When trading, there is no right and wrong way of trading. Each trader has his own trading style. However, the one goal everyone shares is to capture as much profit as possible while minimizing the risk. A trendy approach to trading is scalping. A crypto scalping strategy aims to open and close a trade quickly. It may miss large price swings, but it chases frequent trades that can add significant value long-term.
This can be beneficial for traders who do not plan to hold the coins for a long time and wish to enter and exit their position quickly. Using this method, traders are not exposed to the risk of a single crypto for long.
The main factor that affects the frequency of trading is the timeframe that you are using while trading. The time frame you use to calculate the buy and sell signals define the style of your strategy.
Coinrule now allows strategies based on technical indicators calculated on the 5-minute timeframe following our Community’s feedback. This allows a more precise analysis of each small price swing, increasing the opportunities the bot can catch.
How to set your time frame?
If you are creating a rule with the objective of trading very frequently, lower time frames are optimal at catching short-term opportunities. Time frames such as the 5-minute or the 15-minutes will work well.
On the other way, if you are building a long-term strategy with the objective of trading less frequently and more significant price swings, hourly or daily time frames may be more suitable.
To learn more about time frames and how to adjust your strategy based on market conditions, this article will come handy.
Using Coinrule’s versatile rule editor gives you the ability to use the time frame that fits your needs better. On top of that, you can add multiple time frames within the same rule if you are looking for more flexibility and more advanced setups. Like how experienced traders look at the price of the same coin from different time frames to have a more extensive idea of the trend, you can incorporate this approach into your rules.
The perfect Time frame for a Crypto scalping strategy
Cryptocurrencies are very volatile and they can experience relatively large swings even in short periods. Technical indicators allow you to get signals based on which the bot will open and close positions. Setting up a rule to calculate a technical indicator in the 5-minutes time frame enables a whole new way to analyse and catch quick price swings.
When you select the 5-minutes time frame, the bot will calculate the indicators based on 5-min candlesticks, reacting prompter than ever to catch more opportunities.
With the 5-minutes time frame you can now create a new set of crypto scalping strategies. It is even possible to mix timeframes and enter based on a bullish signal on a long timeframe, and then set the exit to be a trend reversal on a shorter time frame.
RSI Scalping Strategy
One of the best crypto scalping strategies you can create on Coinrule uses the RSI on a short timeframe to enter and exit a position. This is one of the best strategies in general to catch all the price swings on your favorite coin.
It works well in many different market conditions, returning interesting results in the long-term. You can apply that across all the coins on the market, or on selected cryptocurrencies of your choice. To learn more, you can read this article, where you will also find a specific scenario where it’s ideal to launch such a strategy.
The rule is set up to buy once the RSI is lower than 30, and sell when the RSI is greater than 65. The perfect time to launch this strategy is when the coin is trading within a range, to capture short-term profits, while hedging part of the risk since the coin is in an uptrend.
Try it out now
As Coinrule keeps growing and adding new features to allow more advanced strategies, the new 5-minutes time frame is a powerful new tool available for your rules.
Whether you are a long-term investor or a short-term scalper, having strategies that scan the market on a low time frame is always appropriate to run parallel to others to diversify your portfolio.