless transaction with zero slippage and completely KYC-free now.

BUY DGTX

Latest News

A Look at the Best Crypto Trading Strategies 21

A Look at the Best Crypto Trading Strategies

Digitex Futures
Trading
• Dave Reiter
February 11, 2020

In the world of trading and investing, there are two different methods for speculating across all asset classes.

Speculators are divided into one of the following categories: fundamental analysis or technical analysis.

Let’s examine each category and consider how they can be used to develop crypto trading strategies that work.

Fundamental Analysis vs. Technical Analysis

Fundamental analysis is most widely used among stock market traders, particularly those who invest in individual stocks. This particular method focuses on the earnings per share (EPS), price-to-earnings (P/E) ratio, dividend yield, and debt-to-equity ratio.

The main objective of fundamental analysis is to determine the intrinsic value of the individual stock. If the price of the stock is trading below its intrinsic value, an investor may want to buy the stock.

Investors use fundamental analysis with other asset classes such as bonds, commodities, and alternative investments. Regardless of the asset class, the objective is always the same — to determine the intrinsic value of the underlying asset.

If the asset is trading below its intrinsic value, the investor would be inclined to buy the security based on the fact that it’s undervalued. This can be a foundation of day trading futures strategies.

Technical analysis uses a completely different method. It’s a trading approach designed to evaluate investment flows and trading opportunities by analyzing statistical trends.

These statistical trends are gathered from various trading activities, most notably price movement and volume.

Technical analysis makes no effort to determine intrinsic value. Instead, it focuses on patterns derived from price movements and charting tools. These tools are used to appraise the strength or weakness of the underlying security or asset class and determine the day trading strategies for cryptocurrency or other assets.

Although technical analysis can be used with any asset class, it is most widely used among currency and commodity traders. Why?

Because historical research suggests that currencies and commodities generate much better performance results when traders use trend-following tools commonly found in technical analysis to develop their day trading futures strategies.

Do you want to try your hand at trading cryptocurrencies? Check out Digitex, a next-generation crypto trading platform where you can trade Bitcoin derivatives without paying any fees. With a zero-fee trading experience, you can limit your losses and maximize your gains while enjoying the benefits of a robust, beginner-friendly exchange service.

Register An Account At Digitex Now!

Cryptocurrencies Work Best With Technical Analysis

Although cryptocurrencies have only been in existence for 10 years, technical analysis has proven to generate good crypto trading strategies and a better trading experience versus fundamental analysis.

Given the dramatic price fluctuations within the crypto universe, it’s virtually impossible to accurately determine the intrinsic value of any cryptocurrency, including Bitcoin. Therefore, it’s impractical to apply fundamental analysis if the intrinsic value is unavailable. As a result, the best futures trading strategies for crypto incorporate technical indicators.

Cryptocurrencies behave in a similar manner to commodities and foreign currencies (forex). Therefore, using technical indicators is the best course of action.

While there are hundreds of different technical indicators, it can be rather difficult to select the best ones when developing your day trading cryptocurrency strategy. Some simply work better than others.

Let’s review a few of the indicators that have yielded decent results for trading cryptocurrencies. We’ll use Bitcoin in our examples, but keep in mind that the best crypto trading strategy advice can usually be used for any coin.

Pay Attention to Volume

Volume can provide several clues to the underlying strength or weakness of the market. It can give early warning signs concerning a possible change in trend.

That said, many traders don’t pay attention to volume when developing their crypto trading strategies. However, this is a mistake as the indicator provides a “snapshot” picture of how many traders are actually establishing positions at various price levels.

The best way to use this indicator to develop a day trading cryptocurrency strategy is to compare and contrast the daily volume on a big up day or a big down day. If a bullish breakout is not confirmed by record volume, it’s probably a false breakout.

Also, if a bearish breakout is not validated by record volume, the most likely outcome is a false breakout in this case as well.

Let’s take a look at a perfect example of a false breakout that occurred in March 2021.

