What are crypto alerts and how do you trade them?
Crypto alerts help you identify the right time to buy or sell cryptocurrencies. Here, we explain what crypto alerts are, and give some examples of crypto alerts for buying and selling.
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What are crypto alerts?
Crypto alerts are a type of trading alert that notify you of price action, technical conditions or economic results which might affect the value of a cryptocurrency. When you trade with us, you get access to three types of crypto alerts:
- Price alerts notify you when a crypto market moves by a certain percentage or as points of movement
- Technical indicator alerts notify you of when the parameters of technical indicators are met – such as the relative strength index (RSI) or the stochastic oscillator
- Economic result alerts notify you of upcoming economic events which can make the crypto markets move, such as central bank meetings and interest rate announcements
Regulations mean that only professional traders can trade crypto derivatives like spread bets or CFDs. But, retail traders can still buy and sell the underlying cryptocurrency directly from a crypto exchange – as long as they have an exchange account and digital wallet.
Crypto market buy alerts
Crypto buy alerts notify you to open a long position or close a short position on a crypto market. Buy alerts will be generated if the underlying coin is currently experiencing bullish momentum – meaning that its value is increasing, or could be about to increase.
Crypto market sell alerts
Crypto sell alerts notify you to close a long position or open a short position on a crypto market. Crypto sell alerts will be generated if a coin’s momentum is turning bearish – meaning that its value is decreasing, or could be about to decrease.
Examples of crypto alerts
Examples of a buy alert could be if bitcoin’s price broke above a historical level of resistance, which could prompt you to open a long position or close a short position. Equally, you could create a trading alert for the parameters of a technical indictor, such as if the RSI is over 60 for a 14-day period.
Examples of a crypto market sell alert could include if the price of bitcoin fell below a support level, in which case you might decide that the overall trend is turning bearish – and either close your long position or open a short position.
Alternatively, let’s suppose that the price of litecoin crossed under the middle band of the Bollinger bands indicator. You might want to sell your long position or open a short trade, on the assumption that the price will continue to fall towards the lower band of the channel.
What to bear in mind before trading on crypto alerts
Before trading on crypto alerts, you’ll need a professional trading account – because FCA regulations mean that only professional traders can speculate on crypto derivatives like spread bets and CFDs.
After that, you’ll need to be aware that crypto alerts should not necessarily be taken as confirmation of a market movement. It is always better to use an alert as the foundation of a trade, and then to carry out your own research to see if there is opportunity to realise a profit.
As there is no guarantee that an alert will result in a market movement, it is important to carry out your own technical and fundamental analysis before taking a position based on a crypto trading alert.
1 As awarded at the ADVFN International Financial Awards and Professional Trader Awards 2019.
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