How to Trade Bitcoin & Other Cryptocurrencies – A Step-by-Step Strategy

How's it going guys? It's Austin with the Crypto Playhouse and recently we've been getting a lot of requests from people on how to trade Bitcoin and other altcoins One of the big things that we see a lot on social media is people are just holding their altcoin, holding their Bitcoin and watching it go to the moon, and the reality is, that's not trading

That's just holding on to your coins and sell them when they hit peaks So today we're gonna give you a quick, simple strategy on how to trade and get you guys started from the get-go [opening music] So as I mentioned, today we're gonna jump in and we're gonna take a look at a quick and simple strategy on how to get you guys started trading We were trying to figure some things out to make things easy for beginners and we sat down with our portfolio manager He's been in the Forex market for decades at this point

He's done stocks, futures, bonds He's done it all So cryptos is a new thing, but it does relate over to these markets quite a bit, so we got some simple indicators that you can do with the TradingView overlay, with the free version, so with the basic free indicators anyone can do this They can set this up for themselves and I'll walk through it I'm gonna show you guys what time cycles we use on this and from there, if you wanna get the pro version and build up more indicators, that's fine, but this is more than enough to get you started and getting some winning trades

So the first thing that we're gonna add in is we're gonna come over here up to our indicators and I've got these favorited, but I'll show you on the technical analysis just so you know where to find them The first one is gonna be an Arnaud moving average Now, I'm not gonna go too much into these indicators and the logistics of each one, but I'm gonna show you how to put them in, the time cycles, and I'm gonna show you what you're looking for within these indicators to start making some good trades So we got our first indicator here It's the Arnaud Legoux Moving Average

We're gonna come in here and this one because we're doing 1 minute time cycles, which by the way, if you're starting out, it's a great point to start from There's a little more volatility in the one minute cycles, but with this altcoins there is an issue of liquidity, so holding longer positions when you're first starting out, could really come back to bite you So it's a good idea, start on your 1 minute cycles and expand out from there So for this moving average, we're gonna come in here and this is just gonna be a simple 5-minute average It's a little sharper than I like on some of the longer moves, but like I said, we're doing one-minute cycles

We want something simple and easy to read So we're gonna go in there, five minutes, turn it green so it's nice and easy to see and you bump that size up a bit, because this is really what you're gonna be looking at, even more so than the bars Remember, your purchases and your sells should be coming from the order book, not the bars So once we got that in there, we're gonna come over and go back to our indicators and we're gonna get in a set of Bollinger Bands here Now with the TradingView overlay, for the free version, you only get three indicators and the Bollinger bands almost give you a free indicator, because that mid-line is in essence just another moving average, so once again we're gonna come up here and edit this one and we're going to do our center-line at a 21-minute cycle for this for our long

Come back over We're gonna make that a brighter red and one size smaller than our minute-by-minute, the 5-minute moving average So we set that in We're all set and ready to go on those two And last we're gonna come over, one more indicator and we come down and you're looking for the MACD

We'll start out with just a regular It's a moving average convergence-divergence, so add this one in Add it once again Now, in terms of your histogram here, personally I much prefer an area with breaks It's a little bit easier to see

It does smooth things out a little bit more than the basic histogram, so we're gonna come over area with breaks, nice and easy, and for our inputs, all of these by the way are moving on Fibonacci number sets I'm not gonna go too much into why we do that We will be doing that in a later, more advanced video, but for now all you need to know is we're doing an 8-minute for the fast length and a 35 for the long So we get those We're gonna take them up once size and there we go

So now you got all your indicators It looks all fancy, but what is this stuff actually telling you So if you're just looking at the bars, you're gonna be seeing the moves of the currencies as they go up and down, but realistically, without seeing some kind of average that you're looking at for the total motion of these currencies, just looking at the bars doesn't give you all the information that you need So today we're looking at Monacoin It's really been moving fast

It's been popping up the last few days We've seen 300% growth in a couple of days So this really it has some good breaks and some real good examples of what these indicators are looking for So first we're gonna look at the chart itself As you can see here, the red is our long period moving average and as you can see, it lags a little bit after our bars, but it goes with a general motion and what this is showing you, is basically that on the long period, this is where the general flow of these trades are coming from, but you have to remember, long period is gonna be a little bit slower and then we have our green here, which is our fast period

Now, what you're looking for here is like down at this point, you can see these two begin to break apart You've got your long moving average moving very, very slowly and it's going below and you can see with your fast average, when it breaks out and comes up above this long period moving average, that is going to tell you that now the minute-by-minute purchases and sells are beginning to move faster than the average over the past couple of minutes, so when that begins to happen and you see that fast period moving going up, you may be very well be looking at a rally that's about to begin Now, just the same as seeing those split apart and the fast average moving above that slow average line, you can see once again here, when we see a downturn, and those cross over once again, as you can see, we've got a real steep decline that's occurring here Now, another thing that this allows us to see is beyond the averages, we've got these Bollinger bands here and that's showing basically the same thing, but in a different way, so you can see we've got our top and our bottom here and as things start to slow down and flatten out here, you can see the Bollinger bands begin to pinch So something like this is really useful for is we'll move out to the current cycle, is you can see as the average motion of these currencies is really starting to slow down and the spread is getting closer and closer and closer, you'll be able to see that really before that shrink-down occurs, you can see those Bollinger bands starting to come closer and closer to each other and you that those spreads are getting tighter and tighter and that things are slowing down and often when you see the spreads get tighter and that the numbers are getting closer and closer, it's not a guarantee, but usually, things are compacting and usually you'll see compression before things explode and go out in one direction or the other

