Believe it or not, there are things to know before the crypto market opens on Monday, Tuesday, Wednesday, Thursday, etc.
These are things I wish I knew before day trading because it would’ve made my whole journey easier.
But better late than never right?
You could say the same irrespective of the level of knowledge and experience you have in trading.
These are tips for day or swing trading that’ll give you an edge in your trades.
And more than that, these tips are culled from my personal experience.
That means they’re practical steps towards profitable trading.
They’ll save you the time, energy, and resources you’ll put into trading.
So here are important things to know before the crypto market opens today.
Top Things to Know Before the Crypto Market Opens
It’s true the crypto market runs 24/7, unlike the Forex market.
As such, you’ll still be able to take a trade on Friday by 11 pm and even 5 pm on Saturday and Sunday.
Nonetheless, changes occur within the market at certain times.
These changes are peculiar to that hour of the day, week, or month.
Here’s what I mean:
New hourly, daily, weekly, and monthly candles will be created.
We can say it’s the most significant time of the day, week, or month based on specific opens and closes.
That being said, here are the top things to know before the crypto market opens each day.
- Daily and weekly pivot levels.
- Daily and weekly candle closes.
- Fundamental news in the crypto and forex markets.
- Closes on daily trades.
- Trading and confirmations.
What does each of these entail?
Read on to find out!
1. Daily and Weekly Pivot Levels:
Support and resistance levels are areas of value you need to know.
An area of value is a level price that has the highest potential of reversing upon reaching it.
You’ll need to know how to draw these levels correctly as a new trader.
But if you get it wrong (which you will every now and then), you might pay dearly in losses.
Now even professional traders miss out on these levels despite how much their eyes are trained to spot the same highs and lows.
They either miss out on the levels by a margin or get the levels right only to adjust them later.
Read Also: Best Way to Trade Multiple Timeframes Alignment in Crypto
Here’s what happens:
Your brain keeps telling you price hasn’t breached the line yet when it clearly has.
But all of these can be avoided.
It’s by using a pivot point indicator that will automatically map out the intraday and weekly levels for you.
The intraday levels in crypto are renewed at 1 am (UTC+1) daily.
And that means you can simply use a trendline or horizontal line to mark out the levels indicated by the pivot.
Weekly pivot points are renewed every week.
As such, you can look forward to new levels on your Bitcoin, Ethereum, Solana, Matic, etc. chart every Monday morning.
There’s also the monthly pivot that is launched every new day of the month.
What am I getting at?
You don’t have to spend hours adjusting horizontal support and resistance lines.
And neither do you have to play a fast one on the market by adjusting lines after price has obviously breached a zone.
Simply use the pivot tool to know which areas to long and short from.
This will allow you to focus more on mapping higher highs and lower lows or generally diagonal key levels.
So, how can you use the pivot indicator?
Read on to find out.
How to Trade Pivot Point Indicator with Crypto
Here are simple steps that’ll enable you to trade with the pivot indicator.
1. Enable the Pivot Point Indicator:
Pivot point trading can be done on any platform of your choice.
Tradingview is a good example of such platform.
It is a web and mobile application that is simple to use. That’s because it has an interface that’s easy to navigate.
You can use the platform for technical analysis.
Here’s how to add Pivot Point to TradingView:
- On TradingView, search for ‘Pivot’ among the indicators.
- Add Pivot Points Standard to your favorite indicator panel.
2. Mark Out Levels:
You’ll have to map out Intraday, weekly, and monthly pivot levels.
Here’s how to do it:
For intraday levels,
- Goto the 15 minutes (15m) timeframe.
- Select the indicator settings’ gear button.
- Click on the tab, Inputs, and set the indicator’s timeframe to ‘auto’
- Choose the number of prior pivot levels to display using the option ‘Number of pivots back.’ I often use three previous levels.
- Click on ‘Ok’ to save your changes.
