Cryptocurrency Trading Strategies – Technical Analysis, Position Sizing, Crypto Trading Plan Rules

What is position sizing in crypto trading? When do I enter into a crypto trade? How do I determine a coin buy price? When to sell cryptocurrency for profit?

Cryptocurrency Trading Strategies

Technical Analysis, Position Sizing and Crypto Trading Plan Rules

In crypto trading, how much of any one coin should I buy at a time?

Figure out the total amount of capital allocated to crypto, and then the total amount you plan to invest in specific types of coins. For example a general ‘safe’ crypto portfolio might look close to graphic on the right.

Thus if you have a total of $5,000 to spend in cryptocurrency trades, you might consider a portfolio like $3,000 in BTC, $1,000 in ETH, $500 in LTC, and $500 in speculative plays.

65% Bitcoin
25% – Alt Coins Over $1B Mkt Cap
10% – Speculative Alt Coins
crypto portfolio

Example Crypto Portfolio
Make your own

When you are just starting out, you’ll make a lot of mistakes and the global crypto market will turn against you. Because of this you’ll want to keep each crypto trade relatively low compared to the total amount of holdings, perhaps in the neighborhood of 1 to 3%.  1% of $5,000 is $50, so that’s a good starting point in this scenario.

Now that you have established your crypto order size, you’ll want to figure out your total coin position size. Say you want to buy a low market cap coin like BitBean. Since your trading rules dictate that only 10% should be in speculative plays, you have a maximum of $500 to work with. Say of that $500 you might want to add 4 other coins, so in total you have $125 you can allocate here.

So If each order size is $50, you buy BitBean twice and still have a little bit left over in case the market turns.

How do I know when to buy an altcoin? What should my entry price be relative to the current crypto market price? 

You should have at least three indicators line up before placing an order to trade crypto. The more the better. For example here are some common signals we look for:

Say you have been watching BitBean (BITB) and like the crypto fundamentals of the coin. You plan to hold it long term since it can be staked. You notice three signals are all converging in the last 24 hours. You confidently buy 1/2 of the total amount now using a market order.

Just in case it takes a dive, you also place a sell stop below the clear support line, as well as a limit buy below well below that. That way you are covered if it goes down you will automatically buy more at a cheaper price.

For your other buy order, you place a buy stop above the resistance line. That way if it breaks to the upside, you’ll capture the gain at a lower risk.

BitBean Crypto Technical Analysis

I bought a cryptocurrency that now has big gains! Should I see if the price keeps going up or sell? If so how much?

bitbean analysis

First off, great job! Your personal trading plan should again dictate the points in which you take profit from crypto trading. Think about developing this over time and write it down as you gain more experience. Check out these example crypto trading rules on the right to get a better idea.

Say you bought about 30k BitBean at 34 Satoshi. Now the price has risen to 101 Satoshi, 193% higher than your original purchase price. You can confidently sell 1/3 of your holdings in order to recover the amount of BTC you originally spent. Each crypto sell order should follow the same trading rules used to buy, or 1-3% of your entire portfolio. In our scenario that means you can place two orders equaling about $60 each. Once these have filled, you have recouped your original cost basis – congratulations! Give yourself a well deserved pat on the back.

TrackACoin’s Crypto Trading Rules

  1. If a coin’s price reaches 100% or more from purchase, start placing limit orders or sell stops in order to cover cost basis.
  2. If a coin’s price reaches 200% your should have sold enough that your cost basis is now zero and you can let the rest ride.
  3. If you are still bullish on the coin, place some low-ball limit orders at key support levels in case it dips. This is a good time to also log your orders on TrackACoin’s open order price tracker.

You now have flexibility of doing whatever you want with the rest, since you have already made a small amount of profit. Some strategies could be as follows.

  1. Holding the rest of your crypto in a personal staking wallet and earn more crypto over time.
  2. Placing additional limit orders well above the current price (think 500-1000% crypto gains).
  3. Place limit buy orders just above the last coin support line, so you can rinse and repeat!

Why do we recommend placing limit buys above support? If a coin breaches a clear support level, it will typically drop much farther below that line until it finds the next level of support. That’s why we recommend placing many small orders to buy, so you don’t get stuck at one price level and spread out your risk.

Become a crypto professional by tracking your trades

If you are not currently a registered user of this platform, we invite you to get started today. It’s a great way to organize your crypto holdings and make educated trading decisions.


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