If you want to understand crypto trading, then it’s better to first get some basic knowledge about it. Understanding its basics is very important so that you can get a good start and also avoid losses. In today’s post, I will share some necessary and basic information about trading which will help you start with good trading.
First of all, you should understand which exchange is suitable for trading, in terms of security and trading fee/commission. Choosing the right exchange is very important and can help you make good moves in the trading field.
Then, it's also important to understand the mechanism of buying and selling. Who are buyers and sellers? Every person who wants to buy at any price is called a buyer or demand zone. Similarly, the person who wants to sell at any price is a seller or supply zone.
You must know about the demand and supply area which will help to know about where to buy and sell. If you see that the demand area is strong then it indicates bullish and when the supply zone is strong means that bears are more active.
When you start buying or selling, it's important to use orders correctly. For example, a limit order is when you choose your price as you want. A market order is when you want to buy or sell at the current market price. SL (stop loss) helps save you from loss — it gives you a border. OCO (One Cancels the Other) is a great order in the market where you can set SL and TP (take profit) together.
In trading, understanding candlestick patterns is also very important because they help you. There are some important candles that you must understand. First, understand the Doji candle, which shows trend reversal. Inverted hammer, if seen at support or resistance level, also shows trend reversal. One more important candle you must understand is the CISD candle, which helps you take entry.
What is a CISD candle? It can be red or green. This candle’s wick or body is bigger than the previous candle, and after it, if three red candles appear and then price closes again at the open level of the CISD candle, you can take a long position, and this works 80% of the time.
CISD BULLISH CANDLE EXAMPLE
CISD BEARISH CANDLE EXAMPLE
In the same way, for a short position, when the candle forms downward, and then three green candles appear and return to the CISD candle’s open, then you can open a short position. You must understand this candle, as it can give you guaranteed profit. I have shown examples of it in images.
Another important thing is to understand the trend — whether it is bullish or bearish. Never trade against the trend because it leads to 100% loss. There is a very simple way to understand the trend.
For this, you can use the EMA 200 indicator. If candles are above EMA 200, then the market is bullish. If below EMA 200, then it’s bearish. And if candles are both above and below EMA 200, then it’s a sideways market.
In the same way, there are some more important indicators you must understand: RSI, Volume, MACD, Bollinger Band, and EMA 200 — all are very necessary to learn.
EMA 200 BULLISH
EMA 200 BEARISH
Lastly, timeframe is also very important for trading. Always try to find the trend using a higher timeframe and then execute your trade on a lower timeframe. This way, your chances of making profit are higher.
These are some important pieces of information about trading which are definitely worth understanding. I hope you have understood it well.
I hope you find this post interesting and I hope you will like it. If you like the post, please leave feedback in the comments section so that the next one will be even better. Thank you for sticking with me until the end.
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REMEMBER: We should prepare for the unexpected and hope for the best. Life may not be easy, but you must do your best and leave the rest to God.
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