Over the past few years cryptocurrency trading has become a gold mine that is attracting investors from all parts of the world. However, before you can make it big as a crypto investor, you need to know the fundamentals of cryptocurrency. One of the very important aspects of digital currency that is often overlooked by investors is crypto signals.
Fortunately, understanding crypto signals is very easy. If you’re curious about what crypto signals mean, this article highlights all you should know about it.
Let’s get down to it!
What are Crypto Signals?
Crypto Signals are a set of relevant instructions, suggestions, or ideas given to an individual by a professional cryptocurrency group. Basically, these instructions inform them what crypto to buy, the price to purchase the crypto at, the sell-targets, and most importantly, what price to set the stop loss level at. These crypto signals are endorsed trades that the professionals have researched and approved themselves. Therefore, they think that there is a high possibility of making a return when used by others.
As stated earlier, understanding crypto signals is very easy. A standard signal will generally contain the following information:
1. The cryptocurrency to buy – The signal will indicate the specific cryptocurrency you should buy, e.g. BTC, XRP, ETH, etc
2. The buy-in price – Another thing the signal will specify is the price you should aim to purchase the cryptocurrency at.
3. The sell-targets – This is the price you have to sell the cryptocurrency at if you want to earn a profit. The signal will also indicate this.
4. Stop losses – This is a mechanism that enables you to automatically exit your trade position to mitigate losses. It helps to reduce your loss if the trade goes against predictions.
Types of Crypto Signals
Here are some common categories of Crypto Signals:
1. Manual and Automated Crypto Signals
This categorisation is based on the method of signal generation. Manual crypto signals are developed by skilled traders and investing experts in the crypto world. There are some reputable names in the world of crypto that provide signals which are followed by numerous crypto enthusiasts and traders. There are different forms to transmit manual signals, such as SMS, email, or even social media.
On the other hand, automated crypto signals are generated by an already programmed computer software. This software identifies possible trading opportunities based on a set of coded parameters.
2. Paid and Free Crypto Signals
This categorisation is based on the price of the signal service or the provider. There are so many crypto trading signals that are for free, or with only a limited trial offer. These are commonly called free signals. Paid signals, on the other hand, are provided at a specific cost. It could be either a one-off price or periodic subscriptions.
3. Entry and Exit Crypto Signals
This categorisation is based on the trading activity that is suggested. Although it is volatile, cryptocurrencies are primarily trending assets that have some overextended moves. Because of this, some signal providers only offer traders entry signals, while others just offer exit signals. However, it is still common for some crypto signal providers to offer signals on distinct digital currencies like Bitcoin. So if you want to trade other currencies, you should pick a signal provider that offers service for that specific coin.
Exciting Read – Forex scams in Nigeria – Beware of these blacklisted brokers
How can trading signals help me in crypto trading?
Crypto trading signals can help traders to reach a level of flexibility and convenience that is necessary to get better trading results. Also, investors can use it to clear their minds and avoid analysis paralysis. Additionally, active traders can use the knowledge they get from signals to improve their trading activity. They can get better trading ideas from crypto signals.
Novices in the crypto world get a chance to use signals to make a profit from the onset since they learn everything about crypto trading and acquire better investment skills. Professional traders can use their knowledge of trading signals to increase their profit margins.
The main advantage of making use of crypto trading signals is that it offers you a special opportunity to learn about crypto trading and earn just like skilled players in the crypto market. As a beginner who follows the instructions of a professional crypto signal provider, you can make more profit while learning some good trading strategies.
Who generates trading signals?
Crypto trading signals can either be developed manually or automatically. Over the years, crypto experts have built up substantial expertise in calculating crypto price actions. Based on their vast knowledge, they can generate signals manually on any major cryptocurrency worth the investment.
For the automatic generation of signals, this method uses computer software that operates by scanning, tracking and analysing crypto price actions using coded algorithms.
How to read crypto trading signals
Crypto trading signals can come in numerous forms. However, all of them emphasize these basic instructions:
1. Buy/Sell
Trading signal provides you with instructions on how to buy and sell the stipulated asset. This instruction may be based on the current market price (CMP) or even highlight a pending order. The instructions concerning the CMP will give you suggestions on how to buy/sell crypto assets at only the dominating market price. Instructions concerning the pending order will give you a prediction on how to buy and sell cryptocurrency at a price that will be a big hit in the future.
