Signal Strategies FAQ
Too Long Don’t Read(TLDR)
If you have time to actively trade and the skills to make fast decisions and maximise gains using leverage > Short Term Scalping strategies can pay off quickly.
If you are more novice or don’t have much time to invest into your trading then focus on the (usually) slower moving Mid Term Swing Trading strategies.
What do the different strategy codes mean?
Different strategy codes are given based on Trade Setups. Some strategies are suitable for Quick Short Term Trades (1-4 Days Holding) & some of the other strategies are suitable for Mid to Long Term HOLD (1-4 Weeks typically)
Typically short strategy codes are used for ‘fast trades’ and longer codes for ‘slower trades’
Different strategies come with different entry logic & profit potential. We explain each strategy in a separate strategy guide.
Can I trade all the strategies?
The answer to that depends on your capital levels, ability to commit time & your knowledge of trading. If you are a Pro or intermediate Trader with sufficient knowledge of how Trading works, you may choose a particular set of strategies & create your own logic to trade those signals.
If you are completely new to trading with not much knowledge, then we recommend you focus on 1-2 strategies & try to learn and master them before adding more.
The biggest thing to keep in mind while choosing the strategy is whether you want to go for Short Term Scalping Strategies (fast trades) or Mid Term Swing Strategies (slow trades). If you are a full time Active Trader, you may choose Short Term Scalping Strategies. If you are someone who has very little time to trade, its best to focus on Mid Term Swing Trading Strategies. If you can handle both, you can try both too!
Try to focus on a few strategies and learn their typical behaviour in order to maximize gains. Add more as you learn more.
What is the difference between Mid Term Swing Trading & Short Term Scalping?
Mid Term Swing Trading is exactly that. The Trade may stay in the entry zone for a few days and slowly start moving in the profit direction. Sometimes it may take 1-4 weeks for the trade to mature & get to all of its targets or stops.
Short Term Scalping is when the trade gets to the entry zone and instantly flies towards targets or spends a few hours at the most & starts moving in the profitable direction.
So essentially if you are trying to trade Short Term Scalping strategies, you need to enter the trade within minutes and sometimes within a few hours. Your trade may close in a few hours to at most 1-4 days.
On the other side, a Swing Trade may also enter the Entry Zone and fly straight away and close on the same day if the market is overheated or it can spend a lot of time in the entry zone before moving towards profit direction. Plan for both and be happy to take a small win if you need to.
So in conclusion, Short Term Scalp Trading requires speedy and fast action on your side to enter into the trade as the trade may spend only a few minutes / few hours before it starts moving to the targets / stops. While Swing may give you a little more time (however during extreme volatility we have seen even Swing Strategies doing just touch and go from the entry zone & delivering targets in a few hours).
Why are there so many strategies?
Well that's because Crypto is no longer just Bitcoin or Ethereum trading. We have hundreds & in some cases thousands of currencies. What works on small market cap coins may not work on big market cap coins. What works on small time frame trading may not work on big time frame trading. Basically there are hundreds of different variables and we have developed some of the best variables to identify short term Scalping Trades that delivers very quick 5-10% Profits and also Mid term Swing Trades that deliver 30-80% Profits.
One of the things to keep in mind is which coins you are trading. While on our end we process hundreds of signals every day, we deliver only a hand picked few that meet our stringent selection criteria based on multiple parameters. A lot of you may wonder; the ABC or XYZ coin is up 400% today but why we did not issue the signals for that. And the answer is, we prefer to focus on “safety first” over “mindless gains” because most such big movers end up losing all their gains within the next day. We do our best to avoid such coins but once in a while, ‘they’ manipulate such coins to an extent that our system picks them up. However we strongly recommend you to learn “Coin Selection” based on its past Trading History & avoid rubbish ‘shitcoins’ at all cost.
So in conclusion, we usually have multiple strategies to cover different types of coins that include BTC paired Alt Coins vs USDT paired Alt coins vs Leveraged USDT Futures coins vs BTC paired Margin Tradable coins.
I am new & don't have any idea on how to set targets, any advice?