- Goto your chart and map out levels close to the current price action. It could just be three or four lines. Price may trade around these lines throughout the day.
- On the same 15m interface, change the ‘Pivot timeframe’ to weekly and then outline the levels.
- Finally, you can change the input settings to monthly to outline the levels.
Keep in mind that you can navigate to other timeframes such as 4h and 1D to outline the auto levels.
1m, 3m, 5m, and 15m have the same pivot points.
Whereas 30m, 1h, 2h, 3h, 4h, 6h, 8h, and 12h timeframes have similar weekly levels.
You’ll be presented with monthly levels on 1D, 2D, 3D, and 4D timeframes.
These levels can be gotten right from the 15m timeframe using the ‘Monthly’ option.
This means you don’t really have to move to individual timeframes.
How do you use each of these levels?
Check the next section.
3. Trade the Pivot Lines:
The pivot lines you’ve drawn will act as support and resistance during the day.
Other traders will be watching these levels.
Hence, when two levels intersect, it’ll act as strong support or resistance.
For instance, there might be an intersection of the intraday and weekly pivot to form a zone.
Price will stall around this zone, which makes it ideal for profit taking or waiting for its breach before entries.
Here’s an example on a Bitcoin/USDT 15-minute chart.
Price hovered around the confluence of intraday and weekly pivots.
There could also be a confluence of the weekly and monthly levels.
Pivot Support and Resistance
On the intraday levels, you’ll be presented with pivot levels P, S1, S2, and S3.
There are also R1, R2, and R3 levels.
The S regions are support levels while the R are resistance levels.
Price trading above P shows bullish sentiment while below P is bearish sentiment.
Thus, wait for candle closes above P or R levels to make a long entry.
You can also go short when price trades below P and S levels.
In either case, your stop loss should be in place.
For longs, place a stop below the lows of candles in a range or the pivot level you made your entry.
For shorts, these stops can be placed above the highs of the range or above the pivot level.
Here’s an example on the same BTC/USDT chart used in the example above.
You could’ve longed from that strong support since it intersects the weekly and daily pivot (P).
A stop would’ve been placed below the support zone and profit target set at the next pivot resistance R1.
Nonetheless, taking a long isn’t ideal since price breached a rising channel.
The channel is being retested and if it fails to breach, price will try to breach support as well.
Therefore, you should wait in anticipation for a long, only when the price closes above the diagonal trendline.
Or prepare to take a short once the support zone is breached.
All of these can be called day trading with pivot points and price action.
A few hours later price broke both the intraday and weekly pivot.
As such, it pays off to be patient and wait for that confirmation.
Given that price has already entered the S1 zone, it could decline all the way to S2’s support.
2. Daily and Weekly Candle Closes:
Do you know you could almost tell whether it’ll be a bullish or bearish day from the previous day’s price action?
You most definitely can!
Past performance can influence the market’s future performance.
For this reason, you also have to analyze what the market has done to predict what it could potentially do.
Here you’ll be using candlestick and pivot point trading to your advantage.
The section below explains it all.
How to Determine Market’s Direction Using Previous Closes
Here’s how to predict the market’s direction using previous open and closes.
1. Check the Closes on Various Timeframes:
Study the candle closes on different timeframes. This should be based on your trading strategy.
You’ll focus on the M15 timeframe as a scalper to know what could happen on lower timeframes.
A swing trader could make do with the H4 or H1 timeframe.
After selecting your ideal timeframe, your task would be the following:
How did the previous candle close?
Is it lower than candles in a range, higher, or did it maintain the range?
Now if the candle traded lower, it’s possible prices will keep tanking the next day. And if it closed higher, price may keep rallying.
On the other hand, you can expect sideways movement if the preceding candle didn’t breach the level.
The same technique can be used to determine the market’s direction for the week or month.
Check the Bitcoin/USDT 1-month chart below. Three scenarios have been highlighted.
In October 2021, Price failed to close above resistance around $63,094.
