How to Generate Bitcoin Trade Signals with Bitcoin Trading Systems Strategies
Cryptocurrency MT4 Signal Indicator
The only method of bitcoin trading is through signals, It is best to learn how to generate these signals for yourself, this way you do not have to rely on other traders to generate them for you.
Generating bitcoin signals isn't easy & requires you to have a lot of cryptocurrency technical analysis knowledge & experience, but the earlier you begin practicing how to generate these signals for yourself the better it's for you.
A good technique of how to practice generating bitcoin signals with bitcoin systems is to open a free practice Bitcoin demo account & test your signals on this practice account risk free without risking your money, then once you have tested your bitcoin strategies & they are profitable on the trade demo practice account you can the use these bitcoin signals on a live account.
The method of how to practice generating these signals as well as how to back test the bitcoin signals on the demo bitcoin account using MT4 platform is discussed below:
So, How Can a Trader Generate Bitcoin Trade Signals?
The best technique of generating bitcoin signals is through bitcoin systems, You can Learn how to create bitcoin systems from the lesson how to create Trading Systems on the right navigation menu under the tutorials Bitcoin Key Concepts.
A system is a combination of one or two or more crypto indicators with written rules of how these crypto indicators will generate these bitcoin signals.
Take an example of the simplest system or strategy known as moving average crossover method. A buy cryptocurrency signal or sell cryptocurrency signal gets generated when there's a cross over of the two moving averages: either a buy cryptocurrency signal for an upward moving average crossover or a sell cryptocurrency signal for downwards trend.
Generating MetaTrader 4 Free Signals - Cryptocurrency MetaTrader 4 Signal Indicator - Bitcoin Trading Signals MetaTrader 4 Indicator Strategy MA Crossover Strategy Method
The system example illustrated below shows a bitcoin system using the above moving average strategy combined with the RSI and MACD indicators to generate buy & sell trades.
Example of Generating MT4 Free Signals - Cryptocurrency MetaTrader 4 Signal Indicator - Bitcoin Trading Signals MetaTrader 4 Indicator Strategy Method
In generating buy & sell signals, traders should use simple bitcoin systems to generate these bitcoin signals.
Generating MetaTrader 4 Free Signals - Cryptocurrency MetaTrader 4 Signal Indicator - Bitcoin Trading Signals MetaTrader 4 Indicator Strategy - Buy and Sell Signals
Generating MetaTrader 4 Free Signals
An example of a simple bitcoin system that works, is one that's a combination of:
- Moving average cross-over strategy
- RSI
- MACD
The written bitcoin rules are:
Generating Bitcoin Signals Strategy System Examples
Bitcoin Trade Rules:
Buy Bitcoin Signal is Generated when:
- Both Moving averages going up
- RSI value above 50
- MACD above center line
Sell Bitcoin Signal is Generated when:
- Both Moving averages going down
- RSI value below 50
- MACD below center-line
Generating Buy & Sell Trades - Examples of a Strategy Method
Exit Trade Signal
Exit signal gets generated when MA, RSI & MACD cryptocurrency indicator give a signal in opposite market trend direction.
The crypto chart time frame to use is 1 hour chart time frame or 15 minutes chart time frame depending on what type of trader you are.
For a beginner bitcoin trader the above written rules will give good buy & sell bitcoin trade signals, the only thing which a trader needs to do is to have the discipline to follow the written bitcoin signals rules the exact way they are, and wait for a buy or sell trade transaction to be indicated by your bitcoin strategy & trade after the signals have been generated, not before they are generated.
Back Testing
Generating Trading Signals with a system is one of the easiest method to trade bitcoin, it is the best way that a beginner can attempt to determine the direction of the market bitcoin trend with a good level of accuracy, and with a little backtesting on demo trading account so as to gradually increase the level of accuracy of this bitcoin signals strategy
The best way to back-test a bitcoin strategy is by following these two steps:
- Paper Trade
- Cryptocurrency Demo Trade
Bitcoin Paper Trading - This method of testing a bitcoin system involves placing your system on the charts, then take the chart back to a particular date, 3 months back for example, and then using this chart history to determine where your bitcoin strategy would have given buy, sell and exit signals. Write down these points and the profit per trade transaction on a piece of paper and then calculate the total profit after you have recorded a good number of trades such as 50 paper trades bitcoin transactions and determine if your method is overall profitable, the win ratio, the loss ratio and the risk:reward.
This is an ancient technique of testing bitcoin systems which was used by traditional investors when there was no online markets or pc computers for that matter, the trader would use something like the A3 or A2 paper, graph format paper and draw the charts manually (Imagine plotting the charts on your bitcoin platform by hand each day each hour, would you be ready to do that? I doubt) Those investors were hardworking than most, some were so used that they still continue to paper trade the online market and draw the crypto charts on paper, anyway for our paper method examples, just a sample data of 50 trade transactions is all we need.
A good bitcoin tool to use to back-test your system is known as the MT4 Bitcoin Step by Step Tool. Found on MetaTrader 4 charts tool bar of MetaTrader 4 platform, If you want to find the charts toolbar on the MT4 platform it is at the top of MT4 platform. If it is not: Click View (next to file, left top corner of MT4)>>> Tool Bar >>> Charts. Then click Customize button >>> Select Bitcoin Step by Step >>> Click Insert >>> Close.
MT4 Bitcoin Platform Chart Tool-Bars - How to Trade Bitcoin for Beginners
MetaTrader 4 Chart ToolBars - Bitcoin Step by Step Button Key for Back Testing Bitcoin Systems Discussed
Once you get this MetaTrader 4 tool you can move your chart backwards, & use this Meta Trader 4 tool to move the crypto charts step by step while at the same time testing when your bitcoin system would have generated either a buy or sell trade, & where you'd have exited the trade, then write down the amount of profit/loss per bitcoin trade transaction and out of a sample number of bitcoin transactions you would then calculate the overall profits/losses generated by the strategy.
If your bitcoin strategy is profitable on the paper method then, it is time to demo bitcoin trade & testing if the it's profitable on real market as it's on paper technique. This is the process of testing or backtesting a system.
Writing a Bitcoin Trade Journal
Maintain a Bitcoin Journal to keep track of profitable bitcoin trade transactions, and determine why these trade transactions were profitable. And also keep a log of all losing trades, determine why these trades made a loss and the avoid making these same mistakes the next time you trade using your strategy.
Tweak your bitcoin system until you get a good risk to reward ratio, with bitcoin signals that you generate. Aim for a good risk: reward of 3:1 and a win ratio of above 70% is a good ratio, with good bitcoin money management even a bitcoin strategy with a win ratio of even 30% i.e. Less than half of your bitcoin transactions make profit you can still make a profit. You might want to read this topic to know what the table below is all about: Risk : Reward Ratio.
Risk-Reward Ratio Chart of Bitcoin Trade Money Management Strategy - Bitcoin Trading Strategies Described
Read Bitcoin Equity Management Methods Tutorial
A manual bitcoin system is still the best way to generate bitcoin signals compared to automated systems, a manual strategy is a better method & is also much simpler to implement.
However, other traders prefer automated bitcoin systems & for those then they can check the information on this page MQL5 Crypto EAs and automated bitcoin systems.
You can also view our extensive list of bitcoin trade strategies topics that provides you with various methods of buy & sell technical analysis using a number of diverse technical methods, navigate to the Bitcoin Trading Strategies Section.