A Look at the Best Crypto Trading Strategies 22

As you can see in the chart above, a strong resistance level formed at $51,354 on February 24 from previous support. On March 2 at 20:00, BTC entered into a short bull run, in which it surged from $47,450 to $51,681 by March 3.

However, the volume was weak (3,240 BTC divided between four candlesticks). For comparison, users traded 10,748 coins while Bitcoin gained $3,615 between February 16 and 17.

As a result, this turned out to be a false breakout, with the BTC price rolling over to the downside, eliminating all the gains from the cryptocurrency’s bull run in the next few days.

However, those with great crypto trading strategies who followed the volume indicator on March 2 and 3 were able to cut their losses very quickly.

A Look at the Best Crypto Trading Strategies 23

The volume indicator produced another signal on February 22. A sell signal occurred at $54,237 on the heavy daily volume of 17,000 BTC (users traded 3,563 BTC on the previous day).

Traders who identified the crypto trading signal and shorted BTC at $54,237 enjoyed a very profitable trade, in which the digital asset fell down to $45,309 until its price started to increase again. The volume indicator worked incredibly well on this particular trade.

A Look at the Best Crypto Trading Strategies 24

A third signal occurred on March 13. The volume indicator initiated a sell signal at $61,153 as Bitcoin’s strong surge that day was not matched by record volume (only 6,188 BTC). Therefore, this trade resulted in a false breakout, which moved the cryptocurrency’s price down to $51,344 by March 25.

As you can see, volume is a very useful tool in the world of technical analysis. For that reason, you should always pay attention to volume when developing Bitcoin trading strategies as it has the potential to generate very profitable trades.

More importantly, it can identify false breakouts, which will allow you to cut your losses very quickly. For that reason, you should never ignore the volume of the asset you are planning to trade!

Basing Your Bitcoin Trading Strategies on Relative Strength Index (RSI)

The Relative Strength Index (RSI) is a momentum oscillator that fluctuates between 0 and 100, measuring the speed and change of price movements.

RSI is a fairly popular indicator that can be found on many financial websites and also in day trading strategies for cryptocurrency.

Typically, traders use RSI to determine if a market is overbought or oversold.

The general belief is that a market becomes overbought when RSI exceeds 70. Conversely, a market becomes oversold when RSI drops below 30.

That said, this particular strategy doesn’t work very well in the real world as markets can remain overbought or oversold for extended periods of time. As a result, RSI tends to generate many false signals.

Based on historical research, a more appropriate way to apply RSI is to use it as a confirmation indicator. For example, if Bitcoin is making a new high, RSI should also be making a new high in order to confirm the strength of Bitcoin’s breakout into new territory.

If Bitcoin is making a new low, RSI should also be making a new low to confirm the strength of the cryptocurrency’s breakout into new territory.

A Look at the Best Crypto Trading Strategies 25

The chart above displays a bullish breakout on February 8, 2021 at $46,453. Since the RIS generated a new high along with the BTC price, it confirmed that the breakout is valid, which resulted in a move upward to $57,402 by February 21.

A Look at the Best Crypto Trading Strategies 26

The same outcome occurred on January 6 at $36,843. After testing the resistance line a few times, Bitcoin generated a breakout.

And, like in the previous case, the RSI confirmed the breakout as it jumped to record highs. As a result, traders who placed an order at $36,843 could profit $4,460 as BTC surged to $41,303 before entering into a correction.

The RSI indicator works remarkably well at confirming bullish and bearish breakouts. Traders who have the discipline to follow this indicator will save money by ignoring the trades that are not validated by a new RSI breakout.

Don’t Ignore Money Flow

The Money Flow Index (MFI) is a momentum indicator that measures the inflow and outflow of money into a security over a specific period of time. It uses price and volume to calculate trading pressure.

Arguably, MFI is the surest way to determine the amount of money entering and leaving a particular security or market. And if you’re looking to develop the best crypto trading strategy, you can’t ignore MFI.

