Crypto Trading Signal Services: What They Are and How to Use Them

Line chart showing buy and sell data.

Do you have enough time to trade? You may know enough about trading bitcoin and altcoins to see the profit potential. However, the most valuable commodity isn’t a hot altcoin; it’s time. Even though clicking a buy or sell button takes seconds, the research and analysis can take hours. Even if you use a resource like Bitcoin Market Journal to get a deep knowledge of the crypto-verse, knowing when to pull the trigger on a trade can be tough.

Enter trading signal services. The process is simple. You get the signal, and you make the trade. The prep work and research have already been done for you. What goes into the research behind crypto trading signals? Can the signals be trusted? A basic understanding of how they work will help you decide if they are right for you.

What Are Crypto Trading Signal Services?

Crypto trading signal services use fundamental and technical analysis to make decisions as to when to buy or sell a digital asset.

Movements in the trading markets are never random. Significant price action is driven by two factors: fundamental developments and technical indicators.

Fundamental data includes world events that make people buy or sell a digital asset. For example, when a big name institutional investor takes an interest in bitcoin, the markets tend to interpret this as a good thing, and the price of BTC goes up.

Technical analysis involves interpreting information from charts. Investors have a tendency to buy and sell when prices reach certain levels, and these decisions have been verified by decades of data.

How to Use Crypto Trading Signal Services

Crypto trading signal services do not trade for you. They simply tell you when to buy or sell and which digital asset to trade. It’s up to you to decide how much you invest.

Take Profits and Stop Losses

To lock in profits and limit losses, a crypto trading signal service will also help you get out of a trade using limit orders. A “take profit” level is the point at which you will close out the trade to secure a profit, and your “stop loss” closes the trade to prevent further losses.

For example, a signal may tell you to buy BTC at $10,400. The take profit (TP) may be $11,450, and the stop loss (SL) could be $9,700. If the price reaches $11,450, your TP nets you $1,050 for every bitcoin you invest, or 10.1 percent, and if the price drops to $9,700, your SL limits your loss to  $700, or 6.7 percent.

How to Get More Winning Trades With Signals

To increase your chances of winning with crypto trading signal services, subscribe to more than one signal.

  1. Choose at least one that leans more toward fundamental analysis and one that depends more on technical analysis.
  2. Choose others as you like, basing your choices on their performance histories.
  3. Don’t trade unless at least two signals from either side of the fundamental-technical spectrum agree.

Granted, this means you may have to wait a while between trades, but the discipline is likely to pay off in the long run.

Are Trading Signals for You?

Signals can be a valuable tool to help control a portion of your portfolio. A signal also provides an analytical perspective that can powerfully support, or help adjust, your own trading strategy.  Subscribe to the Bitcoin Market Journal newsletter to learn more about the ebbs and flows of the altcoin world, so you can have more winning trades.

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