There’s a lot that goes into successfully trading cryptocurrency – plenty of terms you’ll come across and have to understand. Crypto trading signals is a term that is sure to pop up a lot. Here’s everything you need to know about crypto signals.
What are Crypto Trading Signals?
Crypto trading signals are alerts sent by a signal provider to an individual that tells them which cryptocurrency they should buy, the buy-in price, the sell-targets, and the stop losses. The signals are ideas researched by the provider that the provider feels are the right moves to make to get a return on investment.
Here’s a closer look at the information contained in signals;
- Cryptocurrency – the cryptocurrency the user should buy, such as bitcoin or litecoin
- Buy-in price – how much the user should buy their cryptocurrency for
- Sell-targets – how much to sell the cryptocurrency for
- Stop losses – a mechanism designed to mitigate losses if the signal is wrong
The buy-in price in a signal will be a range rather than an absolute value. The signal could suggest paying between $850 – $1,000 for bitcoin instead of saying pay $900 for bitcoin, for example. Offering a range like this gives the trader some leeway to choose the right price to get a profit. If all goes well, you’ll make a pretty little profit from your trade.
Crypto trading signals are made for specific cryptocurrency exchanges. That means you need an account with the exchange to get signals for that cryptocurrency. Most signal providers cater to the biggest exchanges, including BitMex, Binance, and Coinbase. BitMex and Binance are recommended for beginners.
The Pros and Cons of Crypto Trading Signals
The main advantage of using crypto trading signals is the profit potential they have. You might not see stories of people becoming instant millionaires through these exchanges, but it is an excellent way to get a lot of extra money in your bank account. Keep in mind that you’ll only ever be as profitable as your provider, though, which is why you need to put careful thought and consideration into it.
- Don’t have to do any research
One problem with trading crypto is you need to put time and effort into it, like playing the stock exchange. Using a signal provider means you don’t have to do any of that. The provider does all the research for you and offers their advice based on their findings. You’ll be doing well as long as the money you make from being in the trading group is more than you paid to be in there.
- Excellent learning opportunity for traders
They say that if you want to be good at something, you need to learn from the masters. Using crypto trading signals is a great way to learn from people who are great at finding profitable trades. Providers often include detailed analysis of what they did to reach their conclusions, so you can read through those reports and learn from them yourself. You’ll steadily become a trading master by sitting under their learning tree.
- Potential for Scams
Not all signal providers are created equal. Ther is the chance that you might fall into a scam by choosing a provider that isn’t as reputable as they seem. Many people run scam providers as a way to get easy money out of people. Only use a trusted signal provider.
- It takes time to get started
Everyone is always looking for the latest “get rich quick” scheme but unfortunately making money always takes time and effort. How much work you’ll have to put into getting started trading crypto can seem daunting. All the guides in the world can only prepare you for what lies ahead; you’ll still have to do the heavy lifting by yourself.
- Potential for loss
Any investment comes with the potential for loss. There’s always that chance that you won’t make a return on investment. Perhaps the crypto trading signals aren’t as good as they seem, or you don’t fully know what you’re doing, and it goes wrong. There’s always the potential to lose money as well as make it with crypto trading signals.
Crypto trading signals have become a big part of the cryptocurrency ecosystem. These signals offer a lot of potential, such as profit potential, saving time and effort, and helping people learn how to trade effectively. They do have their downsides as well, so be sure to approach them with an open mind. So long as you find a decent crypto trading signal provider, you stand a chance to make some profit. Just don’t go in expecting to get rich instantly. See getting even $1,000 more in your bank account each month as a success, because it is.
Video – Cryptocurrencies
Interesting related article: “What is Bitcoin?“