See the essential tools to trade cryptocurrencies
See the essential tools to trade cryptocurrencies

Discover 4 Essential Tools for Cryptocurrency Trading

Anyone who likes to trade cryptocurrencies and really wants to win in the market needs a good platform in hand. Without a reliable platform, it’s hardly possible to take advantage of the best opportunities in the cryptocurrency market. Professionals always use the best resources.

Traders use tools that stand out. Today, there are several resources available for trading, but the question remains: what are the main resources, and which help the most with cryptocurrencies? In this article, we bring you four tools that will help you in your trading. Check it out!

Order Book

To trade cryptocurrencies, liquidity is essential. Trading means looking for the best buying and selling opportunities, and for that, the asset must have enough offers in the book. The book basically presents the buy and sell offers on the market. They are traders who want to buy or sell a cryptocurrency at a certain price. Thus, it’s possible to identify liquidity. A trade occurs when a player in the market accepts an offer to buy or sell.

The book shows where you can find the most impactful offers of that cryptocurrency. Take, for example, cryptocurrencies like bitcoin. “Round” numbers are usually very important as they are price definers. So, many times, there’s an accumulation of offers there (many traders want to sell or buy at these points), which are areas of impact.

So far, we’ve talked about offers and the book, but what about the order book? This tool allows the market offers to be displayed on the chart! Thus, it’s possible for you to read graphically, identifying trends, and using indicators while analyzing the cryptographic offers!

Here are some advantages of the order book

Graphical reading with monitoring of market offers is possible through the order book.

  • Analyze supports and resistances that have great offers: If you marked any support and resistance on the graph, you can confirm that it’s a point of high interest for traders with the order book. Thus, it takes note of high-impact areas.
  • Examine the high or low liquidity per hour: Some times are better for trading cryptocurrencies than others. It all depends on the volume of traders operating. Therefore, it helps you to understand if it’s a good time to carry out your operations.
  • See the high or low defense of the market: Great aggressions with a low volume of offers can quickly push the price of a crypto! Analyze moments of high volatility, when the scarcity of offers, added to the high aggressiveness of the traders, can quickly change the price level.

Chart Trading

Studying and operating on the same platform is essential for a trader. It’s quite challenging to capture the best opportunities in the market while having several windows open. Naturally, concentration and focus are lost. It’s not possible to take advantage of the best opportunities in this manner.

Therefore, Chart Trading comes as an exceptional alternative to trading cryptocurrencies. Chart Trading basically allows the trader to follow the chart of a crypto, identifying their findings at the same time that they carry out orders directly on the chart.

That way, Chart Trading streamlines the trading process. It brings speed to take advantage of opportunities by quickly opening and closing position buttons and trading with ease.
Thus, with Chart Trading, it’s not necessary to have several operational tools or several windows on the screen.

Here are some of the most used features of Chart Trading

Chart Trading traditionally allows orders to be sent by buttons with quick positioning in the market and also facilitates the choice of set prices. Here we go!

  • Buy and sell to market: With these buttons, it is possible to open or close a position immediately. How immediately are we talking? It means that you’re going to attack book offers. So, it’ll actually carry out a trade. When you see a clear buying opportunity and don’t want to wait for the market to return to some region (to make the purchase), you can use buy-to-market in order to speed up trading.
  • Zero: This feature ends in an open position. Was the price of the cryptocurrency against its position or did the market reach its target? You can reset it manually. The zero button sends a market order in the same quantity and in the counterparty of your position. So, if you bought 1 bitcoin when you click reset you send a market order of 1 bitcoin.
  • Stop-loss launch: It’s possible to launch stop-loss orders via Chart Trading! Define your outputs and facilitate the operational process. With Chart Trading you can send loss orders quickly, setting your loss limits.
  • Launch of limited orders: Forward limited orders through the tool. If you want to buy or sell at specific prices, participating in the book, you can quickly launch orders through this tool.

Tape Reading Indicators

Tape reading is the order flow reading when trading cryptocurrencies. Generally, for the interpretation and use of tape reading, the Book of Offers, Times and Trades, and Volume At Price tools are used. These tools are not tracked on the chart. But, what if it was possible to track the same information from these tools on the chart? This is what flow indicators do.

Tape reading indicators are widely used to aid graphical interpretation. If the market is rising, it is logical to think that buying aggression is beating selling aggression. Buyers are winning the fight. But how to see this in practice? One of the widely used indicators is the accumulation of aggression.

Cumulative Delta Indicator

In the Cumulative Delta, it’s possible to monitor the balance of the buying and selling aggression. The balance is purchase minus sale. Thus, if the balance increases, it means that the buying aggression is increasing in the face of the selling aggression.

Thus, it’s possible to validate movements, entries, and even define whether you’ll remain in the trade or not. If you realize that, within a span of time, the market is only attacking upwards, you can try to take advantage of bigger movements.
There are several flow indicators: use them in the way that best fits your operation and defines the main ones for your trading.

Volume At Price

You already know the importance of volume in operations. There are two types of volume: volume of offers and turnover. Both types are part of a cryptocurrency’s liquidity. When it comes to turnover, it’s being treated by the value of the total number of shares traded. Turnover shows real interest: someone actually bought or sold at a certain price.

Knowing this information, it’s possible to identify traders who are positioned at certain prices. The higher that positioning, the stronger the price is determined. This can be interpreted in several ways, and the simplest to understand is supports and resistances. Thus, in Volume At Price, it’s possible to identify points where there was a large volume of trading. In an area where there was great negotiation, a specific point, for example, it’s possible to mark based on support or resistance.

Review other important details of Volume At Price

With Volume-price, it’s possible to identify important price points in cryptocurrency. See below:

  • Important prices: Zeroed prices (the US $ 8,000.00, US $ 9,000.00, etc.), are prices that all traders are looking at. Prices divide the market. So, it can be a reference for operations based on price or close to it. Usually, the volume traded is high at these levels.
  • Bounce: A bounce is described as a point at which the price of a cryptocurrency falls to its level of support. It occurs in false disruptions. In such cases, follow the Volume-price: it usually shows low trading levels.
  • Consolidation: Regions of high consolidation are points where buyers and sellers are in a real fight. Therefore, trading at these price levels is generally high, and the price of the cryptocurrency should stay longer and vary more slowly.

In this article, we cover essential tools for trading cryptocurrency. If you liked this article and want to be always well informed, create your account on Vector Pro and get access to the most advanced trading and analysis tools of the cryptocurrency market.

Especialista em trading e produtor de conteúdo para mercado financeiro e traders de diversos perfis. É formado em Administração de Empresas (UFRGS) e pós-graduando em MBA Broker Global (IBMEC). Há mais de 4 anos, trabalha auxiliando traders e investidores a chegarem aos seus objetivos financeiros.

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