Cryptocurrency trading has created countless millionaires and billionaires. Many of these traders use crypto signals to aid their trading. This overview shows the three main types of crypto signals, their applications and profitability.
What are Cryptocurrency Signals?
Cryptocurrency signals are forms of guidance that inform a crypto trade. Cryptocurrencies have price movements, like stocks. You can gather information from the cryptocurrencies to inform your trades and make better decisions. These signals can come in many forms. Signals can be very powerful tools for those looking to learn more about crypto trading.
Types of Crypto Signals
There are three main crypto signals that traders use: trading bots, copying trades from experienced investors and technical indicators. Trading bots are programs that are coded to read the price of cryptocurrencies and automatically trade the crypto based on parameters set in the code. For instance, a trading bot can have code that tells it to buy when the price drops and sell when the price rises.
Copying the trades of experienced investors is also a crypto signal. An experienced trader will notify a group of investors, telling them the trades they are making. The investors in the group can then use this information and make their own trades accordingly. The members of the group rely on the expertise of the trader giving the trade ideas.
Last, you can read technical indicators of cryptocurrencies to inform your trades. Look at indicators like the moving average (MA), relative strength index (RSI) and average directional index (ADX). Reading these indicators can provide you with insight into the price movements of a cryptocurrency. While there are many different types of indicators, trading bots, copying trades and technical indicators are the most used signals.
Best Apps for Crypto Trading Signals
There are many apps and groups that provide crypto signals. However, not all of them are good. Here are some of the better apps that can provide helpful signals to investors and improve their trading strategy.
- Social Investing
Best for social trading: eToro
eToro offers a unique feature called Copytrader. It allows traders on the app to find featured traders and information about their returns and past trades. Once you have funded your eToro account, it is very easy to begin looking for traders to copy.
There are many traders with different risk tolerances to choose from, so make sure you select a trader you’re comfortable with. With just the click of a button, you can begin to copy their trades. The process automatically copies trades of the selected featured investor. The service is completely free and a great way for beginners to study the trades of more experienced investors. Traders who are copied also receive payment for their services as part of the Popular Investor Program.
- copy trading investors
Best for cross-platform use: Cryptohopper
Cryptohopper allows you to connect to 9 different global exchanges to support cross-platform trading. It connects the exchanges to offer the best pricing and most up-to-date signals. It offers a variety of signals, including automatic trading and mirror trading. These signals can be applied in the app to exchanges such as Coinbase and Binance. You don’t have to go to exchanges directly to execute the signals — Cryptohopper connects the exchanges to the interface and allows you to make trades directly through its app. The service is almost entirely free and allows you to learn from experienced crypto investors. Not many services allow users to connect exchanges, let alone the added benefits of numerous signals.
- Performance Tracking
Best for automated trading: Altrady
Altrady is a program that allows you to automate your trades with its smart trading feature. The program tracks both common and advanced indicators and automatically makes trades. You can also customize your risk tolerance and the types of trades you want to execute. The service makes automatic trades under guidelines set by users. It also has scanners that can provide quick information regarding sudden changes in the market.
Using the program is very simple. Just download the software, connect an exchange and start the smart trader. The smart trader is a great tool to understand how coding and programs can assist traders.
Are Cryptocurrency Signals Profitable?
Cryptocurrencies are extremely volatile, and it is nearly impossible to guarantee profitability. However, signals can help you make informed decisions. Signals can show you where opportunities currently are in the crypto markets. This can help increase profitability but cannot guarantee a trade will be profitable.
Each signal has its own limits. Copying other traders has human error — the trader you are copying can make a mistake. Trading bots can fail to understand a specific situation with a currency and make a mistake. While signals can provide you with the necessary information to make trades, there is no guarantee the trades will make money. It is possible to lose money relying solely on signals.
Cryptocurrency Price Movements
September 2021 has shown a great deal of volatility in the cryptocurrency world. Currencies such as Ethereum and Cardano have approached all-time highs but also saw drops of over 30%. Prices change every day, and nobody knows where prices will go.
While some say crypto may be entering a bear market, others view the drop as a minor setback. Either way, the increased volatility is defining the current market. Volatility provides opportunities to profit but can also lead to severe losses. Make trades with a calculated approach to mitigate risk.
Should You Use a Crypto Signal App?
Crypto signal apps can be great tools to learn more about cryptocurrency and make informed trades. There are many options to choose from, ranging from automated traders to copying trades from experienced traders. However, using signals does not guarantee profit. It can increase your chance of profiting, but there is still a likelihood of losing money as a result of signals. If you are able to tolerate the risk and want to learn more about cryptocurrency, using a signal app is a great option.
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About Caden Pok
Caden has been involved with crypto since 2018, when he began investing, trading, and mining tokens. He took part in undergraduate research studying cryptoeconomics at the University of Michigan, where he will graduate Phi Beta Kappa with a bachelor’s in economics in 2025. He is experienced with DeFi technology and multiple blockchains, currently investing in Ethereum and Bitcoin.