A trend strategy uses technical indicators to its advantage to capture gains after analyzing the market momentum. This trading strategy assumes that the asset price will continue moving in the same direction. That means a trend strategy has provisions to allow the trader to “take profit or stop loss” if the market momentum changes direction. As a result, you may sell securities if prices begin to dip and buy when prices rise.
If you’re a trend trader, you may take a long position when the asset value is on the uptrend. This trend has higher swing lows, and the same can be said about its swing highs. But a short position may be ideal if the asset is on the downtrend. Usually, the downtrend has lower swing lows and swing highs.
Besides technical indicators, a trend trader uses trendlines and moving averages to identify the trend direction. Additionally, you will look at the swing highs and lows to analyze trade signals. Once you know what to use, trend trading can allow you to benefit from the uptrends and downtrends of securities.
How Trend Strategy Works
You can use trend strategy for short, intermediate, and long-term trading. Regardless of your trading term, you will use price action and technical tools to predict the trend direction. Also, you use both parameters to determine if the trend may shift.
When looking at the price action, you monitor the price momentum on a chart. When the price is on the uptrend, you will check if the price action stays above the highs and swing lows. This shows the price action is on an upward trajectory.
Yes, you can automate trend trading of cryptocurrency at Crypto.com. There are several ways to automate crypto trading to follow trend strategy. If you’re a user at Crypto.com, you can use the Auto mode that sets up the trading bot and fine-tunes it to utilize parameters to track market momentum.
The trading bot uses algorithms to execute trades automatically while following the predefined rules based on technical analysis. What’s more impressive, you can train the bots to follow trends using technical indicators like moving averages and relative strength index (RSI).
These technical indicators, alongside Bollinger bands, will detect the buy and sell signals to trade on your behalf. Therefore, Crypto.com bots can accept automation to use trend strategies when trading cryptocurrencies on your behalf.
Trend bots use algorithms to scrutinize vast market data to analyze relevant trends. Besides Crypto.com as a platform that allows the use of trend bots, Bitsgap also allows you to use such bots on its platform to trade.
However, you need to understand the risks associated with using trend bots. For starters, the trend bots rely on your initial input. Before setting up your trend bots, you must research the market and understand the potential risks.
Trend bots have risks and there are many reasons why bots may not work. It may help to diversify your investment to avoid relying on a single system.
Yes, there are possibilities of trend strategy being profitable on Crypto.com. Since this platform also has crypto assets that can take particular momentum, you can use a trend-following strategy to trade cryptos. You will identify an asset’s overall direction, analyze it, and buy or sell accordingly.
The Crypto.com platform has assets trending upwards or downwards, so you can capitalize on the trends. This strategy also has its risks. Therefore, it may help if you employ other strategies alongside the trend strategy to increase profits.
A trend bot can cost approximately $30 a month. Even though you may find free trend bots, you want to subscribe to a plan to rip the maximum benefits from the algorithms. But the prices vary across the board. A crypto trading bot like eToro starts at $10, although you can use it for free.
Coinrule is another contender that costs $30 a month. Some trend bots, such as CryptoHopper, will cost you $99 a month after the free trial.
As you buy a trend crypto bot, it’s crucial to do your due diligence because most bots are scams. For instance, one of the scammy bots going around is the 1k Daily Profit swindel. It gets hyped online but in reality, there are a lot of red flags showing up that you can use to identify other scams yourself: multiple websites, fake reviews, ridiculous promises, etc.
Trend strategy can benefit your crypto trading, especially with the help of a trend bot. But diversifying the strategies is key since one strategy exposes you to unexpected risks.
You can trade on Crypto.com and similar platforms with trend bots, but you must first research the market to learn the parameters for setting up your trend bot. And then, you’ll be prepared to trade crypto and other assets based on market trends.