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Cryptocurrency Trading Signals, How to Choose and to Use Them

  • Andrew Strogoff

    Cryptocurrency trading signals, their features, how to choose them

Cryptocurrency Trading Signals, How to Choose and to Use Them
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Novice cryptocurrency traders have to learn many things including trading strategies, analysis types, trading psychology etc. This is not an easy way to do. Moreover, this knowledge and those skills do not guarantee that a trader will succeed.

Some investors try to start earning even without knowledge. They find cryptocurrency trading signals and follow them hoping that those alerts will give them instant and constant profit. This article is related to crypto trading signals and their features. We are going to cover several aspects including the advantages and disadvantages of free and premium signals.

Types of cryptocurrency trading signals

Before we start to classify trading signals, we would like to pay attention to their nature. There is nothing mysterious about this phenomenon as many newcomers thing. Cryptocurrency trading signals are the result of traders or machine analysis.

How do they appear? Let’s suppose a trader has conducted his own analysis and realized that BTC/USD is going to rise in the next couple of days. He issues this signal to the community or sells it to his or her subscribers.

As for machine signals, they are coming from automatic trading systems. Those algorithms forecast future price fluctuations.

Let’s get down to free and premium signals. The first group involves fees meaning traders have to pay some amount in order to receive signals. There are several providers currently and traders can choose one of them or even a couple. Everything depends on the fee that one has to pay to get access to the signals.

Some investors (especially newcomers) think that premium signals are a kind of trading Grail and they will be useful in all market situations. Those traders think that they pay for services and will receive high-quality signals. However, the truth is that those premium services cannot guarantee 100 percent results in all situations. Why?

The main reason is that they are provided by humans and as we know, “errare humanum est.” No one can predict markets in all situations and without errors. Moreover, there are many scam signal projects that promise to provide iron-clad results for their subscribers.

We recommend traders learning everything about markets and price fluctuations but if you want to use those signals, we can give some advice on how to choose them.

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The first sign of a good and quality service is an open chat group where users can discuss signals and the beginners are able to see whether they are worth their attention.

Another way to choose such products is to test them on demo. Some providers offer trial periods allowing users to find out if their system is really working and is profitable.

The next thing to pay attention to is testimonials from those who have already used this or that service. However, you need to understand that some providers spend a huge amount of money to promote their products and they do their best to “buy” their reputation. They purchase first places in different ratings and pay bloggers to write positive articles about them.

Free cryptocurrency trading signals are also provided and you can find them easily on different websites and social medias. However, they have even lower quality than premium ones. The most important thing you need to understand is that nobody is in charge of those services. They have no obligations towards their users and make even more mistakes.

Where to find cryptocurrency trading signals

Those who want to use such opportunities are frustrated sometimes as they don’t know where to find signals. We are not going to provide you with websites and social media groups here, but we are going to prompt how to look for them.

The first place to find those alerts is special websites issuing trading signals to their subscribers. They are both premium and free. You can also look through some closed communities. However, they are mostly premium meaning you will have to pay for membership.

There are also several forums where you can find entry points. They are free to enter and to look through. Sometimes, traders share their opinions there and those who look for crypto trading signals may find some interesting ideas.

Another way to get help in trading is to use professional analysis services. They can be found on different special websites.

Finally, you can use special software and bots in order to improve your trading results. Those bots and other algorithms gather information from different sources and provide users with useful data.

Telegram and crypto trading signals

This is a rather new source of crypto trading signals. There are several Telegram groups providing entry points to subscribers. Special bots allow traders to receive signals. Subscribers may use them for free, but there are also some premium bots.

The good news here is that there are many bots in Telegram. The bad is that only a few of them are worth your attention. We are going to give some recommendations on how to choose a Telegram bot or signal group:

  1. Before you enter the group, pay attention to the source, where you have found information about it. This website should be trustworthy.

  2. The next step is inner channel analysis. Pay attention at bot’s activity, the number of subscribers and their behavior.

  3. Look at the number of subscribers as compared to the number of views. If those figures are increased artificially, the number of views will be significantly lower than the total number of subscribers.

  4. Another important criterion to pay attention to is whether the team of the project makes reports after they issue signals. Professional signal providers issue such reports so that subscribers can understand whether alerts work or not.

  5. Finally, pay attention to the possibility to contact providers.

The main advantage of Telegram signals is that they are issued frequently and you can find alerts for different currency pairs.

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Cryptocurrency pump trading signals

This is another type of crypto signals. Pump strategy is known for its risks. However, profits also may be significant and some traders look for crypto pumps in order to significantly increase their profits.

What is pump and how to find it? This is an artificial price growth of any coin. Currency is pumped in order to attract other traders’ attention to it. The more coin is in demand, the higher its price will be. Pump&Dump requires high trading volumes and is often organized by a group of traders.