Similar to the RSI, the index fluctuates between 0 and 100. In terms of Bitcoin, the best way to apply MFI for great crypto trading strategies is to use it as a validation tool.

For example, if Bitcoin is making a new high, MFI should also be making a new high in order to confirm the strength of Bitcoin’s breakout into new territory.

On the other hand, if Bitcoin is making a new low, MFI should also be making a new low to confirm the strength of BTC’s breakout.

A Look at the Best Crypto Trading Strategies 27

As you can see on the chart above, the MFI invalidated the bullish breakout on January 29, 2021 at 8:00. While Bitcoin surged by a whopping $5,000 that day, the MFI moved just above the levels it was standing eight hours ago.

A Look at the Best Crypto Trading Strategies 28

On the other hand, the MFI did a great job at validating the bullish breakout on March 8. As soon as the BTC price broke through the resistance level, the MFI jumped 10 points while the cryptocurrency’s value surged from $51,000 to $61,218 between March 8 and 13.

True Range Breakout (TRABOS)

The true range breakout indicator (TRABOS) is designed to capture short-term price fluctuations across all asset classes. It generates several buy/sell signals in comparison to most other indicators.

For those who enjoy active crypto trading strategies, TRABOS will be very appealing to your aggressive style of trading. Furthermore, it can also be applied to day trading futures strategies; trading them daily also requires a certain amount of aggression.

The most attractive aspect of TRABOS is based on the fact that it rarely misses a big move. Why? Because trading signals are calculated on a daily basis. Therefore, the indicator is constantly searching for profitable trading opportunities. See below for more information.

Note: A sell signal was generated at $54,663 on February 22, 2021.

The trading rules for TRABOS are rather simple. You can find them below:

1.Calculate the true range (daily high minus daily low).

  1. Buy signal is the closing price plus the true range.
  2. Sell signal is the closing price minus the true range.
  3. If long, the profit target is the daily high on the day of entry.
  4. If long, the protective stop is the low on the day of entry.
  5. If short, the profit target is the daily low on the day of entry.
  6. If short, the protective stop is the high on the day of entry.

A Look at the Best Crypto Trading Strategies 29

Based on the chart above, the TRABOS didn’t generate a signal on February 21.

However, traders could identify a sell signal on February 22 at $54,663. While the BTC price closed at $57,479 on the previous day, the true range was 2,816. For that reason, a bearish signal could be observed on the next day when the cryptocurrency’s value decreased below $54,663.

Putting a protective stop at $57,572, our profit target was the low on the day of entry, which is $47,426.

This turned out to be a very profitable trade because BTC experienced a substantial decline that day and the day after. As a result, we reached our profit target at $47,426 on February 23.

After the trade has been completed, simply calculate a new buy/sell signal for the next day. You can automatically calculate daily TRABOS by using the Average True Range (ATR) indicator and setting its length to 1.

TRABOS creates 2 to 3 trades per week. The key to success is to consistently take every trade for an extended period of time.

Since TRABOS generates a large number of buy/sell signals, it is an excellent indicator for traders on the Digitex Futures platform. As Digitex is 100% commission-free, it doesn’t hurt the profitability of traders by imposing fees on their positions (a 0.10% cost would take away 10% from margin traders using a 100x leverage).

For that reason, trading on Digitex will dramatically reduce the cost of trading for aggressive crypto trading strategies that incorporate indicators like TRABOS.

Crypto Trading Strategies – Wrapping It Up

While they are definitely useful, the four indicators listed in this article are certainly not perfect. However, when taken as a group, they provide an excellent approach to trading cryptocurrencies.

No matter whether cryptocurrencies are bullish or bearish, it’s certainly possible to trade crypto successfully amid any market conditions.

However, it requires patience, discipline, and a handful of reliable indicators. While it’s easy to pick the right indicators, the hard part is being patient, disciplined, and dedicated when leveraging your crypto trading strategies.