For anyone who is new to trading with no idea on how to set targets, we recommend closing 50% of the position on Target 1 & set 20% for Target 2, 20% for Target 3 & 10% for Target 4. Also do not forget to set your Stop Loss to Breakeven after Target 1 Hits. What that means is if Target 1 Hits, you already closed 50% of the position and booked profits. Now the stop loss for your other position is moved to Breakeven (your entry price). Now if the coin moves to Target 2,3 & 4, you will make additional profits, however if the coin drops after reaching Target 1, you do not lose anything considering your Stop Loss is moved to your entry & you still made some profits on your closed position.
Automated breakeven stop-loss can be turned on/off on the trade setup form. It is almost always ON by default.
Once you learn the strategy and behaviour of the Markets, you can move to 40/30/15/15 settings & eventually create your own rules once you are comfortable to take trading decisions.
Remember when you close half of the position at Target 1, at least you made that money. Balance is all bonus and the Trade is free as you can not lose even if it goes back to your entry.
I just saw a signal issued yesterday, can i trade it today?
Yes, No & Maybe.
Here is how: Yes if it's a Mid Term Swing Trade & if the Target 1 is yet to hit. Maybe if its a Mid Term Swing Trade & Target 1 is hit but the price is back to Entry Zone & consolidating in a range. No if the price has already reached Target 2 and retraced back to the entry zone. We typically do not recommend 2nd entry on the same signal for new traders. However if you are a PRO and if you can read Price Action as well as Support / Resistance Zones, you can recycle the same trade many times over.
Strictly No for Short Term Scalp Trades, If the price has tested Target 2, we do not recommend a second entry. However you may consider a second entry if only Target 1 is hit and price is still holding in the Entry Zone. However keep in mind the second entry on Short Term Scalp Trade can be extremely Risky. Do this trade only if you have experience, if not, just move on and wait for a new Fresh Signal.
Short Term or Mid Term Trades, sometimes the Entry Zone is too wide, how do i know where to enter ?
Ok so first of all, when you see the entry zone is too wide, that's because we believe there are multiple areas in that zone that may provide Support / Resistance to the price. Which means price can get into that zone and start bouncing / dipping based on the quality of that level and overall market conditions. It's hard to pinpoint exactly where the price will stop & reverse in the profit direction again. In such scenarios we recommend you to ladder your entries in the zone. Which means instead of buying your entire quantity at one price, you may buy 30-40% in the upper zone and the rest can be spread across the entire buy zone. This way you can capture a better average price if the price gets all the way to the extreme end of the lower entry zone.
As always, once price hits Target 1, close half or 40% of the position unless you are a PRO and you know where to close based on price levels.
Do not forget to cancel pending trades once Target 1 hits.
How about Position Size? How to decide how much to trade for each signal?
So that's an interesting question & answer to that depends on your Risk Appetite. Before deciding Position size, you need to identify how much you can lose if the Stop Loss hits. Lets say, your capital size is $10000 & you are willing to risk $300 (3% of your capital) if the Stop Loss hits. Now let's assume the Stop Loss is 6% away from the upper entry. In this case your position size can be $5000 considering you can lose maximum $300 if stop loss hits. However if the stop loss is 20% away than your position size can not be more than $1500 as you may end up losing $300 if the trade hits stop loss.
Conclusion, sizing a position depends on how much you are willing to risk per trade. We do not recommend risking more than 1-2% of your capital per trade. Some Pro Traders risk 3-5% per trade but then they know what they are doing.
Now let's also learn one more thing, when we say risking 1-2% it doesn't mean the following. Read this very carefully. Some traders confuse this all the time and therefore you should read this twice! When we say risk 1-2% of your capital per trade that means, if the stop loss hits, you should not lose more than 1-2% of your capital. It does not mean your position size should be 1-2% of your capital. Your position size can be 100% of your capital if the Stop Loss is 2% away and if you are willing to risk 2% of your capital. Your Position Size can be 50% of your capital if the Stop Loss is 4% away and you are willing to risk maximum 2% of your capital. We hope this clarity helps some of the new traders as a lot of them assume 1-2% of the capital as a position size and not Risk.
Do I really need to use Stop Loss ?
