Privacy is important even though you don’t have anything to hide. If you want to embrace privacy and anonymity truly, then our Monero trading for beginners guide will give you a full in-depth analysis of the world’s biggest privacy coin. Monero is among top privacy coins in 2019, if not the best cryptocurrency that offers anonymity.
Our team at Trading Strategy Guides is working hard to put together the most comprehensive PDF guide to different cryptocurrency strategy. Previously, we have covered the pump and dump strategy for trading the Bitcoin cash which is regarded by many fellows in the crypto-community space as being the real bitcoin.
If you’re looking to build a diversified cryptocurrency portfolio, then you need privacy coins to HODL for the long-term. There is a tremendous amount of value in hodling the Monero privacy coin. You need to appreciate the role and the function Monero has in this entire ecosystem. In our current society privacy has eroded quite a lot and there is a need and a place for the use of privacy coins in the future.
Our Monero trading for beginner's guide can be tremendously useful in these scenarios where you have authoritarian governments around the world. Because of these political uncertainties around the world, the demand for the privacy coin will rise and, subsequently, the price will also increase. Also, read about Personality Strengths and Weakness in Forex Trading.
Moving forward, we’re going to outline what are privacy coins and highlight some basic rules for trading our Monero cryptocurrency strategy.
Monero Privacy Coin – What are privacy coins?
From a technical perspective, a privacy coin is a cryptocurrency that keeps you anonymous when you’re transacting on the blockchain network.
If you want to understand what a privacy coin is and how Monero privacy coin works you only need to grasp one three simple concepts:
- Privacy coins are an attempt to try to protect the senders and receivers of money.
- Safeguarding the amount that was sent between those two parties, so nobody knows how much value was being transferred.
- Can’t track back all of the transaction histories
Let’s start by looking at what Monero is and where Monero coin is in the marketplace and see how well it does against some of the other privacy cryptocurrencies.
Monero is proof of work coin just like Bitcoin, but it has a different codebase based on the CryptoNote protocol, and it also uses a different mining algorithm. Monero was first released in early 2014, so it has been around for quite a while.
Judging by its market cap, Monero is the 11th largest cryptocurrency as of writing this article. All other privacy coins similar to Monero, like Zcash, Verge or Dash are positioned well below Monero.
Now let’s see how you can efficiently trade with the Monero cryptocurrency strategy and how to make consistent profits trading the cryptocurrency market. Here is another strategy on how to make money trading.
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Monero Cryptocurrency Strategy
To trade our Monero cryptocurrency strategy, you’re going to need to use a technical indicator that proprietary traders often use it.
The only indicator you need is:
The Donchian Channel indicator was developed by Richard Donchian in 1950 and was used for commodity prices and stock trading. Because it’s a universal tool, you can trade any instruments you wish from Forex currencies, metals, bonds, and even cryptocurrencies.
The Donchian Channel is a powerful trend-following indicator that has been successful in pinpointing the market trends and has stood the test of time.
How does the Donchian channel work? It's pretty straightforward.
When the price trades between the middle line and the top of the channel, it tells you that the trend is going up. When the price trades between the middle line and the bottom of the channel, it tells you that the trend is down.
Now, before we go any further, we always recommend taking a piece of paper and a pen and note down the rules of the Monero cryptocurrency strategy. For this demonstration, we’re going to look at the buy side.
Step #1: Price needs to trade between the upper and the middle bands for 10 consecutive days
Before a new trend is established, we want to make sure we have a correct reading of the price action. In this regard, we give the market more room to develop the trend.
For a trend to develop, in our books, we need the price to trade between the upper and the middle bands for at least 10 consecutive days.
Note* during this time we don’t want to see the price penetrating below the central band. If we break below the middle band even for a brief period, we skip the trade setup.
The 10 candle rule is very important if you want to trade high probability setups.
Before pulling the trigger on our trade, it’s critical for one more rule to be satisfied.
Step #2: The price needs to consolidate in a range during the 10-day candle period
During the 10-day candles period, the price also needs to move in such a way that we can encapsulate the whole price action into a rectangle. In other words, we want the price to stay in a tight range.
When we see price consolidating or moving in very precise trading ranges, this often means that the smart money is accumulating their big positions. Of course, this needs to be put in the right context in order to anticipate the direction of the breakout.
The rectangle pattern draws special attention to the bull and bear battle that goes on and on in the market. If we place the rectangle pattern in the right environment, we can have an accurate read of who is really in control of the market.
If you know who is in control of the market, you can then anticipate the next swing wave.
The Monero coin is displaying the same kind of rectangle pattern that often leads to significant movements in the market.
The cryptocurrency Monero satisfies both of our trading conditions which mean that we can move forward and outline what the trigger condition for our entry strategy is.
Step #3: Buy at the market at the opening of the 11th candle
When to buy Monero is quite easy to follow with our Monero cryptocurrency strategy.
We buy Monero coin at the market precisely at the opening price of the 11th candle. Alternatively, you can wait for a break above the rectangle resistance to buy Monero. Of course, the second entry method is more conservative, but it’s worth adding one more condition to your trade triggers if this brings you more comfort.
Monero is still among the top privacy cryptocurrencies despite trading below its all-time high we still believe in its potential. After all, Monero wasn't named in vain the best privacy coins 2017. There are new privacy coins that want to compete with Monero, but there is a long road ahead and the top spot is hard to steal.
The next important thing we need to establish for our cryptocurrency strategy is where to place our protective stop loss.
See below …
Step #4: Place protective Stop Loss below the middle band of the Donchian Channel
Hide your protective stop loss below the middle band of the Donchian Channel.
If we’re developing a bullish trend, then the price should not break below the middle band which is the reason why this is such an excellent place to hide your stop loss.
Last but not least, we also need to define a take profit level for buying Monero.
See below …
Step #5: Take Profit when we break and close below the middle Donchian band
The middle band is the line between the bullish trend and the bearish trend.
The Donchian channel strategy does a great job of keeping us riding the trend for as long as possible.
When the price breaks and closes below the middle band that’s the first warning sign that the trend is about to reverse. This is also the moment we want to cash out our position.
Note** the above was an example of a BUY trade using the Monero 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 - Monero Trading for Beginners
The cryptocurrency Monero has all the qualities to be adopted as the only true privacy coin. Monero also has a dynamic block size which is pretty cool from a scalability perspective. Monero was also the first privacy coin that really got mainstream adoption within the crypto space.
We hope that our Monero trading for beginner's guide will help you adopt anonymous cryptocurrencies into your crypto portfolio. The Monero cryptocurrency strategy will pinpoint accurate entry levels to buy Monero. Interested in trading other altcoins? Read our the best cryptocurrency 2020 article.
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