2. Stop-Loss/Take-Profit
These trading signals aim to automatically close trade positions when a certain price is reached. In some cases, the signals are modified to reduce the risk and enhance profitability if the trade goes south. For instance, you may receive instructions to change the Stop-Loss to a breakeven level whenever the cryptocurrency’s price shifts in your favour.
How to get free crypto trading signals
Trading signals can either be free or paid. It all depends on the cost set up by the professional trading signal provider. While signal providers offer their signal services for free or with only a limited trial offer, others offer their services only at a specific cost. However, if you want to get free crypto trading signal services one good platform to use is Telegram.
The Telegram platform is a popular source of free trading signals. Although this platform seems just like a regular messaging service app, its features extend beyond messaging. Telegram’s online bots are one of its unique features.
Essentially, Telegram bots are already optimised to deal with users’ messages automatically. So the interaction between Telegram bots is just as simple as sending many command messages in different group environments. Hence, bots can administer crypto calls that allow users to automatically place crypto trades without using any crypto exchanges. You can make use of Telegram to place crypto trades with just a few clicks and the right settings.
Another great way you can get free crypto trading signals is via e-mail. If you are interested in generating extra profit using crypto trading but don’t have Telegram, use email. You can subscribe to different signal groups and receive free signals via email. However, the disadvantage of using this method is that you may miss a trading signal if you don’t check your inbox regularly.
Deciding what Crypto Signal group to join
So far, understanding crypto signals has been easy so this brings us to the question “how do you know which group to join?”. To answer the question we will be providing you with a list of features to look out for before joining any crypto signal group. Every good signal group should have these features (plus the signals themselves!):
- Notify you of updates
- Provide the latest news stories
- Provide technical analysis
- Automated Trading
1. Notifying you of updates
Any good crypto trading signal provider must be capable of giving you updates about any signal they’ve issued in the last. If you choose to follow a trading signal but don’t know how your crypto trade is performing, it’s to your detriment. Hence, good providers make sure that they publish regular updates on signals they’ve issued before. They do this even if they’ve reached their profit target or achieved their buy-in price. So you can rest assured that you will receive a notification if anything important happens.
2. Providing Technical Analysis
Another feature to watch out for is technical analysis. It is important to join a group that provides you with detailed technical analysis if you want to know why a specific signal is being issued.
TA, short for Technical analysis, is the use of historical trends to predict future crypto price movements. This tool helps signal providers to try to recognize profitable trades. So it is very important to consider this feature when considering the competence of a signal provider.
If the provider only posts well-thought-out, and easy-to-understand analysis, it’s a clear hint that they obviously know what they’re doing. However, if the TA analysis is ridiculous or is even non-existent, it can put the credibility of the signal provider.
3. Keeping group members updated with news stories
Good signal providers will also drop comments on any news stories that can impact any signals they’ve issued. They can motivate their group members to hold firm and unwavering despite any bad news, or they can advise them to sell. So a provider should be in a position to offer guidance to their members on how best to scale through any uncertainty.
4. Automated Trading
Automated trading is fast becoming a staple in cryptocurrency trading. It is common to see bots in the order book of any cryptocurrency. Basically, this is due to the numerous advantages that automation offers. The biggest benefit of using bots is their speed of execution. This is why when providers send out signals, they offer the option for their group members to follow the signal via the use of bots. The most popular bot people use for following crypto signals on Telegram is called Cornix.
Wrapping up
So far, you must have realised that understanding crypto signals is simple and straightforward. Basically, using crypto signals to trade offers you numerous advantages. You get to save time, earn more profit, and learn better trading strategies. However, the major work you have to do is finding a competent signal provider to help you out. If you are able to find one, the world of cryptocurrency becomes less complex to navigate.
As the best crypto exchange app in Nigeria, Bitmama offers a secure marketplace for crypto enthusiasts. Perform activities like crypto exchange, crypto staking, and creating virtual dollar or crypto cards for online payment. Get started today by downloading the Bitmama app on Android or iOS.
