How to trade in cryptocurrency range market?
Cryptocurrencies are highly volatile, and prices are constantly changing in this market. However, the crypto market is not always profitable. Sometimes prices go down for a very long period. Sometimes prices go up and down without any pattern. However, despite popular belief, the non-bullish market is profitable too. It is what professional traders and bots do. One of these very suitable markets for profitability is the Range market. However, you should know that each market has its own rules and the rules of the range market are different from other markets. Then, join us to see how you can earn money in the range market.
What is the range market?
The cryptocurrency market is always in trend. This trend is either ascending, descending, or neutral. As you know, neutrality or range is usually more common than uptrends. Markets are trending only more than thirty percent of the time and are neutral the rest of the time. It makes it difficult for traders to look for significant price changes. At other moments, markets tend to move within a range. But what does this mean?
A range market moves continuously between two prices or levels at a given point in time. Just as trend follow-up is possible in any time frame, Successful or neutral trades are visible in all time frames; From short five-minute charts to long-term or annual charts.
But unlike trend trades, in range trades or neutral trades, traders buy and sell both depending on the price position within the range.
Usually, when following a trend, traders align with the general direction of the movement and buy in the downtrend of an uptrend and sell at the beginning of the downtrend.
In contrast, the trading range strategy allows traders to do both at the same time; Because, by definition, the price changes between two specific levels and (at least in that time frame) neither goes up nor goes down too much.
First, the trader must identify the range in which he is trading. Usually, the price should return at least twice from a support level and out of the resistance range twice. Otherwise, the price is likely to create a higher price floor and a higher price peak in an uptrend or a lower price peak and a lower price floor in a downtrend.
Why is range trading difficult in the market for traders?
In technical analysis, you need to know the indicators well to make money. The range market also has several specific indicators. The Relative Strength Index (RSI), Stochastic, or Commodity Channel Index (CCI) can be used to confirm conditions such as oversupply and oversold that often accompany price fluctuations above or below the trading range. These indicators are necessary, but traders often have problems because they are difficult for humans to combine. However, the difficulty of trading in the range market is not due to not knowing the appropriate indicator! Every trader knows them. pr
It is difficult to identify a range of market
What makes trading difficult is the distinction between bullish and bearish markets. It is a critical point in the crypto market, with very high volatility. Naturally, the identification of any market is determined by the price hitting an area one or more times. However, sometimes small fluctuations make it difficult for anyone to identify a range market by drawing a resistance and support line.
The range market does not last forever
The key to success in a range market is not identifying support and resistance. Choosing the wrong stop loss can hurt your trade. All trading ranges end gradually, with prices breaking and going out, either up or down. In these cases, the trader can look for other trading markets or be accompanied by price failure and seek to take advantage of a new trend. However, are you fast enough to quickly see multiple positions without mistakes and implement the bullish or bearish market strategy in a fraction of a second? The answer is definitely no. No one has time to trade 24 hours a day, and in such a case, breaking the range market means that your trade will make you lose your money.
A trading bot is a good solution for the range market
A trading bot solves many of these problems for you. A trading bot is a software machine designed to analyze the cryptocurrency market. This bot is written so that it can correctly identify the range market. Because it is challenging to identify supports and resistances (due to the high volatility of cryptocurrencies), a trading bot does this with high-speed mathematical calculations. The possibility of error, in this case, is zero, and the success rate in the trade is higher.
You might think that a bot can never trade like a human. However, artificial intelligence trading bots are designed for this purpose. Because of intelligence, a person can check his trading results and improve them. Artificial intelligence is also a science that gives the same ability to computer grammar codes.
In addition, a trading bot has options to select and manage stop losses. Moving, sorting and merging, deleting, and adding stop-losses to an exchange like BitMEX is something that may take you a long time, but the trading bot does it in less than a few seconds.
An artificial intelligence trading bot that has traded several times in the market and experienced the breaking of the range market can more easily identify the end of the range market than humans. Range market identification can only be determined through price analysis and quick calculations.
Many newcomer investors leave the cryptocurrency market when the market goes down. However, the rang market is a perfect opportunity to earn money. It is enough to know the rules of this market well and increase your trading speed a little by using a trading bot. Then you will see that earning money from trading is not a difficult task. Success in trading depends only on knowledge and the use of tools!