TIMESTAMPS
00:01 – INTRO
00:36 – UTILITY
If trading cryptocurrency is your primary domain, and Bitcoin’s volatility slows down, altcoin trading can be quite lucrative.
Altcoins, known for their heightened volatility, serve as a good alternative to capitalize on trading opportunities.
In the dynamic realm of altcoins, where opportunities and risks abound, having a dedicated trading strategy becomes essential.
In this series, you will learn the key elements of the altcoin strategy, designed to trade opportunities and manage risk effectively.
Our approach to trading altcoins mainly focuses on Day and Swing trading.
We employ straightforward technical analysis and have created a simple, yet effective strategy for trading altcoins.
01:31 – IMPLEMENTATION
Even in the absence of any movement on Bitcoin, there will be an altcoin that has experienced significant volatility in the past 24 hours.
To identify these altcoins, you can utilize Bybit’s Market Overview page, examining the transaction volume along with the percentage movement over the last 24 hours.
When identifying potential new altcoins of interest, our focus lies on reviewing both the percentage change and the transacted volume over the past 24 hours.
🔎 02:08 Here is a visual of Bybit’s Market Overview page and accompanying explanation.
By consistently repeating this process, our altcoin watchlist evolves steadily, resulting in a solid watchlist of altcoins to closely monitor.
This doesn’t imply that we conduct in-depth analysis for all these assets regularly.
Instead, we regularly scan through our watchlists, making brief notes on potentially intriguing altcoins.
We may revisit them later, conducting thorough analysis after completing a comprehensive review of the entire watchlist.
Typically, we then narrow our focus to approximately 5-10 altcoins for in-depth analysis.
As we delve into this process, a few more altcoins are filtered out, ultimately leaving us with a selection of 3-5 altcoins that capture our interest for potential trading setups.
Among the remaining altcoins, we adopt a simple and systematic approach to identifying setups of interest.
By following a specific order of proceedings, we adhere to correlations rooted within the cryptocurrency market.
Given that Bitcoin is the largest and most renowned asset in the crypto market, we start the process by conducting a thorough analysis of Bitcoin.
This in turn, enables us to establish a bias and gain insights into the probable direction of Bitcoin, ultimately allowing us to draw conclusions on an altcoin’s direction.
Moving forward, we conduct a comprehensive analysis of Ethereum, considering it is the largest altcoin that exerts influence over the smaller-capitalization altcoins.
Upon completing this process, we attain a comprehensive bias, aiding us in determining whether to look for long or short positions on smaller-cap altcoins.
We avoid counter-trading our bias on Bitcoin and Ethereum.
Instead, we prefer setups that align with our analysis for both BTC and ETH.
In our swift review of the watchlist, our primary focus is directed towards Market Structure and price location.
We assess whether an asset is in the middle of a range, trending, or undergoing a significant retracement, offering potential for participation in the move.
🔎 05:53 Example: Middle of the range
🔎 06:21 Example: Significant Retracement
🔎 06:51 Example: Significant Move
Next, we identify key levels on the HTFs, such as Monthly’s, Weekly’s and Daily’s.
Then, by drawing out HTF Fixed Ranges we try to pinpoint confluences of HTF levels with value area extremes, such as VAH or VAL.
The POC only grabs our attention when it aligns with another significant confluence that we find intriguing.
🔎 07:48 Practical Example: ARPAUSDT
Now, we examine nearby liquidity around the pre-identified confluence area.
As an extra layer of confluence, we review Exocharts and explore potential nearby naked POCs.
While not always mandatory, this step contributes to our overall confluence analysis.
To complete our confluence analysis, we incorporate Fib Retracements, such as the CC or the 0.25 range, in the final step.
After pinpointing a solid level of confluence, we must assess the trade’s viability using the Risk-to-Reward tool in TradingView to ensure it is a worthwhile opportunity.
We can then place alerts and patiently await the activation of our designated levels.
🔎 10:07 Example: Risk to Reward Tool
BEFORE entering position, we must proactively acquaint ourselves with the coin we are trading and estimate the correct position sizing for our risk tolerance.
This involves utilizing the limit feature on Bybit to determine the appropriate position size required to uphold a 1% portfolio risk.
10:56 – TIPS & TRICKS
★ Engaging in altcoin trading is advisable only after acquiring sufficient experience in trading Bitcoin.
★ This is tied to understanding the crypto market correlations and developing a solid grasp of Bitcoin dynamics beforehand.
★ Avoid overcomplicating altcoin trading by steering clear of excessive and intricate tools.
★ Given the relatively low volume of altcoins, opt for straightforward, yet highly effective tools.
★ The percentage moves in altcoins surpass those in Bitcoin and therefore Risk Management must be implemented.
11:45 – FINAL THOUGHTS