Determining entry and exit points is one of the most important elements in cryptocurrency trading. It depends on technical analysis and smart risk management. Here is a simple explanation:
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1. Buying Points:
a) Technical analysis:
Support:
Buy when the price approaches a strong support level (an area where the price stops falling and bounces back up).
Example: If the price bounces off a certain level several times, this is considered support.
Artistic models:
Buy when bullish patterns such as a double bottom or an inverted head and shoulders are completed.
Relative Strength Index (RSI):
If the RSI is below 30, it indicates an oversold area, and there may be a price reversal upwards.
b) News and events:
Buy ahead of expected positive news, such as a new partnership, technology updates, or regulatory decisions in favor of the currency.
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2. Selling Points:
a) Technical analysis:
Resistance:
Sell when the price approaches a strong resistance level (an area where the price stops rising and bounces back down).
Artistic models:
Sell when bearish patterns such as a double top or head & shoulders are completed.
Relative Strength Index (RSI):
If the RSI is above 70, it indicates an overbought area, and there may be a correction in the price.
b) Making profits:
Set a certain percentage to take profit (e.g. 10%-20%), and sell when you hit that percentage.
Use Trailing Stop orders to lock in profits in case the price continues to rise.
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3. Additional tips:
Using Moving Averages (MA):
Buy when the price crosses above the moving average (bullish).
Sell when the price crosses below the moving average (bearish).
Trading volume:
Increasing trading volume with rising price is a positive signal to enter.
Low volume with bearish signal to exit.
Risk management:
Do not invest more than you can afford to lose.
Use Stop Loss orders to avoid large losses.
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Helpful tools:
TradingView for chart analysis.
Automated trading orders such as:
Stop-Limit to set the buy and sell price.
Take-Profit to automatically take profits.
By following these methods, you will be able to effectively determine entry and exit points based on technical analysis and market conditions.