That said, developing the best futures trading strategies will take more than just knowledge of these indicators, but they’re a good place to start.

Personal Observations

I’ve been trading commodities for three decades. In 2016, I began trading cryptocurrencies.

Throughout my trading career, I’ve used technical analysis 100% of the time and have found it to be integral to developing the best crypto trading strategy.

Based on my trading results, I’m convinced that certain price patterns are repetitive in nature. I believe in the notion that past trading activity and price movements are valuable indicators of future price direction.

I’m also convinced that technical analysis will generate superior results, particularly if the technical indicators are trend-following in nature.

Leverage Your Crypto Trading Strategies on Digitex

High fees can easily turn the profits of traders into losses.

To avoid hurting your profitability, the revolutionary Bitcoin derivatives trading platform Digitex completely eliminated fees on its platform. As a result, you get more winning trades, more often while leveraging your crypto trading strategies on the Digitex futures exchange.

In addition to keeping 100% of your revenue while utilizing a robust crypto trading platform, Digitex also features multiple rewards programs.

By yield farming the exchange’s native DGTX token on Uniswap, you can benefit from a generous 10.90% APY with the option to multiply your gains by providing liquidity for longer periods.

On top of that, Digitex also rewards users for simply trading cryptocurrency via its liquidity mining program.

In exchange for providing liquidity to the platform with unfilled orders, Digitex traders can earn up to 140 DGTX each minute. The rewards are distributed proportionally between those whose unmatched orders were the closest to the spot price at the time the system randomly takes a snapshot of the order book.

To reap all these benefits, be sure to create an account at the Bitcoin derivatives exchange Digitex.

Gaining 222% in March, DGTX is also a hot asset for both investors and traders, which you can now buy using a credit or a debit card.

Sounds great, huh?

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Digitex Futures writers and/or guest authors may or may not have a vested interest in the Digitex Futures project and/or other businesses mentioned throughout the site. None of the content on Digitex Futures is investment advice, nor is it a replacement for advice from a certified financial planner.

February 11, 2020
Digitex Futures
Trading

A Look at the Best Crypto Trading Strategies

Dave Reiter
A Look at the Best Crypto Trading Strategies 30

In the world of trading and investing, there are two different methods for speculating across all asset classes.

Speculators are divided into one of the following categories: fundamental analysis or technical analysis.

Let’s examine each category and consider how they can be used to develop crypto trading strategies that work.

Fundamental Analysis vs. Technical Analysis

Fundamental analysis is most widely used among stock market traders, particularly those who invest in individual stocks. This particular method focuses on the earnings per share (EPS), price-to-earnings (P/E) ratio, dividend yield, and debt-to-equity ratio.

The main objective of fundamental analysis is to determine the intrinsic value of the individual stock. If the price of the stock is trading below its intrinsic value, an investor may want to buy the stock.

Investors use fundamental analysis with other asset classes such as bonds, commodities, and alternative investments. Regardless of the asset class, the objective is always the same — to determine the intrinsic value of the underlying asset.

If the asset is trading below its intrinsic value, the investor would be inclined to buy the security based on the fact that it’s undervalued. This can be a foundation of day trading futures strategies.

Technical analysis uses a completely different method. It’s a trading approach designed to evaluate investment flows and trading opportunities by analyzing statistical trends.

These statistical trends are gathered from various trading activities, most notably price movement and volume.

Technical analysis makes no effort to determine intrinsic value. Instead, it focuses on patterns derived from price movements and charting tools. These tools are used to appraise the strength or weakness of the underlying security or asset class and determine the day trading strategies for cryptocurrency or other assets.

Although technical analysis can be used with any asset class, it is most widely used among currency and commodity traders. Why?

Because historical research suggests that currencies and commodities generate much better performance results when traders use trend-following tools commonly found in technical analysis to develop their day trading futures strategies.

