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Trading binary options for cryptocurrencies represents a high potential for traders of any skill level to earn money. The cryptocurrency market now resembles Forex at the beginning of the 2000s, when even the most primitive trading strategiesbrought tangible income. Today we will look at what opportunities binary options provide in the context of cryptocurrency trading, and how you can make money on it.
The cryptocurrency market is still quite young, but trading volumes are growing exponentially. That is, the market is constantly replenished with new funds from outside, which spurs rapid growth. Active interest from investors and market hype creates many attractive trading opportunities that are certainly best not to be missed.
Binary options provide several undeniable advantages over buying cryptocurrencies on exchanges:
- Lack of commissions;
- Fixed risk ;
- High liquidity .
You can earn on the movement of the rate, but at the same time do not pay additional commissions of the exchange and trade simple contracts with a fixed payment. There is no need to fiddle with exchangers and risk storing a highly volatile asset, making money solely on rate fluctuations. All this greatly simplifies the calculation of risks and the trading process itself.
Bitcoin is the first and largest cryptocurrency in terms of capitalization. The main advantages of Bitcoin: its prevalence, developed infrastructure and support from the community. In terms of traditional (fiat) currencies, Bitcoin can be compared to the US dollar, which also has a strong impact on the overall market trend.
The global trend of Bitcoin has not changed for many years. At the moment, its rate has already reached $ 11,000. The simplest tactic for making money is entering corrections, with the expectation of further growth.
Naturally, you need to enter a trade not at the very peak of an upward movement, but after waiting for a good rollback. For this we will use Fibonacci levels . We stretch the grid relative to the last wave and wait for a rollback to 61.8%, after which we buy the Call option.
Litecoin is a fork (copy) of Bitcoin with faster transactions and an increased maximum of coins in circulation. Due to its early appearance, at the moment, the cryptocurrency is among the five most popular altcoins.
Due to the high volatility, gaps and unstable trends, it is almost impossible to predict the movement of Litecoin in the future of several minutes / seconds. Often, peaceful consolidation is replaced by a sharp decline, which is just as abruptly replaced by a sharp rise.
However, even a regular moving average (SMA) with a period of 50-100 will perform well. For trading we need intraday graph of a candlestick . The essence of the strategy is simple: as soon as the candlestick closes above the moving line, open the Call option. When the candlestick closes below the MA line, open the Put option. Expiration time is 5 minutes.
Ethereum cryptocurrency is a project of our compatriot Vitalik Buterin. A distinctive feature of altcoin is the extended use of the scripting language of transactions in order to automate contractual relations, the so-called “smart contracts”.
A smart contract is a hard-coded algorithm at the heart of the blockchain communication protocol that cannot be broken. On their basis, projects of varying complexity are already being created, from microcredit services to independent cryptocurrencies and crowdfunding projects.
Ethereum reacts very vividly to the foundation and, in general, any news regarding the future future of the project. So, the false news about the death of the founder of the project provoked a strong drop in the exchange rate. Vitalik hastened to issue a rebuttal by taking a photo with the number of the last generated block (proof that the photo was taken recently). After that, the rate returned to its previous values.
Given that cryptocurrencies are traded around the clock, seven days a week, and do not depend on the opening hours of centralized exchanges, the trading time does not really matter. Therefore, in order to always be aware of events, follow the official twitter of the project – Ethereum Project .
Trading tactics in this case requires attentiveness and high reaction speed. If the news is positive, the market’s response may follow immediately. The direction of the option should correspond to the sentiment of the news: positive – open Call, negative – Put. We choose the maximum possible expiration time, but not less than 1 hour.
Also, some of the strategies published earlier on our website are suitable for trading cryptocurrencies. For example, take a look at these TS based on chart patterns and candlestick patterns:
- Three candles
- Support and resistance levels
Binary options for cryptocurrencies are the most affordable and easy way to trade in the crypto market. Given that a binary contract has a predetermined potential profit and loss, your deposit will be protected from excessive cryptocurrency volatility. For trading, you can use any BO trading strategy you are already familiar with, without the need to radically change anything in it, or use one of the simple trading tactics.