Guest Post

Understanding Support and Resistance in Crypto Trading

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Cryptocurrencies have become increasingly popular in recent years, and more newcomers are gravitating towards this sector. If you’re one of these novices, you need to understand the basics of support and resistance, and how you can use it to trade in crypto. Of course, experienced traders too can use this valuable information to better their trades. 

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What Are Support and Resistance?

These are terms often used in forex trading but also apply in crypto trading. They denote graph areas where there is massive buying and selling. 

Support: This is the specific point on a trading chart where the price of crypto stops falling. 

Resistance: This is the specific point on a trading chart where the price of crypto stops rising. 

Support and resistance are technical indicators that can help crypto traders make informed trading decisions. 

Benefits of Trading Crypto with Support and Resistance 

Trading crypto with support and resistance has the following four benefits:

  1. Formulate a better trading strategy 

The cryptocurrency trading market is one of the most volatile. If you are new, you may suffer huge losses because of the market volatility, thus the need to have a strategic approach to trading. Levels of support and resistance can help you make a better trading strategy based on the logics of the crypto market. 

  1. Identify market trends 

It also helps to identify market trends to help traders determine if they are going to trade in crypto or not. 

  1. Provide entry and exit points 

When trading crypto, ideal entry and exit points can be identified using support and resistance. These levels help a trader enter the market on a positive note. 

  1. Risk management 

The two levels can also be used as risk management tools. Whilst top online brokers such as easyMarkets offer various risk management tools for crypto as well as other supported assets, support and resistance can be used to enhance risk management. For example, a trader may use the Stop Loss feature below the support level if they have opened a long position to avert losses in case there is a downward rally. 

Can TradingView Help?

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Popular chart provider TradingView is one of the best ways to find support and resistance. Anyone using easyMarkets can now enjoy the benefits of TradingView because the two are now integrated. TradingView offers customized charts for crypto traders to understand the markets better. It is just like using support and resistance, only that it has been personalized for your specific trading activities. It also has a social network where traders share their trading experiences. This is exciting to new crypto traders, for they can find new trading strategies from experienced traders. Social interaction helps traders to become more aware of the crypto market. 

Using an easyMarkets trading account is one of the best trading decisions that you can make if you are in the crypto market. The brokerage company is committed to helping traders improve their trading experiences, for example by adding native support for Bitcoin as a base currency to the platform. 

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Disclaimer : The opinion expressed here is not investment advice – it is provided for informational purposes only. It does not necessarily reflect the opinion of Coinpedia. Every investment and trading involves risk, so you should always perform your own research prior to making decisions. We do not recommend investing money you cannot afford to lose.

Coinpedia

Crypto Journalist and Editor of guest articles in CoinPedia. I am also handling Outreach & Partnerships Manager. Contact me: [email protected]

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