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How to Trade Bitcoin Gold – Heikin Ashi Technique
Our trading community is composed of long-time crypto enthusiasts, and in today’s article, we want to bring to your attention the Bitcoin Gold trading strategy that uses the Heikin-Ashi technique to forecast the Bitcoin Gold price.
Our team at Trading Strategy Guides is working hard to put together the most comprehensive PDF guide to different cryptocurrency strategies. We encourage you to explore other alternative coins, and the new Bitcoin of China Tron TRX coin can attract your attention because it’s one of the most popular coins on social media these days.
The Heikin-Ashi strategy is simply another form of looking at charts that traders can use to spot trading opportunities. This new revolutionary way to look at charts can be applied to any time frames. So, no matter of our trading style (daytrading, swing trading, trend following) you can implement this trading method into your trading cryptocurrency strategy.
You can put to use the Heikin-Ashi charts to many markets even though they initially were designed for commodities and stock market price; it has the same kind of success on Forex currency pairs as well as on cryptocurrencies.
Let’s first start to try and understand what is Bitcoin Gold, how Bitcoin Gold works and why it’s important to HODL Bitcoin Gold in your cryptocurrency portfolio. Also, read our best fractal trading strategy.
What is Bitcoin Gold?
Bitcoin Gold is another version of Bitcoin, and it’s an electronic currency. BTG can be considered the newest hard fork from Bitcoin blockchain and the only difference between the two is the way you can mine Bitcoin Gold.
So, Bitcoin Gold BTG will use a type of proof of work called Equihash, which is similar to what Ethereum uses. We don’t really need to understand, but it’s good to reinforce the reasons why Bitcoin Gold has potential.
BTG was launched on October 25th, 2017 so it’s a relatively new coin currently being the 23th most valuable cryptocurrency.
The primary goal of BTG is to decentralize Bitcoin completely and to give the opportunity to everyone to become a miner with only basic hardware requirements.
In a nutshell, we hope this gives you clear answers on what is Bitcoin Gold and what it stands for.
Next, we’re going to discuss what technical tools we need to make money trading cryptocurrency strategy.
The only tool we need to trade Bitcoin Gold is the Heikin-Ashi charts.
The Heikin – Ashi Charts
Heikin – Ashi in Japanese means average bar and are a type of candlesticks different than the typical Japanese candlesticks that you encounter when learning how to trade. However, we’ve found that the Heikin – Ashi candlesticks are much more accurate in helping us determine Bitcoin Gold price movements.
Here is a typical Bitcoin Gold chart:
And, here is the Heikin – Ashi Bitcoin Gold chart:
The good news is that you don’t have to be a genius to trade our Bitcoin Gold trading strategy.
Now, the way the Heikin – Ashi candlesticks can help us to buy Bitcoin Gold is straightforward.
There are two primary trade signals that we can identify through the Heikin Ashi candlestick:
- Bullish candlesticks with no wicks or very small wicks indicate a strong uptrend and good buying Bitcoin Gold opportunities.
- Small candlestick characterized by a small body and big upper and lower wicks signal a potential reversal.
Note* The same rule can be applied in reverse for Heikin Ashi bearish candlesticks.
Now, before we go any further, we always recommend taking a piece of paper and a pen and note down the rules of the Bitcoin Gold trading strategy. For this demonstration, we’re going to look at the buy side.
Bitcoin Gold Trading Strategy
In this trading cryptocurrency strategy, we look at a high-low breakout strategy.
Our team at Trading Strategy Guides has developed one of the best breakout trading strategies because it can tell you straight away when you’re wrong which means that you can minimize losses.
Step #1: Identify three consecutive bullish candles that have no lower wicks.
After you switch to the Heikin Ashi candlestick chart on your trading platform, the first step is to identify three consecutive bullish candles.
It’s mandatory that all the three Heikin Ashi candlesticks have NO lower wicks.
Remember that bullish candlesticks with no wicks indicate a strong uptrend and further increase in Bitcoin Gold price.
We also have to make sure that these three consecutive candlesticks are placed at the right location.
This brings us to the second rule of our Bitcoin Gold trading strategy:
Step #2: Before the three consecutive bullish candles we need to have no more than 5 consecutive bearish candles
Location, location, location is the key word and a fundamental concept if you want to improve your trading instantly.
So, prior to the three bullish candles spotted earlier, we need the location of this pattern to be located in such a way that behind it we can’t count more than five consecutive bearish candles.
The first chart below illustrates this Bitcoin Gold trade setup:
Identifying trends and opportunities to buy Bitcoin Gold are much easier now that we have a trade setup with a good location.
The Bitcoin Gold coin satisfies both of our trading conditions which mean that we can move forward and outline what the trigger condition for our entry strategy.
Step #3: Buy at the market at the opening of the next 4th candle
When to buy Bitcoin Gold is very easy to understand.
To initiate a position, wait for the opening of the 4th candle after the three consecutive bullish candles.
In the figure below, you can see the long Bitcoin Gold example:
Preferably, after you spotted the three candle trade setup, you need to get ready to pull the trigger.
The next important thing we need to establish when trading cryptocurrency strategy is where to place our protective stop loss.
See below …
Step #4: Place protective Stop Loss below the most recent swing low
There is a very obvious predictability in our approach to the stop loss strategy.
We hide our protective stop loss few pips below the most recent swing low. Alternatively, you can place your stop loss below the three candlestick pattern, but you risk to be taken out prematurely when we’re in a trading range.
So, you need to adapt your stop loss strategy to the current market conditions.
Last but not least, we also need to define where we take profit when trading Bitcoin Gold.
See below …
Step #5: Take Profit equals 2 x risk or 3 x risk
Depending on how strong the Bitcoin Gold trend is, you want your take profit target to be two or three times more than your stop loss. This is a simple exit strategy that potentially can reward you with a positive risk to reward ratio.
For take profits, you can also cash out at regular trading intervals partial profits.
Note** the above was an example of a BUY trade using the Bitcoin Gold cryptocurrency trading strategy. Use the same rules for a SELL trade – but in reverse. In the figure below, you can see an actual SELL trade example.
Conclusion – Trading Cryptocurrency Strategy
Our favorite Bitcoin Gold trading strategy is really useful for making the BTG trend more readable, and buying Bitcoin Gold can be spotted at a glance. If you believe in the decentralized blockchain environment, then Bitcoin Gold coin seems a steal at the current market price. Here is another strategy called Time-Based Trading Strategy.
The more you use the Heikin Ashi chart, the better you’ll get at trading BTG coin.
Thank you for reading!
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