What are crypto signals?
Crypto signals are essentially trade recommendations for cryptocurrencies. There are generally 3 types of signals:
- “Buy” signal: This simply means that the service believes that the price of a particular coin is going to go up in the future and recommends that you buy it.
- “Sell” signal: This means that the service believes that the price of a particular coin is going to go down in the future and recommends that you sell it.
- “Hold” signal: This means that the service believes that the price of a particular coin is going to stay about the same in the future and recommends that you hold onto it.
Such crypto signals are usually provided by a subscription service through a Telegram channel (the below screenshot comes from one of the leading crypto signal providers in the market, which goes by the name CryptoSignals.org).
A crypto trading signal looks something like this:
Screenshot of a crypto signal from Crypto Signal’s Telegram channel (Source: Telegram/Crypto Signals)
As you can see, the signal comprises:
- Trading pair: LBLOCK/USD
- Signal: Buy
- Buy-in/entry price: $0.0001576
- Stop loss price: $0.000130
- Take-profit price: $0.000800
- Risk-to-reward ratio: 1:3 (so users can assess how much risk they take on for that trade.)
What this signal is recommending is that you buy the trading pair at the entry price of $0.0001576 and sell at $0.000800 to profit, but just in case price falls, limit your loss with a sell order placed in advance to sell at $0.000130 (because nobody can get it right 100% of the time.)
Users then decide if they want to follow that signal. If yes, they have to go to their own crypto exchange and place that trade (some crypto signal providers, however, enable you to integrate your trading account with them so that the trades are placed automatically by a bot.)
How are crypto signals derived?
There are a number of different factors that go into making a sound crypto signal, including:
- Technical analysis (usually forms the biggest part of the signal, taking into account support and resistance levels, price patterns, and other technical indicators)
- Fundamental analysis, and
- Market sentiment
A good signal will take all of these factors into account and provide you with clear and concise instructions on when to buy or sell.
For example, all technical indicators may point to the fact that a coin will “moon” soon. Coupled with an overall bullish sentiment, a strong “buy” signal may be sent out. But if the signal does not consider the fundamentals e.g. what is the use case of the coin?, there is a high risk the coin’s price will crash in future because it is not backed by any real-world utility.
Are crypto signals suitable for beginners?
Crypto trading signals can definitely facilitate trading for beginners since a big part of the market research is done by experts and compiled into direct trading instructions.
There are a number of different ways to get crypto signals. Some people prefer to follow the advice of expert traders, while others use automated bots that generate signals based on market data.
If you’re serious about making money from the cryptocurrency markets, then you need to find a reliable source of crypto signals. There are a number of different paid and free options available, so you should take some time to research the different options before making a decision.
Once you’ve found a good source of signals, you need to make sure that you act on them quickly. The cryptocurrency markets are highly volatile, so you need to be prepared to make trades at a moment’s notice.
If you’re not comfortable with making trades yourself, then you can always use a signal service that will automatically execute trades for you. These services typically charge a monthly fee, but they can save you a lot of time and hassle.
How to choose the best crypto signal provider?
There are a few things to look for when choosing a crypto signal provider.
Check to see if they have a good track record of accuracy/success rate before paying for a subscription. Like stock brokers, crypto trading signal providers publish their results to increase user confidence and attract new users. The results contain monthly summaries of win ratios. Signal providers with success rates above 50% are considered more reliable.
For example, what are the time frames for their trading signals? If you are a day trader, for example, you will want to look for signals that are issued on an hourly or daily basis. If you are a swing trader, however, you may want to look for signals that are issued on a weekly or monthly basis.
The best crypto signals usually have thousands of group members built up over the years. Having a large community also shows signal provider reliability, since most people will not stick with crypto signals that don’t generate profits for them.
Most crypto signal providers offer both free and paid services; free plans come with a few free crypto signals (usually 3) per week. Assuming the provider is high quality, users will get minimal results from free signals, but just enough to convince them to use paid plans, which offer more signals and boost profit opportunities.
Be wary of providers that offer only free services–this an ironic thing to say, but it may indicate the quality of signals you’re really getting. There may even be a possibility that some of these free services are being paid behind the scenes by crypto projects to shill their coin.
Best crypto signal providers
The best crypto signals are direct and simple-to-understand trading instructions that inform users on which cryptocurrency to buy. They are compiled by professional crypto traders who then share them with their user base through email or social messaging platforms like Telegram and WhatsApp.
Here are some of the most popular:
Cryptosignals.org shows users the risk-to-reward ratio and suggests how much a person can spend per trade, making it one of the best crypto trading signals providers for novice traders. It was launched in 2014 and since then has recorded a win rate of 82%.
Users can choose between a free or premium plan. The free plan offers 3 VIP crypto quality signals per week, while the premium plan offers 2-3 crypto quality signals daily and starts at 48 euros. However, there are discounts on all other plans. Paid users also get a full technical analysis of the trade signals.
2) NFT Signals Telegram group
NFT Signals’ Telegram group provides trading cues for NFTs. It has amassed over $100 million in group profits from NFT trading. It contains 3,000 active users in its free Telegram group, where users get up to 3-5 NFT signals per week.
NFT Signals also has a VIP package where users get 3-5 trading signals per day alongside tips on upcoming mints. In addition, its Discord server is dedicated to customer support. Subscribing to the NFT Signals VIP Telegram group starts at $56 per month, while the annual plan costs $277.
Learn2Trade is a cryptocurrency trading signals provider that boasts of traders with over 15 years experience and a success rate of over 76%. The platform offers technical analysis and trading tips to its community of over 70,000 active traders.
Learn2Trade has both free and premium Telegram services. The free Telegram service offers up to 3 free crypto signals weekly, while premium users get up to 5 crypto quality signals daily. It also offers plenty of learning materials for users who want to improve their trading skills.
CryptoHopper is not in itself a crypto signals provider, but rather an aggregator that links traders with the best crypto signals available. It also automates trading on behalf of its customers through an integration feature with the user’s own trading account.
Users can select from different signal providers who offer both free and premium services. Users can also customize the cryptocurrency signals they receive, thus influencing how their orders are executed. CryptoHopper has over 500,000 users.
Do crypto signals work?
No, crypto signals are not guaranteed to always be accurate. However, they can still be a valuable tool for making money in the cryptocurrency markets.
In general, the best way to use crypto signals is to combine them with your own research. This way, you can get a better idea of where the market is headed and make trades accordingly.
At the end of the day, crypto signals are just recommendations. Ultimately, it’s up to you to decide whether or not to act on them.