The high volatility of cryptocurrencies, especially during the day, makes it possible to use the basic principle of trading - the most profit from transactions on trends and reversals. But, you can still use channel crypto trading strategies.
Type: Side market (flat).
Timeframe: M5 and above.
Trading asset: Any crypto active. The main requirement is a fixed (2-3 points) spread and no hidden fees.
Trading time: 24 hours / 7 days a week.
Most binance day trading strategies for price channels work according to the following standard patterns:
The most reliable will be a breakdown of the channel boundaries. Breakdown means the end of the period of equilibrium between the forces of buyers and sellers. The necessary volume of open and pending positions has been accumulated to start a new trend. The longer the channel, the higher the probability of breakdown.
The following example shows two common variants of price behavior at the channel boundaries. A flat usually shows a strong price level that is not visible by indicators or graphical patterns. The same probability of both the continuation of the movement and the price reversal back into the channel.
There is a short rollback at the lower border after which the downtrend continues. On the bitcoin day trading strategy, this indicates market makers entering the market closing profits. The trend may continue.
The third example is what the correct reversals from the channel border are like. Large shadows or just one candle behind the line. Then a quick return to the channel. Signals near the middle line require additional confirmation.
Visual analysis is well complemented by the price channel indicator. For example, Fibonacci or Pivot levels. This way you will see how your calculations match the market levels that most traders trade.
At the channel resistance level, a classic false breakout (retest) is visible. The price goes below the line on a long downtrend but quickly returns to the channel. This is followed by several candles near the line.
Open a deal or not? Is this the beginning of a reversal or the end of a trend? We look at the MACD which works as a filter for pullbacks and corrections. The histogram is below zero and shows low market activity. This means that the channel border is in the zone of strong resistance to the price fall. While we remain out of the market.
Two down candles after a brief flirtation and the next breakdown. This indicates a small, but the advantage of sellers. Let's open a Short (SELL) order for the continuation of the trend.
If automatic advisors or signal services are used for confirmation, check the presence of a price channel indicator strategy in the algorithms. Without them, there will be many false signals in the sideways market!
The image shows the logic of finding the channel. It can only be determined by one price high or low. To do this, you need to understand the criterion channel price of the levels of the channel boundaries for the market. Now, this is a strong reversal pattern of the beginning of a correction of a fast downtrend and the top of its end.
The forecast turned out to be correct, the trend continues and you can safely close the profit.
For more examples of Ethereum and bitcoin trading strategy on channel patterns, watch the video:
Using Binance trading strategy on channel patterns, a trader can earn money where there is no "market" crowd. Most are looking for trends, and the side market does not attract much attention. You can safely open a deal when there are no market makers and speculation on the market.
The main thing is to correctly determine the borders of the channel and make sure that the breakdown or rollback is true!