The crypto markets in the past few months have seen a dramatic change in the trend of the crypto markets. After getting hammered for all of 2018, Bitcoin is up more than 200% this year, and some altcoins are up as much as 500% this year. The best crypto trading strategies this year have all been long strategies, unlike last year where short selling strategies were the most profitable.
We have gotten a lot of questions to breakdown the setups and strategies we use to trade cryptos. Today we will talk about the best crypto trading strategies for the 2019 bull market, where most cryptos are in a strong uptrend.
Swing Trading Strategies
As an active crypto trader, I tend to prefer swing trading to day trading. Crypto markets are 24/7, and often the moves I am anticipating will take multiple days to develop, and often happen overnight. In order to make sure I don’t miss the setup, I will lean towards swing trading strategies so I can get in for the bigger picture move. Here are my favorite swing trading strategies I’ve been using this year:
A flag breakout is simply a break over resistance level, followed by a period of consolidation in a crypto. After a strong move upwards, cryptos will often trade sideways and consolidate. The runup is referred to as the flag pole, and the sideways price action is the flag. Ideally, the flag is taking place in the higher part of the range of the recent move upward and is flagging on low volume compared to the runup. It is one of the best crypto trading strategies for capturing short term momentum in a coin. Here is an example of a flag breakout trade we took in Binance Coin recently:
Flat Top Break Outs
This setup has been all over the place this year. A flat top breakout is a pattern where a crypto tests a resistance level multiple times before breaking throughout it on high relative volume. A great example of this setup was NEO recently:
You can see how we had about 4 tests of that $14 resistance area before we broke it. Once we broke it, we saw a monster $6 rip (we traded NEO recently in our chatroom) . This is one of the most powerful patterns for trading cryptocurrencies. Cryptos get their power from periods of consolidations and bases. Many crypto traders make the mistake of trying to buy a breakout that hasn’t had a long enough period of consolidation to make it trustworthy. Ideally flat top breakouts have at least 2 tests of the resistance level before the breakout, although it can sometimes take more as you can see above. The more tests, the more powerful the move the crypto will make when it breaks out.
Day Trading Strategies
Cryptos during periods of volatility can be great for day trading. Some of the best cryptocurrencies for day trading can make 5%-10% moves in just a few hours. Sometimes I will take a day trade so I don’t have to worry about holding a position overnight and dealing with that risk. We recommend using the 15-minute and hourly time frames for day trading cryptocurrencies. Here are some of my favorite crypto trading strategies for day trading:
Intraday Flag Breakouts
Flag breakouts can be just powerful on an intraday timeframe as they can on the daily time frame. The most powerful patterns are when you align a swing trading setup with a day trading setup. That is exactly what happened with NEO recently:
The flat top breakout combined with the hourly flag breakout lead to this monster move. One of the best ways to increase the probability of a flag setup working is to use it in conjunction with the 9 EMA (exponential moving average). Once the 9 EMA catches up to the flag and the crypto starts to curl, that’s when you know the crypto is ready to make a big move upwards.
9 EMA Pullback
Cryptos in strong uptrends intraday will often trend with 9 EMA for long periods of time. Bitcoin recently is a great example of that:
Once Bitcoin broke out last week, it started trending on it’s 9 EMA for about 3 days straight on the 15-minute time frames. It is common to see cryptos do this when they are in periods of strong trends. The strategy is very simple: Buy the dip after the crypto holds its push into 9 EMA. Sell some of your position into strength as it starts to extend away from the moving average.
The crypto markets are finally seeing momentum and trend after months of a choppy, range-bound market. There are amazing opportunities in the market every week. If you are interested in joining the biggest community of crypto traders, check out our trading community Cryptostreet.