Developing a Bitcoin System: Indicator Based Bitcoin System

A Bitcoin System refers to a set of bitcoin rules which you follow to manage your trade positions. These written bitcoin rules will determine when you open a bitcoin trade and when you'll exit. A bitcoin trade system is created by combining 2 or more indicators.

For illustration, the Stochastic Oscillator Technical technical indicator can be combined with other indicators to make a cryptocurrency trading system. For this example - stochastics oscillator can be combined with the crypto indicators below to come up with the following cryptocurrency system strategy.

• RSI indicator
• MACD
• MAs technical indicators

Example - MT4 Template System Example

Developing a System - Crypto System Examples Template

So the question is how can a trader come up with bitcoin trading systems that work like the trading system example above and how does one writedown it's rules? to write the bitcoin system rules follow steps below.

Seven steps to creating/developing an technical indicator based trading system

To come up with these set of bitcoin rules we shall make use of the following 7 steps.

1. ==22==ChooseSelect your Time-frame

The first step depends on how many hours you want to dedicate to bitcoin trading. Whether you prefer sitting in front of the Desktop computer constantly for several hours interpreting short crypto chart time-frames OR you prefer setting up your crypto charts using larger crypto chart timeframes once or twice a day. Selecting a chart time-frame will mainly depend on what type of trader you're.

Chart Time-frames in MT4 Platform Software

While testing your new bitcoin system you may want to find out about its performance on different crypto chart timeframes & then choose and select the most accurate and profitable crypto chart time-frame for you.

2. Choose indicators to identify a new bitcoin trend

The goal of one is to get into the trade as early as possible and take maximum advantage of bitcoin price moves.

One of the common ways to identify a new bitcoin trend as fast as possible is to use MAs Indicator. A simple strategy is to use a MA ==22==crossovercross-over system that will identify a new trading opportunity at its earliest stage.

MA Cross over Strategy Method

Sell cryptocurrency signal & Buy cryptocurrency signal Generated by Moving Average(MA) Cross over Bitcoin Method

3. Select additional indicators to confirm the bitcoin trend

Once we find a new bitcoin trend we need to use additional technical indicators that will confirm the entry cryptocurrency signals and give either a green light for action or save a trader from fake outs and whipsaws.

To confirm the bitcoin signals we use RSI and Stochastic Oscillator indicator.

RSI Crypto Indicator ==22==and Stochastic Oscillator Bitcoin Indicator System

4. Finding crypto entry and btcusd exit points

Once indicators are selected so that one indicator gives and generates the signal & another indicator confirms the signal, it is time to enter a bitcoin trade.

A trader should enter a bitcoin trade as soon as a cryptocurrency signal is derived & generated & confirmed after a candle closes.

Aggressive traders enter a trade transaction immediately without waiting for the current bitcoin price bar to close.

Other traders wait until the current bitcoin price bar is closed and then enter the trade position if the trade transaction setup has not changed & the trading signal remains valid. This method is more considerate and prevents additional false entries & trading whipsaws.

Generating Bitcoin Signals - how to Generate Signals.

Generating Crypto Signals

For exits, a trader can either set an amount that wants to earn per trade or use technical bitcoin trading tools that help to set profit goals like Fib expansion tool or set a protective stop loss order depending on the btcusd market volatility at any given time. Alternatively a trader can exit when the indicators give an in the opposite trend signal.

When opening a new trade position it is always important to calculate in advance how much you're willing to lose if the trade transaction moves against you. Although the aim is to create the best bitcoin trading system in globe, losses are inevitable and ==22==thereforehence being ready to tell where you will give up and cut your losses before starting a bitcoin trade is very important.

5. Calculate risks in each bitcoin trade setup

In Bitcoin, you must calculate your risk for each trade transaction. Serious traders will only enter and look to open an order if the risk:reward ratio is 2:1 or more.

If you use a high risk:reward ratio like 2:1, you significantly increase and improve your chances of becoming profitable in the long run.

The Risk to Reward Chart below indicates to you how:

Crypto Money Management Risk Reward Chart - Examples Template Crypto System

In the first illustration of Risk to Reward Ratio, you can get-to see that even if the system only won 50% of your trade positions, you'd still make profit of $10,000. Read more on this btcusd money management topic: Here Bitcoin Trade Capital Management Rules - MT4 Template System and Bitcoin Trade Equity Management Methods - Template System Example.

Before opening a new bitcoin trade, a bitcoin trader should define the point which they will close the bitcoin trade if it turns to be a losing bitcoin trade. Some traders use Fib retracement levels tool and support ==22==& resistance zones. Other traders just use a pre-determined stop loss to set stop loss crypto orders once they've opened a btcusd trade.

6. Write down the bitcoin systems rules and follow them

A Bitcoin Trade System refers to a set of trade rules that you follow to manage your trades.

The keyword is A SET OF TRADE RULES that you must follow. If you do not follow the bitcoin rules then you do not even have a bitcoin system in the first place.

The next bitcoin trading systems lesson displays to you an example of how to utilize the above steps to create your own Bitcoin online bitcoin trading system:

Next Lesson: Example Illustrations of Writing Bitcoin Trading Systems Rules

7. Practice on a Practice Practice Demo Account

Without enough trades, you'll not be able to realize the true profitability of your system.

Once you've your bitcoin trading system rules written, it is time to test and improve your trade system by using it on a demo demo account.

Open a free demo account & trade your bitcoin trading system to see how well it will respond.

It is strongly recommended to start with a demo account & practice for at least for 1 or 2 months so as to gain and garner some practice and experience how the btcusd market works.

Once you start making some decent profit on your demo practice account you then can try opening a ==22==livereal account and ==22==beginstart trading with live money.

More Lessons and Tutorials & Courses:

• How Can You Set Buy Limit Order in MetaTrader 5 Software?
• Top 10 Bitcoin Indicators
• Mobile Bitcoin Trade Platforms List
• What's BTCUSD Trading Parabolic Trend?
• How to Open a Real ==22==MetaTrader--5 BTC USD Account