This isn't gonna tell you which direction with the Bollingers, but it will tell you that there's likely a big jump that's going to occur Now, for the jump itself, we'll zoom in nice and close here, you can see that as these pinch, our fast average is starting to break away from that slow average and moving up, so you know you're likely about to go into an uptrend Now as for this one here on the bottom, it's basically telling us the same thing as our moving averages that are overlaid over the chart itself, but it gets rid of the bars It reduces some of the noise and I'm doing slightly different time periods, so that does give you a little bit different of a look at things Now once again here, you can see our fast average breaking out over the slow average, but if you look down on our MACD, there's a little bit less space between these two averages, but you can see here that almost the same moment that they're breaking out, there's a little bit where it dives over

You can see this last little dip and you'll notice here, our averages cross over a couple of ticks later on the one that's actually on the chart So having this MACD with a different time cycle, if I saw this and I see the divergence beginning It dips down a little bit and once again, it begins to diverge and then it's just jetting upwards, I know that I'm about to jump into an uptrend and if you see, this is actually occurring before those bars are gonna tell you or before that 5-21 cycle up top is gonna tell you So having different sets of moving averages can really give you different insights into what you're looking at and when to go in for these buys Now, personally, looking at these two charts here, I can see that the divergence begins and it's gotta very steep slope, so while the crossover doesn't happen until this bar here, I personally would see that this divergence is occurring on my MACD and right there when I see that start to blow out and really move apart, I would know this is a good time to buy in; and as things start moving up, you can see the volume is increasing and increasing and then right there, is that first moment where you see that the fast period moving average is starting to dip a bit, so we're gonna zoom out a little bit here, so you guys can see it on the chart

Now when this takes that first dip, you can see that it's occurring on the last upward candle of that cycle, but in all reality, if you saw this as it began, that moving average is going to sit there and dip before the next candle completes So really, instead of losing on this great big candle that's moving down, let's see 890142626

So you're seeing like a 60 point drop on a single one-minute candle and if you saw that second moving average down at the bottom start to dip, you could really beat that candle and sell before you take that big loss So having your indicators set up and watching more than the candles, keeping your eyes on the order book as things come in, it's essential to getting into this game and making smart trades If you just sit there, wait for the candles to get big, you might miss your mark You might take a loss Nobody can guarantee 100% wins on trade, but I can tell you, if you get in there and you start analyzing things with this simple setup we've shown you here, you're gonna boost up your trades

You're gonna do better and as time goes on, you're gonna learn your own ins and outs to this You might change your time cycles to something that you find fits better Every trader out there that's doing things successfully tweaks methods they already have for their own personal way of doing things Now as I said, you should start on one-minute bars As you get more comfortable, you can move up to 5, 15 and things like that and hold longer positions, but I do suggest that if you're gonna hold longer positions, go for a currency that has high volume because with these altcoins, they're very new

The liquidity is always gonna be a question with the newer altcoins, so holding multi-day positions like you can in say, Bitcoin, Ethereum, Dash, you might be at higher risk if you're doing a small altcoin So one of the big things to becoming a successful trader, is you gotta jump You gotta trade Start with some penny altcoins, place some shorter positions and just get comfortable with actually trading on the market before you go big on things When I got started, I was very tenuous about doing things, but the more you do it, the more you're gonna start to able and pick out these patterns for yourself

So really, it's important to jump in Don't be nervous about it Set these indicators up and get going with things Now, coming in the future, we are gonna have some more advanced videos for you guys, for the guys that already in the trading game We're gonna be working with our money manager for those videos as well and as I mentioned before, if you have the TradingView layout, getting the pro version allows you to put five indicators on instead of three

I highly suggest that as you get more accustomed to watching these charts, having those extra indicators really can help you out So we're actually looking at some things for the future as well We're looking at setting up a crypto fund, which could be very, very interesting We're gonna see what happens with that We're working with our money manager as we speak with that and we're also considering doing kind of a crypto prop trading type of situation, so if you guys are out there and you're already trading, start making an order from your market orders

Take those records down If you guys are successful and you're really making things happen, you might be able to join up with us Do some trades Make some profits and it's gonna be real exciting seeing this over the next couple of months as these new alts are really picking up, because the trading market has really opened up a whole new world We got Bitcoin futures going live on the 10th

I mean, it's gonna be huge guys! So anyways, if you liked the video, drop us a like Subscribe to the channel and we wanna hear from you guys When you were first starting out, what indicators did you use? Were you just going straight on candles? And we're coming with those advanced videos, so let us know some indicators that you'd like to see us work with Maybe we can show you guys how to better take advantage of those and we're looking forward to hearing from you We'll see you in the comments

[closing music]



Comments are closed.