Do you want to try your hand at trading cryptocurrencies? Check out Digitex, a next-generation crypto trading platform where you can trade Bitcoin derivatives without paying any fees. With a zero-fee trading experience, you can limit your losses and maximize your gains while enjoying the benefits of a robust, beginner-friendly exchange service.

Register An Account At Digitex Now!

Cryptocurrencies Work Best With Technical Analysis

Although cryptocurrencies have only been in existence for 10 years, technical analysis has proven to generate good crypto trading strategies and a better trading experience versus fundamental analysis.

Given the dramatic price fluctuations within the crypto universe, it’s virtually impossible to accurately determine the intrinsic value of any cryptocurrency, including Bitcoin. Therefore, it’s impractical to apply fundamental analysis if the intrinsic value is unavailable. As a result, the best futures trading strategies for crypto incorporate technical indicators.

Cryptocurrencies behave in a similar manner to commodities and foreign currencies (forex). Therefore, using technical indicators is the best course of action.

While there are hundreds of different technical indicators, it can be rather difficult to select the best ones when developing your day trading cryptocurrency strategy. Some simply work better than others.

Let’s review a few of the indicators that have yielded decent results for trading cryptocurrencies. We’ll use Bitcoin in our examples, but keep in mind that the best crypto trading strategy advice can usually be used for any coin.

Pay Attention to Volume

Volume can provide several clues to the underlying strength or weakness of the market. It can give early warning signs concerning a possible change in trend.

That said, many traders don’t pay attention to volume when developing their crypto trading strategies. However, this is a mistake as the indicator provides a “snapshot” picture of how many traders are actually establishing positions at various price levels.

The best way to use this indicator to develop a day trading cryptocurrency strategy is to compare and contrast the daily volume on a big up day or a big down day. If a bullish breakout is not confirmed by record volume, it’s probably a false breakout.

Also, if a bearish breakout is not validated by record volume, the most likely outcome is a false breakout in this case as well.

Let’s take a look at a perfect example of a false breakout that occurred in March 2021.

A Look at the Best Crypto Trading Strategies 31

As you can see in the chart above, a strong resistance level formed at $51,354 on February 24 from previous support. On March 2 at 20:00, BTC entered into a short bull run, in which it surged from $47,450 to $51,681 by March 3.

However, the volume was weak (3,240 BTC divided between four candlesticks). For comparison, users traded 10,748 coins while Bitcoin gained $3,615 between February 16 and 17.

As a result, this turned out to be a false breakout, with the BTC price rolling over to the downside, eliminating all the gains from the cryptocurrency’s bull run in the next few days.

However, those with great crypto trading strategies who followed the volume indicator on March 2 and 3 were able to cut their losses very quickly.

A Look at the Best Crypto Trading Strategies 32

The volume indicator produced another signal on February 22. A sell signal occurred at $54,237 on the heavy daily volume of 17,000 BTC (users traded 3,563 BTC on the previous day).

Traders who identified the crypto trading signal and shorted BTC at $54,237 enjoyed a very profitable trade, in which the digital asset fell down to $45,309 until its price started to increase again. The volume indicator worked incredibly well on this particular trade.

A Look at the Best Crypto Trading Strategies 33

A third signal occurred on March 13. The volume indicator initiated a sell signal at $61,153 as Bitcoin’s strong surge that day was not matched by record volume (only 6,188 BTC). Therefore, this trade resulted in a false breakout, which moved the cryptocurrency’s price down to $51,344 by March 25.

As you can see, volume is a very useful tool in the world of technical analysis. For that reason, you should always pay attention to volume when developing Bitcoin trading strategies as it has the potential to generate very profitable trades.

More importantly, it can identify false breakouts, which will allow you to cut your losses very quickly. For that reason, you should never ignore the volume of the asset you are planning to trade!

Basing Your Bitcoin Trading Strategies on Relative Strength Index (RSI)

The Relative Strength Index (RSI) is a momentum oscillator that fluctuates between 0 and 100, measuring the speed and change of price movements.