That hinted the same range might be maintained in November 2021. Which is what happened.
Although price rallied above the high of October’s candle, these highs were unsustainable.
Both candles ended up creating a bearish harami pattern.
The candle completed an evening star formation.
But what was more peculiar is its close below support.
The next few months candle traded below that support and struggled to trade above it to no avail.
It doesn’t come as a surprise since this is a monthly timeframe. If price took 30 days to form a candle, it might take 30 days or more to breach it.
Even within a range candles can still break out.
April 2022’s candle closed below that of January, February, and March 2022.
This resulted in lower prices to the $25,000 level.
Now that level is acting as support not unless there is a close below it. If that happens, another plunge in price can be expected.
Keep in mind that these are merely speculations. The market could go in the opposite direction the next day due to fundamental factors.
It could be because Bitcoin is rallying upon news of an adoption, hence alts follow.
Or it might be the altcoin will undergo a burn or halving.
An instance is the case of Luna, a crypto asset that tanked over 1000 percent upon news of security issues.
This is an asset that rallied during a bear market.
And even though its daily, weekly, and daily candles were bullish, it still sunk significantly.
2. Check the Two Weeks Chart:
A good way to determine how the rest of the month will perform is by looking at the two weeks chart.
It’s the closest to the monthly timeframe.
Hence, if you don’t want to wait 14 more days before the monthly’s close, you could take dressing from this timeframe.
3. Fundamental News About the Crypto and Forex Markets:
News can influence price’s performance during the day.
That’s why you could spend a few minutes daily checking top crypto sites if there is news of such kind.
These sites may have also analyzed trading pairs.
As such, you might find their analysis useful.
How do you begin? Do the following:
1. Bookmark Top Crypto News Websites:
Be wary of fake news in the crypto space.
That is why you should only use platforms that have consistently posted legit content.
CoinTelegraph, for instance, gives weekly highlights on Bitcoin, Ethereum, and other top cryptos.
Their analysis hints at the market’s direction for the day.
Hence, check it out.
2. Check Crypto Aggregators:
There are crypto news aggregators that’ll make your fundamental analysis an easier one.
Theaw websites have accumulated news from various websites, which means you’ll be more informed during the day
Some top crypto news aggregators include:
Check them out.
3. Use Forex Analysis Tools:
You can take your fundamental analysis one step further by checking out what’s happening in the Forex or stock market.
Chances that the performance of these markets will also have an impact on BTC are high.
Accordingly, FXStreet is a good place to start.
This web and mobile news app shows you the dollar’s (USD), Euro’s (EUR), etc. volatility for the day depending on upcoming events.
Given that you’re trading Bitcoin against the US dollar, news pertaining to USD is worth reviewing.
An instance is the interest rate hike between March and May 2022.
This news was able to lead to falling prices in the crypto market.
Federal Reserve Chairman Jerome Powell’s speech is also another key event that also causes high volatility in the market.
I’ve found FXStreet useful and so might you.
Download the FXStreet mobile app on Google Play or Apple Store.
Keep an eye on the app’s calendar section since that’s where you really want to pay attention.
News is ranked based on its potential impact on the market.
Colors such as green, yellow, and red are used for this ranking.
Green hints the news might not impact price significantly, while yellow or red hints that it might.
Read the events and how they might impact the dollar.
Then note down the actual time such news will occur in real-time.
4. Closes on Daily Trades:
Irrespective of the direction you choose to trade, you should be prepared to close trades before the next day.
This isn’t a must but it’s especially useful if you’re a scalper or day trader.
What’s the benefit?
You won’t be exposed to overnight risks.
These risks could stem from bearish news about the market such as security breaches, rug pulls, and so much more.
Opening and closing trades daily begins with setting your profit target for the day.
This also means that if your profit target is hit within two minutes or ten hours after opening the trade, you’ll leave the market.
You won’t keep trading because you’ve already met your day’s trading goal.
Is your goal to make just $100, $1000, or $100,000?