Yes for sure when you are trading Short Term Scalping Strategies. However you can adjust the Stop Loss based on Support Levels if you feel the Stop Loss is too tight.
For Mid Term Swing Strategies, you can use a Dynamic Stop Loss (move it around as you go) or no stop loss and simply close the trade if the Trend breaks down. However that's only for Pro Traders who can identify critical Support / Resistance Levels and Trend continuation / breakdowns.
For advanced traders, we also recommend using Timeouts for you static Stop Loss. A Timeout means, your Stop Loss will not trigger for XX Seconds after the price hits your stop loss. This is to prevent Fake wicks that happen all the time to take out Stop Loss. Timeout feature will help you avoid closing at a loss when the actual price action is still healthy but one occasional dip may take out Stop Loss for a lot of traders. Again, advanced traders only!
Can I just Buy & HOLD based on the Signals ?
Most of our Signals are geared towards Trading & therefore while you can BUY & HOLD if you wish but in that case, you need to have sufficient knowledge to understand when to close. If you are convinced about a certain coin and possess sufficient knowledge, you may stay invested in a coin. Keep in mind that it may be safer to use a separate account for your long term holds to avoid accidentally selling things in a panic and for added security.
We may launch an Accumulation Product in near future that will allow you to BUY & HOLD for a longer period of time for Bigger gains.
While a lot of Crypto currencies are making 100-200-1000% gains, why do we only get signals for 5-10-50-100% gains?
Again for the same reasons mentioned above, the current product is a crypto currency trading product. We strive to make regular daily / weekly gains by taking smaller risks. When you want to make 200-2000% type of gains, you need to take bigger risks. In some cases your risk can be 100% of your capital. We believe, everyone can not afford to risk that kind of money & therefore we have created a product that allows you to make regular consistent profits without risking a fortune on it.
However we may soon be launching an Accumulation Product that will give recommendations for such astronomical gains like 200-2000%, however again it will not for everyone. We won't recommend it to all, considering the Risk is high.
What is Leveraged Perpetual Futures Trading ?
Let's take a real life example to understand this.
Lets assume Bitcoin price is $50,000 at the moment. Now let's assume you want to buy 2 Bitcoins. You need to pay $100,000 ($50,000 x 2) in order to buy 2 Bitcoins. Once you pay $100,000, you can withdraw the Bitcoins to your personal Wallet or send it to anyone you want or just hold it.
Now instead of buying these 2 Bitcoins by paying $100,000 in cash, you can use Leveraged Futures. The Leveraged futures are basically some kind of a Loan given to you to buy these Bitcoins. You can pay as little as just $1000 and borrow $99,000 and buy 2 Bitcoins.
However the difference here is, you can not withdraw this Bitcoin. This is not a real Bitcoin. It's a synthetic product that mimics the price of real Bitcoin. The only thing you can do is “profit” from the price action of bitcoin.
So let's say you invested $1000 and borrowed $99000 (The borrowing is automatic. You do not need to apply. It's done by default when you choose how much you want to Leverage). Let's say you bought Bitcoin at $50,000 per bitcoin Price. And after you buy the price jumps to $55,000 and you decide to sell at that price, you will make a profit of $10,000 ($55,000 x 2 Bitcoins sold = $110,000 from which you return $99,000 Loan and $1000 your own capital. You might be charged an interest which can be positive or negative based on Market Conditions.)
So technically if you do a trade like that you achieve 1000% returns on your investment. You Invested just $1000 and made $10000 in profits that's 10 times the value of your original investment. And Bitcoin moved just 10% in order for you to make 1000% profits. However, it’s easier said than done. On the flip side, if Bitcoin drops by just 1% to $49500, you lose your entire investment of $1000 as now the Bitcoin value is down to just $99000 and that's your loan so the exchange will sell your Bitcoins to cover the Loan.
How best to trade Futures Contracts with Leverage ?
First of all, all new traders must avoid trading Leveraged Futures Contracts with HIGH Leverage until they are comfortable with reading Price Action. You may start with a small 2-3x Leverage to learn how it works until you are comfortable and slowly increase it to 5-10x depending on your stop loss levels.