RSI is a fairly popular indicator that can be found on many financial websites and also in day trading strategies for cryptocurrency.

Typically, traders use RSI to determine if a market is overbought or oversold.

The general belief is that a market becomes overbought when RSI exceeds 70. Conversely, a market becomes oversold when RSI drops below 30.

That said, this particular strategy doesn’t work very well in the real world as markets can remain overbought or oversold for extended periods of time. As a result, RSI tends to generate many false signals.

Based on historical research, a more appropriate way to apply RSI is to use it as a confirmation indicator. For example, if Bitcoin is making a new high, RSI should also be making a new high in order to confirm the strength of Bitcoin’s breakout into new territory.

If Bitcoin is making a new low, RSI should also be making a new low to confirm the strength of the cryptocurrency’s breakout into new territory.

A Look at the Best Crypto Trading Strategies 34

The chart above displays a bullish breakout on February 8, 2021 at $46,453. Since the RIS generated a new high along with the BTC price, it confirmed that the breakout is valid, which resulted in a move upward to $57,402 by February 21.

A Look at the Best Crypto Trading Strategies 35

The same outcome occurred on January 6 at $36,843. After testing the resistance line a few times, Bitcoin generated a breakout.

And, like in the previous case, the RSI confirmed the breakout as it jumped to record highs. As a result, traders who placed an order at $36,843 could profit $4,460 as BTC surged to $41,303 before entering into a correction.

The RSI indicator works remarkably well at confirming bullish and bearish breakouts. Traders who have the discipline to follow this indicator will save money by ignoring the trades that are not validated by a new RSI breakout.

Don’t Ignore Money Flow

The Money Flow Index (MFI) is a momentum indicator that measures the inflow and outflow of money into a security over a specific period of time. It uses price and volume to calculate trading pressure.

Arguably, MFI is the surest way to determine the amount of money entering and leaving a particular security or market. And if you’re looking to develop the best crypto trading strategy, you can’t ignore MFI.

Similar to the RSI, the index fluctuates between 0 and 100. In terms of Bitcoin, the best way to apply MFI for great crypto trading strategies is to use it as a validation tool.

For example, if Bitcoin is making a new high, MFI should also be making a new high in order to confirm the strength of Bitcoin’s breakout into new territory.

On the other hand, if Bitcoin is making a new low, MFI should also be making a new low to confirm the strength of BTC’s breakout.

A Look at the Best Crypto Trading Strategies 36

As you can see on the chart above, the MFI invalidated the bullish breakout on January 29, 2021 at 8:00. While Bitcoin surged by a whopping $5,000 that day, the MFI moved just above the levels it was standing eight hours ago.

A Look at the Best Crypto Trading Strategies 37

On the other hand, the MFI did a great job at validating the bullish breakout on March 8. As soon as the BTC price broke through the resistance level, the MFI jumped 10 points while the cryptocurrency’s value surged from $51,000 to $61,218 between March 8 and 13.

True Range Breakout (TRABOS)

The true range breakout indicator (TRABOS) is designed to capture short-term price fluctuations across all asset classes. It generates several buy/sell signals in comparison to most other indicators.

For those who enjoy active crypto trading strategies, TRABOS will be very appealing to your aggressive style of trading. Furthermore, it can also be applied to day trading futures strategies; trading them daily also requires a certain amount of aggression.

The most attractive aspect of TRABOS is based on the fact that it rarely misses a big move. Why? Because trading signals are calculated on a daily basis. Therefore, the indicator is constantly searching for profitable trading opportunities. See below for more information.

Note: A sell signal was generated at $54,663 on February 22, 2021.

The trading rules for TRABOS are rather simple. You can find them below:

1.Calculate the true range (daily high minus daily low).