Pump is considered a scam, however, there are different points of view. Let’s see how traders organize it. Pump has two main stages – informational attack and exchange activities. Pumpers release news on the coin they want to pump in the future.

That news looks like insider information and includes recommendations on which currency to buy and when.

An informational attack is done via social media and messengers like Telegram. The main idea of such activities is to attract attention to the coin and to trigger demand growth. When investors interest is high, the price goes up.

In order to support the coin, pumpers make a kind of “wall” preventing cryptocurrency from declining. When targets are reached, pump traders start to dump the price meaning they sell the coin and earn money. As for ordinary investors, they are to get rid of their assets in a very fast manner. Otherwise, they risk losing their money.

Pump&Dump strategies may have several stages. When the price goes down, pumpers may start to buy the coin and support it. This will be another wave. Once targets are reached, pump traders sell crypto again. However, everything depends here on other players’ behavior. If they recognize a pump, they can leave the coin.

How to protect yourself from pump signals

As we have previously mentioned, pump signals may result in huge profits, but risks to lose significant funds are high as well. We are going to provide you with a brief guide on how to determine those pump&dump signals and how to avoid them.

Attention and caution are the keys. The cryptocurrency market is “young” and may suffer from speculative activities. The liquidity is low, which allows pumpers to conduct their activities. The main features of the pump are the following:

  1. This strategy is often used for cheap and low liquidity cons. It is almost impossible to pump and dump Bitcoin due to high volumes.

  2. Pay attention to different exchanges. If the price of the coin remains almost unchanged on other trading places, the risks of a pump are higher.

  3. Pump can be detected when you read news about this or that coin. If one group promotes crypto, this is one of the features of a future pump.

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How to read cryptocurrency trading signals

We have described already types of signals that can be used in crypto trading and warned readers about pump&dump. It is time to find out, how to read crypto signals properly.

Typical trading signal in the cryptocurrency industry has four keywords – Buy, Sell, Term, Link.

Buy means the price at which you purchase the coin. This is the first part of every signal, which is based on analysis. Sell is the exit point, meaning the level at which it is better to get read of the coin.

Term is an approximate term of reaching the target. As for the link, it connects with exchange and coin.

Below we offer some recommendations that will help traders to read signals and how to react to them properly.

  1. You need to see the situation on the chart. It is recommended to avoid buying a coin if its growth is less than five percent.

  2. It is better to avoid buying a coin if its growth surpasses 15 percent. This recommendation is less important than the first one as altcoins may show huge uptrends.

  3. Go through different social media in order to find signals from experts in the crypto market.

  4. Finally, it is recommended to check coins rate at coinmarketcap. Higher ranked coins are better to trade as they have higher liquidity. They are also better protected from pump&dump due to higher volumes.

Should novice traders and investors use cryptocurrency trading signals

Before we place the full stop in this article, we are going to give some more advice for beginner traders. Many beginners want to start their careers using trading signals. However, we advise learning more about trading first.

Why is it important to get knowledge? If you want to do trading or investing professionally, you need to learn about the crypto market and coins’ price fluctuations first. You can use trading signals, but it is important for you to understand what is going on before taking any decision.

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Top 10 Blockchain ETFs to Buy in 2019

  • Alex Morris

    Are top Blockchain ETFs simply tech stocks in expensive clothes? Find out whether you should invest in Blockchain ETFs if you are hesitant to buy Bitcoin

Top 10 Blockchain ETFs to Buy in 2019
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Why should investors buy top Blockchain ETFs?

Blockchain has become one of the major buzzwords in the tech space over the recent years, and it comes as no surprise that many want to capitalize on the revolutionary technology. That prompted the appearance of Blockchain ETFs where old meets new.

ETFs can be bought and sold in the form of stocks. While cryptocurrencies are generally deemed to be extremely risky, Blockchain ETFs that are comprised of the most established stocks on the market are considered to be a much safer choice. U.Today has come up with the list of top 10 Blockchain-oriented ETFs to invest in 2019.    

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BLCN

BLCN invests in stocks of the companies that are dealing with Blockchain. The ETF has more than 60 stocks. The advisory board of BLCN consists of crypto influencers who decide what stocks they should invest in.

Yahoo! Finance

Despite a bumpy start, Eric Ervin, the CEO of BLCN, is not deterred by disappointing numbers, taking a long view into the future. He believes that the technology is still too nascent, and we are dealing with a long-term investment.

BCNA

Reality Shares has yet another Blockchain ETF, and its focus is placed on China, the second largest stock market in the world. Ervin claims that China is betting big on the DLT technology — it has almost three times the amount of patents the US has. Not surprisingly, Alibaba is their main holding, but the fund also has exposure to China’s A-Shares — before they invest in a particular stock, they assess the number of Blockchain-related patents as well as the degree of innovativeness. Eventually, they only select the companies with the highest score.