Never Leverage more than 10x in most cases if your Stop Loss level is too tight. Only for extremely high liquid coins, higher leverage can be considered by Pro Traders.
How to calculate how much to Leverage based on Risk % ?
Exactly the same way, how you will do it for SPOT trading. Check the Stop Loss Distance and decide how much you are willing to lose if the trade goes bad. What's your maximum risk tolerance? Once you know that, calculate the overall Dollar Value. Let's take an example below to understand how to do that:
Let's assume your capital is $10,000
Let's assume you are willing to risk 2% of your capital
Which means you are willing to lose max $200
Let's assume you want to Buy ADAUSDT @ $1
Assume your Stop Loss on the Trade is 5% ($0.95)
Now based on the above assumptions, we can define both the leverage and position size. In order for us to lose maximum $200 at 5% stop Loss, we may take a $4000 position size (You need to do a reverse calculation to figure how much you can lose at say $1000 size and eventually you will get to $4000 as answer for $200 loss at 5% stop loss. $200/5% = $4000)
Now you know you need a $4000 position size. You have an option to invest it entirely from your $10000 capital or invest just a small portion of it and borrow the rest by using a Futures Leveraged Contract.
To calculate your leverage multiplier you can do another quick calculation. You have $200 to lose and you want a $4000 position. Simply divide the size that you want to take by the loss that you are willing to take ($4000 divided by $200 Max Loss = 20) So that's your answer you can leverage up to 20x in an ideal scenario. In this case, if the trade works for you, you will make profits, worst case trade goes against you and you will lose that $200. You can't lose more than $200 in any case (If you use ISOLATED Margin type, more on that in the next para). Some exchanges keep some padding / cushion so you might need to add extra 15-20% on top of $200 to achieve $4000 position size.
What is Isolated Margin vs Cross Margin for Futures ?
Ok so remember the scenario above for ADAUSDT. You were willing to risk $200 and based on that you leveraged 20 times & took a $4000 Position. Let's say you chose Isolated Margin, Now if the trade goes against you and hits the Stop Loss, the Exchange will ask you to add more margin if you still want the trade to continue. If you do not top up the Margin, they will Liquidate your Trade and close the Position (known as a margin call or liquidation) if the required Margin Levels go down due to price crash. You lost your $200 Margin and the story is over. You cannot lose more than that.
Now let's say you chose CROSS Margin. Let's assume price drops in this scenario also. In this case, the Exchange won't bother you with a Margin Call. If there is additional $9800 available in your Futures account (Remember your original capital was $10000 and we invested just $200 in the trade so we are left with $9800 balance), the Exchange will start using that balance towards additional Margin and allow you to hold the position even at a loss. In this scenario you can lose your entire capital (in some extreme cases) if the price keeps dropping and if you do not close your trade or if you do not use a hard stop loss.
We do not recommend using CROSS Margin unless you are a PRO Trader. Use ISOLATED margin as this way, your worst case scenario is pre defined. You can not lose more than what you chose to lose initially if the trade goes against you.
Is Leverage Trading available to all ?
You can simply navigate to the Futures trading area of Binance.com to see if you are eligible and open an account for free.
Pros & Cons of Leveraged Futures Trading?
Allows you to make higher profits on a lower capital
You can define the Risk upfront & know your worst case scenario
Small price moves result into bigger profits
You can make as high as 200-2000% on just 2-20% moves
Extremely High Risk
You can lose your margin if the price goes the other way
Highly Addictive if you are not disciplined it can be like gambling
High profit potential comes with Highest Risk potential too
If you become greedy or impatient etc, you could lose your entire capital
Tips & Tricks for New Traders
Learn Dynamic Support / Resistance Trading
Learn Breakout Trading
Learn Fibonacci Retracement
Learn to draw Trend Lines / Horizontal Zones
Learn Trend Trading
Learn to trade High Momentum coins
Avoid reading too much on Social Media
Avoid learning too many indicators
Keep it simple & you will learn it faster
Read our Strategy Guides & master the strategies
Eventually create your own trading style
Educate yourself & keep upgrading your knowledge regularly