  1. Buy signal is the closing price plus the true range.
  2. Sell signal is the closing price minus the true range.
  3. If long, the profit target is the daily high on the day of entry.
  4. If long, the protective stop is the low on the day of entry.
  5. If short, the profit target is the daily low on the day of entry.
  6. If short, the protective stop is the high on the day of entry.

A Look at the Best Crypto Trading Strategies 38

Based on the chart above, the TRABOS didn’t generate a signal on February 21.

However, traders could identify a sell signal on February 22 at $54,663. While the BTC price closed at $57,479 on the previous day, the true range was 2,816. For that reason, a bearish signal could be observed on the next day when the cryptocurrency’s value decreased below $54,663.

Putting a protective stop at $57,572, our profit target was the low on the day of entry, which is $47,426.

This turned out to be a very profitable trade because BTC experienced a substantial decline that day and the day after. As a result, we reached our profit target at $47,426 on February 23.

After the trade has been completed, simply calculate a new buy/sell signal for the next day. You can automatically calculate daily TRABOS by using the Average True Range (ATR) indicator and setting its length to 1.

TRABOS creates 2 to 3 trades per week. The key to success is to consistently take every trade for an extended period of time.

Since TRABOS generates a large number of buy/sell signals, it is an excellent indicator for traders on the Digitex Futures platform. As Digitex is 100% commission-free, it doesn’t hurt the profitability of traders by imposing fees on their positions (a 0.10% cost would take away 10% from margin traders using a 100x leverage).

For that reason, trading on Digitex will dramatically reduce the cost of trading for aggressive crypto trading strategies that incorporate indicators like TRABOS.

Crypto Trading Strategies – Wrapping It Up

While they are definitely useful, the four indicators listed in this article are certainly not perfect. However, when taken as a group, they provide an excellent approach to trading cryptocurrencies.

No matter whether cryptocurrencies are bullish or bearish, it’s certainly possible to trade crypto successfully amid any market conditions.

However, it requires patience, discipline, and a handful of reliable indicators. While it’s easy to pick the right indicators, the hard part is being patient, disciplined, and dedicated when leveraging your crypto trading strategies.

That said, developing the best futures trading strategies will take more than just knowledge of these indicators, but they’re a good place to start.

Personal Observations

I’ve been trading commodities for three decades. In 2016, I began trading cryptocurrencies.

Throughout my trading career, I’ve used technical analysis 100% of the time and have found it to be integral to developing the best crypto trading strategy.

Based on my trading results, I’m convinced that certain price patterns are repetitive in nature. I believe in the notion that past trading activity and price movements are valuable indicators of future price direction.

I’m also convinced that technical analysis will generate superior results, particularly if the technical indicators are trend-following in nature.

Leverage Your Crypto Trading Strategies on Digitex

High fees can easily turn the profits of traders into losses.

To avoid hurting your profitability, the revolutionary Bitcoin derivatives trading platform Digitex completely eliminated fees on its platform. As a result, you get more winning trades, more often while leveraging your crypto trading strategies on the Digitex futures exchange.

In addition to keeping 100% of your revenue while utilizing a robust crypto trading platform, Digitex also features multiple rewards programs.

By yield farming the exchange’s native DGTX token on Uniswap, you can benefit from a generous 10.90% APY with the option to multiply your gains by providing liquidity for longer periods.

On top of that, Digitex also rewards users for simply trading cryptocurrency via its liquidity mining program.

In exchange for providing liquidity to the platform with unfilled orders, Digitex traders can earn up to 140 DGTX each minute. The rewards are distributed proportionally between those whose unmatched orders were the closest to the spot price at the time the system randomly takes a snapshot of the order book.

To reap all these benefits, be sure to create an account at the Bitcoin derivatives exchange Digitex.

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Purchase DGTX Now!

Digitex Futures writers and/or guest authors may or may not have a vested interest in the Digitex Futures project and/or other businesses mentioned throughout the site. None of the content on Digitex Futures is investment advice, nor is it a replacement for advice from a certified financial planner.

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