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BLOK

Amplify’s ETF was launched simultaneously with Reality Shares in mid-January of 2018. BLOK also intentionally excludes the words ‘Bitcoin’ and ‘Blockchain’ from its full name. Prior to that, the SEC issued a warning after a lot of stocks shoehorned these trendy words despite not dealing with crypto at all (case in point: Riot Blockchain (RIOT), which immediately saw its stocks skyrocketing).    

BLOK owns the stocks of IBM, NASDAQ, Overstock and other behemoths that are keen on the Blockchain technology.     

Yahoo! Finance

Notably, there is one key difference between BLOK and BLCN — Amplify is an actively managed ETF.

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BKC

Back in May, BKC joined the crowded Blockchain ETF space. Brian Kelly, a Bitcoin permabull and a constant CNBC contributor, spearheads the fund. The holdings with the highest weighting in the fund include Overstock.com, GMO Internet and Global Unichip. Kelly states that BKC is a top-of-the-mind option for those who would like to invest in cryptocurrencies without dealing with enormous price swings and security issues. Overall, BKC holds the stocks of 32 companies.

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KOIN

The fund utilizes artificial intelligence in order to discover new Blockchain stocks. It specifically targets stocks with related keywords.   

Yahoo! Finance

Since the list of KOIN’s holdings includes many big-name companies in the likes of Microsoft and Visa, it is definitely a safe bet for investors, but the predominance of conventional stocks makes it hard to make sizeable gains. Investing in companies with low market capitalization is considered to be a huge risk for such funds.

LEGR

First Trust Indxx has three groups of Blockchain stocks:

  1. Stocks of companies that have already come up with their own Blockchain-related products (for instance, IBM).   

  2. Those companies that are already utilizing the Blockchain technology, but they use technology that has been developed by other companies.

  3. The last group of stocks is attributed to those companies that are only dipping their toes in Blockchain.

Such a diverse approach to investment is considered to be one of the main advantages of LEGR. However, the fact that the fund rebalances its holdings to other stocks only twice a year makes it less attractive than other options.

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LDGR

A Blockchain ETF is supposed to be more than tech stocks in expensive clothes. LDGR actually offers to invest in companies that have a proven record of investing in Blockchain-related stocks. Just like in the case with KOIN, it cherry-picks the companies with the help of AI.

Yahoo! Finance

According to the company’s CEO Lewis Bateman, they are exclusively focusing on investing in stocks of those companies that already have Blockchain-related patents. Mastercard Inc. and Royal Bank are among their top holdings. It hasn’t been an easy run for LDGR, but the same can be attributed to practically any other ETF that was launched after January. However, Bateman claims that this LDGR stands out among the rest of earlier launched funds because of its robust buildout.    

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LINK

LINK is the first entry on our list that actually features the word ‘Blockchain’. In its portfolio, this actively managed fund features stocks of 31 global companies that are dealing with the nascent technology. Raj Lala, the CEO of Evolve ETFs, is a firm believer in the disruptive potential of the DLT, and the fund is an opportunity to capitalize on that.         

Yahoo! Finance

Things didn’t go particularly smooth for this fund since its stocks have shed more than 20 percent of their value since LINK’s inception in May. Hut 8 Mining Corp is at the top of its holdings list with a 10.8 percent share.

HBLK

Harvest Portfolios was responsible for launching the country’s first Bitcoin ETF, HBLK, which focuses both on large-scale and small-scale Blockchain businesses. Notably, this became the very first Canadian ETF that got the green light from regulators. Back in February, the Ontario Securities Commission approved the ETF.     

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The main purpose of this ETF is to become an entry point for investors who are seeking access to the burgeoning tech sector. Subsequently, they buy the stocks of already established companies.   

BKCH

In June 2018, the Horizons fund was listed on the Toronto Stock Exchange (yet another Canadian Blockchain ETF on our list). In 2018, Blockchain ETFs became the salient feature of the country’s biggest stock exchange.  

Yahoo! Finance

The fund’s chief executive officer Steve Hawkins claims that he is not sure how big the adoption of the Blockchain technology is going to be, but the investments are necessary for building out the technology. BKCH, according to Hawkins, is focusing on well-established companies (the holdings of this ETF include the stocks of Nvidia Corp. and Digital Realty Trust Inc.).

What differs Blockchain ETFs from Bitcoin ETFs?

Since there is a lot of confusion, it is worth pointing out that no aforementioned Blockchain stocks are dealing directly with cryptocurrencies. The Winklevoss brothers were on track to launch their own Bitcoin ETF, but they didn’t get the approval from the SEC. Bitcoin ETFs are seen as a catalyst for the next bull market, but SEC commissioner Hester Peirce (better known as ‘Crypto mom’), claims that it could take years for the much-anticipated approval.  

Hopefully, this article helped you pick up the best Blockchain ETF! Stay tuned with U.Today!   

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