A cryptocurrency investment involves more than just buying and selling digital assets. Stop-loss orders, limit orders, and charting are a few examples of crypto trading tools that can level your game up. These methods enable investors to maximize investments, secure profits, reduce losses, and make wise investment selections. Let’s discuss it!
The cryptosphere is common with stories of incredible wins and unbelievable defeats. The ability to use strong cryptography tools and techniques is what sets winners apart from other traders.
Like investing in conventional assets like stocks and bonds, managing a portfolio and buying the correct cryptocurrencies require more than just picking the proper assets.
Platforms for trading cryptocurrencies, such as Breet, are similar to those used for stock trading in that they allow you to tailor your trading experience, optimize earnings, minimize losses, reduce risk, and make wise investment decisions.
It has a wide range of features, such as cryptographic tools that offer a tactical advantage when holding crypto assets.
These capabilities, which are accessible on the Breet platform’s Trading page, can sometimes make a big difference and help in high-value crypto selling.
Let’s take a look at some helpful crypto trading tools that can up your crypto game. As well as affect your experience investing and enable you to guard against irregular price swings in the cryptosphere.
5 Crypto Trading Tools That You Need
1. Stop-loss Orders
An order to buy or sell a certain asset at a specific price is known as a stop-loss order. Stop-loss order is one of the many crypto trading tools that can up your crypto game. Your stop-loss order will be activated, and the trade will be carried out automatically once the price of the cryptocurrency asset you want to buy or sell reaches the level you specify.
Here’s an illustration:
An investor can place a stop-loss order to sell his Litecoin at $150 if he purchased it at $180 but thinks the price will fall. The order will be activated, and the trade will be carried out. The investor will be able to exit the position and stop further losses when the coin price falls to this level.
Stop-loss orders’ key benefit is that they enable you to detach emotion from your financial choices. The stop-loss mechanism aids in preventing investors from becoming overwhelmed by fear and panic. This is vital given how volatile the cryptocurrency market can be.
According to Justin Chan, head of trading at Wave Financial, an SEC-regulated digital investment manager, “Stop-loss orders assist reduce risk and aren’t triggered until the market achieves a specified price.”
Since crypto trading occurs continuously, unlike stock market trading, it is impractical for investors to continuously watch it. Even when you’re asleep, a stop-loss order enables you to buy or sell anytime your desired price is met.
Charts are used by seasoned traders to calculate stop loss percentages (that is, follow the history of investments, more on this later). To minimize the downside if the level is lost, you might find important support levels on the chart and set a stop loss below them.
2. Limit Orders
Limit orders are placed by investors to buy or sell cryptocurrency at a price above or below the current price.
For instance, you can set a buy limit order at, say, $130 when the price of Litecoin is $156, and you want to buy when it dips to $130. In contrast, if you own the asset and believe the price will increase, you can set a sell limit order at the price you want.
The position will automatically be sold when the limit order is hit. If you establish a limit order to sell an asset just above its current price. The removal of emotion from trading and the elimination of the need to constantly monitor your holdings result from having this happen automatically.
3. Dollar Cost Averaging
In order to spread out the risk in cryptocurrency investment, dollar cost averaging (DCA) entails investing a defined sum of money in a particular asset on a regular basis over a considerable amount of time.
An investor, for instance, could invest in bitcoin over a lengthy period of time by purchasing $1,000 worth each month rather than a large sum all at once. If the price of Bitcoin suddenly lowers, there is no cause for concern.
Another good crypto trading tool that can up your crypto game is dollar cost averaging. It takes time to learn when and how much to buy and sell. In volatile markets where emotions run high and affect judgment, dividing assets into smaller parts and spreading them out over longer time periods is “particularly useful”.
Another effective tool in your toolbox for investing is a chart. Market participants can view historical price movements and volume thanks to charts, which are frequently employed by investors and traders. People are beginning to see patterns that aid in risk management and serve as entry or exit points.
No one can predict the direction of the market. But charts can be useful in identifying opportunities while taking risks and in providing advice based on previous events.
The graph demonstrates whether an asset tends to increase or decrease at particular price levels.
Charts can be used to spot trends, areas of support and resistance, and supply and demand at different prices. Charts may help investors understand market data and keep on top of things. An effective chart layout enables traders to immediately assess the data they need to make wise judgments.
Technical Investors benefit greatly from their ability to interpret indicators. Because human emotions are so predictable, charts can depict them.
Investors in cryptocurrencies can design unique charts using reliable trading platforms
5. Automatic Settlement
Cryptocurrency trading processing and settlement can be done automatically on blockchain technology. As a crypto trader who regularly converts your crypto assets into fiat currency, the automatic settlement comes in handy.
Breet’s automatic settlement allows users to automatically sell their cryptocurrencies for cash money and sends the money directly to their connected bank account without having to do anything. It is completely automated! A few crypto trading apps like Breet enables users to set this feature.
Although the bitcoin market’s volatility remains a key characteristic, these sophisticated trading tactics let you act early and proactively. Additionally, it gives investors the best chance to minimize negative risks and scale their assets. And also enter and exit the market when the time is right during their investment journey.