Dogecoin Rally Attracts Crypto Traders Around the World
Following the "GameStop (GME) Revolution" of late January 2020, traders of all stripes discovered they have much more power than they initially assumed.
With the right cryptocurrency trading strategies and connections (like Reddit), independent traders can trigger a rally. This rally caused the price of GameStop to increase ten-fold and garner international attention. Immediately following this initial success, individual traders turned to the crypto sphere and caused a similar rally with the price of Dogecoin.
While the GameStop rally was impressive, it appears cryptocurrency might be even better for this current trend. Crypto trading is usually more volatile and markets are also available 24 hours per day. Dogecoin, a leading "alt-coin" is even faster moving than the better-known Bitcoin.
Of course, to outsmart the market and benefit from Dogecoin's price swings, traders will need to know what they are doing.
Knowing where to buy cryptocurrency, what causes cryptocurrency's price to change, and how to trade cryptocurrency will be very beneficial. If you haven't already, we strongly recommend familiarizing yourself with the basics of cryptocurrency trading.
Fortunately, with a few changes, you can develop a successful Dogecoin trading strategy.
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Most novice traders think that to have a profitable trading strategy, you need a complex strategy. That’s wrong, and our Free Dogecoin strategy will demonstrate how to profit from day trading with short-term price patterns.
Our team at Trading Strategy Guides is working hard to put together the most comprehensive PDF guide to different cryptocurrency strategies. Previously, we covered the Japanese’s second favorite digital coins after Bitcoin, Nem cryptocurrency, which provides an alternative for API developers that are looking to develop blockchain-based apps.
Toby Crable is probably one of the less unknown profitable traders. Even though in 2005, Toby Crabel was described by the Financial Times as “the most well-known trader on the counter-trend side," but it still remains an unknown name in the retail industry.
The reason why we mention Toby Crabel work is because he is the father of the ORB pattern aka the Opening Range Breakout pattern, which is regarded as being the most powerful tool of the last 25 years.
This powerful trading technique has helped legendary guru trader Larry Williams to turn $10,000 into $1 million in less than a year.
Moving forward, we’ll give you some more clues on how to trade the ORB – Nr4 pattern, what is cryptocurrency Dogecoin and how to buy Dogecoin.
What is Dogecoin?
Dogecoin is a legitimate cryptocurrency suitable for microtransactions and to send little gifts, which is what it’s used for on a lot of internet forums. The coin's meme-ish origins have made it particularly popular with young traders. If you want to transfer five or 10 cents of value for somebody that had written a particularly good blog post, it’s a great and easy way to reward people.
Dogecoin has one of the largest communities on the internet as it was one of the first altcoins in existence created all the way back in 2013.
What started out more as an internet prank has turned into very large and successful cryptocurrencies with a market cap of over $335 million. Dogecoin is also ranking in the top 100 cryptocurrencies.
The other major difference between Dogecoin and Bitcoin is the number of coins in circulation - 100 billion versus 21 million.
What makes Dogecoin different than other altcoins is the practicability to instantly send cash gifts to people, all around the world.
Now, before we go any further, we always recommend taking a piece of paper and a pen to write down the rules of the Dogecoin cryptocurrency strategy.
In this demonstration, we’re going to look at how to buy Dogecoin.
How to Buy Dogecoin
The Dogecoin cryptocurrency strategy takes advantage of the most powerful short-term price patterns. The ORB pattern is defined as a trade taken at a fixed value of the opening range.
The Opening Range Breakout trade is more effective if taken after an inside day that has its daily range smaller than the previous 3 days, which is where the Nr4 stands for. You have three candles followed by another candle with a daily range that is narrower than the previous three days.
*Note: The 4th day doesn’t necessarily need to be an inside day, it only needs to have its daily range smaller than the previous 3 days.
Here is how an actual Nr4 pattern looks like on the Dogecoin chart:
What if we told you that 40% of the time the first trading hour can tell you what is the high and the low of the day? If you know that you can define a trading system around it, you can manage your risk and set your targets.
Basically, you can become a proficient trader.
Like all our trading strategies, we’re going to give you first the trading rules by going through an actual live trade example.
Step #1: Wait until you can spot a bar that has its daily range smaller than the previous three days
The first rule requires you to have patience until the Nr4 pattern develops on the Dogecoin chart. When we have a daily trading range that is narrower than the previous trading ranges, it means that the price is contracting.
Based on our backtesting results, we have found out that there is a high probability of a trend move after you spot this type of contraction. This is kind of a general rule because the markets move from periods of contractions to periods of expansion.
This is the reason why this short-term price pattern is so powerful.
Now, let’s move forward, and outline the next key component of the Dogecoin cryptocurrency strategy.
Step #2: Mark the High and the Low of the 4th day and switch to the 1 hour time frame
Our trade is taken the next day after the Nr4 pattern showed up. In order to have a clear view of the short-term price action, we need to switch our focus to the 1-hour time frame. Before you switch the time frames make sure you mark on your chart the high and the low of the 4th day.
The short-term pattern Nr4 satisfies all the requirements for a valid setup, which means that we can move forward and describe how to buy Dogecoin.
Step #3: How to buy Dogecoin: Buy only if the breakout of the Nr4 high happens during the first 5 trading hours.
We use the Opening Range Breakout technique to time the market and have an effective trade entry. The ORB is even more profitable if it occurs after inside days that have a smaller trading range than the previous 3 days. Here is another strategy called simple yet profitable strategy.
Our Dogecoin trade doesn’t have an inside day, but nevertheless, we want to buy only after we break above the Nr4 day high. We also want to make sure the breakout happens during the first five trading hours of the next day.
Trades based on the ORB – Nr4 pattern will show you a profit instantly.
Now, if the trade is not showing you a profit right away, then your trade becomes more vulnerable. As a general rule, if after the first trading hour your trade is not in the green, you can safely close the trade at the market.
Of course, you can only do that if your stop loss hasn’t been triggered in the meantime.
Now let’s outline where to place our protective stop loss.
Step #4: Place your protective Stop Loss below the Nr4 day low
You can hide your protective stop loss below the Nr4 day low. Alternatively, you can place your stop loss below the current day low as this will give you a better risk to reward ratio.
The ORB - Nr4 pattern tends to precede strong trend day activity, so your stop loss should be rarely hit. Both of these patterns can be traded individually, but when combined, they tend to produce even more powerful trades.
Last but not least, we need to define where we take profits when trading Dogecoin.
Step #5: Take profit at the close of the first 1-hour bearish candle
Our take profit strategy is fairly easy and slightly modified from the original strategy highlighted in the “Day Trading with Short Term Price Patterns and Opening Range Breakout” book written by Toby Crabel.
Although the ORB pattern tends to lead to trend trading days, we’re more conservative and want to quickly take profits. So as soon as the first bearish candle shows up, we close the trade and enjoy our daytrade profits.
Alternatively, you can keep the trade open until the end of the day if you want to extrapolate more profits from the cryptocurrency market.
**Note: Above is an example of a BUY trade using our Dogecoin cryptocurrency 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 – Dogecoin Cryptocurrency Strategy
Our Free Dogecoin strategy is a short term trading method that has simple rules that every novice trader can follow and become a consistent trader. The Opening Range breakout technique is a simple method that takes a trade when the price breaks above or below the opening candle’s high or low. We also have training on how to trade with the Gartley Pattern.
The best short term trades always comes when we have strong trading days and the ORB – Nr4 pattern can capture those expansion days that most traders look to capture.
Thank you for reading!
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Learn more about the Dogecoin NR4 Pattern Trading Strategy, taught by Tim Black, in the video below!