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 890…142626. 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]

Leave a Reply

Your email address will not be published. Required fields are marked *