How to use price targeting in the cryptocurrency trading strategy
As a cryptocurrency trader, you are constantly looking for ways to obtain an advantage on the market. A popular approach is the use of price targeting, which provides for the identification of the key and resistance key levels that can help guide your trading decisions. In this article, we will explore how to use price targeting in your cryptocurrency trading strategy.
What is the price price?
Price targeting is a technical analysis method that involves identifying specific price levels, such as ups and downs, minimal and breakouts, and use them to determine the subsequent level of movement for a particular activity. By setting the target prices based on historical data or market feeling, you can create a framework for your trading decisions.
Advantages of price targeting in cryptocurrency trading
Price targeting offers several advantages, including:
- Increase in trust : with the targeting of price, you can feel more secure that your operations will perform as expected.
- Reduced risk : by identifying the key levels of support and resistance, it is possible to reduce the probability of losing money due to unexpected price movements.
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How to use price targeting in the cryptocurrency trading strategy
Here are some steps to follow when using price targeting in the cryptocurrency trading strategy:
- Choose a time frame
: select a specific period of time, such as 4 -hour graphics, 1 days or weekly, to analyze and target levels.
- Identify the key levels of support and resistance : look for historical data showing the price level in which the asset has previously reversed the management. These are known as levels of support and resistance.
- Set the Target prices: based on the analysis, set the target prices based on the level of support or resistance you have identified. For example, if you are targeting a support level of $ 50, it means that you want to buy at $ 49.99 and sell to $ 50.99.
- Use technical indicators : use technical indicators such as mobile media, RSI (relative resistance index) and Bollinger bands to confirm target prices.
- RESTS YOUR STRATEGY : As the market changes, regulates Target prices accordingly.
Examples of price targeting in cryptocurrency trading
Here are some examples of price targeting in cryptocurrency trading:
- Bitcoin (BTC) : Identify the support levels about $ 8,000 and resistance levels around $ 10,500.
- Ethereum (ETH) : Identify the resistance levels about $ 400 and support levels around $ 350.
- Litecoin (LTC) : Identify support levels around $ 60 and resistance levels around $ 80.
Common errors to avoid
While price targeting can be a powerful tool in cryptocurrency trading, there are some common errors to avoid:
- Over-Tarting : Target price setting too high or low can lead to incorrect operations.
- ignore the feeling of the market : Do not consider the feeling and emotions of the market when setting target prices can lead to a low decision -making process.
- Do not monitor the graph : Do not regularly check the graph for new levels of support and resistance can lead to missed opportunities.
Conclusion
Price targeting is a precious tool in cryptocurrency trading that can help you earn trust, reduce risk and improve commercial efficiency. By following these steps and avoiding common errors, you can use price targeting to make more informed decisions and achieve your trading goals. Remember to remain flexible and adapt to the changing market conditions when new levels of support and resistance emerge.