The most loss for the day should also be determined to ensure you stop trading once that limit has been hit.
What all of this does is discipline you as a trader. And discipline is how you become profitable consistently.
It may also be useful to protect your open profits with a stop.
This will ensure your efforts during the day are not thwarted by a sudden change of event.
The tips outlined above are trading strategies I employ as a scalper.
I hold my trades overnight less often.
The only reason I hold trades is if I notice the market condition hasn’t changed from when I went long or short.
Nonetheless, the profit and losses target ensures I don’t stay in the market too long.
5. Trading and Confirmation:
Have you ever entered a trade or closed one only to realize it’s a false break?
Has your stop-loss been hit only for price to rally 10%, 20%, and even 50% to your target?
This and many more have happened to me repeatedly.
What did I do?
As a scalper, I began making reference to higher timeframes for confirmation.
If there’s a breakout on 5m, I’ll sit it out until the 15m or M30 timeframe confirms it.
And that’s when the candle on that level closes below or above the level.
This strategy is called multiple timeframe analysis.
You’ll draw confirmation from higher timeframes and make entries or exits using lower timeframes.
This method can be effected using a factor of 4 to 6.
Simply multiply the value of your current timeframe by 4 or 6 and you’ll have the ideal higher timeframe to use.
Here’s an example:
If you swing trade using H1, your higher timeframe is H4 or H6.
That’s because 1 multiplied by 4 or 6 gives you one of these timeframes.
Here’s an example of a false break on the BTC/UST 15-minute chart.
A higher timeframe such as H1 would’ve helped you avoid taking the trade since price rejected the level at the candle’s close.
Here’s what the H1 chart looks like:
These false breaks can also be spotted on other chart patterns like ascending broadening wedge, descending broadening wedge, and falling channel.
Frequently Asked Questions
Here are answers to some frequently asked questions.
1. What is the Best Time to Day Trade:
In my opinion, no specific time is ideal.
That’s because a particular hour may be ideal for one trader but not suited for another trader.
You just have to trade between hours that you’re most comfortable and relaxed.
It’ll help you make the most profit since trading requires critical thinking.
Do you think better when you’ve just woken up and before work?
Or do you think better at your most active hours?
Give it some thought!
How do I do it?
I open trades after a goodnight’s rest when my brain is fully alert and the stress of the day hasn’t mounted on.
Everywhere’s quiet at this time and I can think better.
I’ve not also stumbled on other traders’ analyses which could make me biased with mine.
The market is also not too volatile within these hours.
Now volatility is not bad but too much of it could work against you.
And too little could cause whipsaws or you holding trades longer than you should.
It all boils down to the hour that helps you trade better and when the market’s movement is predictable.
2. How to Day Trade with Little Money:
It’s possible to day trade with little money especially if you’re just starting out.
You can either trade spot or dive into futures trading if you have the required skill.
Bitcoin futures either USD-M or Coin-M allows you to trade with as little as $2.
If you can gradually build on this amount, your profit will compound.
Exchanges like FTX, Kucoin, and Coinbase also allow you to trade with small amounts.
At the end of the day, decide on what amount you’ll use.
3. When Does the 4-hour Candle Close?
The 4-hour candle closes in the crypto market around 1 am, 5 am, 9 am, 1 pm, 5 pm, and 9 pm (UTC+1).
That means you should expect candle closes around 1, 5, and 9 during the day and at night.
You won’t go wrong if you also expect a new candle to open around these times.
There are various things to know before the crypto market opens.
But the listed above day trading tips are what I pay the most attention to before opening trades daily.
They may seem like a lot but when you master each with time, it won’t be a hassle.
It takes me around 30 to 40 minutes to go through all the steps before taking a trade.
And it’s definitely worth it.
All of these combine to tell me the best direction to trade and when to leave the market.
Call it a checklist of things to do before even taking a trade.
The ball’s now in your court. Try these out!