How Crypto Signals Work and Why They Can Be Helpful
There are lots of crypto signals out there. For the uninitiated, there are services that you sign up for. In exchange for an email address (or some money), you’ll receive buy and sell recommendations. And some of them even work… you know, sometimes.
Despite the iffy record some crypto signals have, they can still be useful for a couple of different reasons. For starters, they can take the guesswork out of investing. You don’t have to do any research of your own. You will simply receive a message that tells you what token to buy. If you follow the instructions, you’re invested. Then, down the line, you’ll receive another message. This one will tell you to sell. If you opened a position as was suggested, you sell that coin and either turn a profit or limit your loss.
It’s pretty straightforward stuff. But beyond taking some of the guesswork out of investing, crypto signals also help remove emotion from the investing process. And this aspect is valuable… because all too often, crypto investors get into a position without a plan. They hear good things. They might even do their due diligence and determine it looks like a good investment. But if the token’s value falls off a cliff, so do those investment dollars. On the other hand, if it skyrockets upward, that’s great. But when will you sell and actually turn a profit?
Having an exit strategy is crucial… especially in a market as volatile as cryptocurrency. But as any investor worth their salt knows, psychology plays a monumental role in the investing process. And those who grow overly attached to their investments will likely regret it in the long run. To this end crypto signals can play an invaluable role.
How Crypto Signals Work
Depending on which crypto signals you sign up for, the recommendations they make can be based on any number of factors… or a combination thereof. For instance, many crypto signals build their strategies around technical analysis. But all the technical analysis in the world can’t account for the latest rumors (or actual news) that can send crypto markets teetering in either direction. Then, of course, there is the overall health of the market. When overall trading volume begins to taper off, it can lead to a dip in the markets as a whole. And the opposite is equally true.
Now, to be fair, folks who have been trading crypto for a while will probably scoff at the idea of someone else doing their research for them. And that’s perfectly fine. There’s nothing wrong with a “Lone Ranger” approach. But even the Lone Ranger learned a thing or two from Tonto’s wise ways.
Here’s an example of what a crypto signal can consist of. Now, keep in mind, there are hundreds of different ones. So there’s some variation between them. But the premise is fairly consistent among the 30-plus we tested out.
The first message will give you an action to take. For instance, buy Bitcoin at $33,500. Some crypto signals will suggest a specific exchange to use too. But that’s not important for larger coins with a lot of liquidity. Then it will give you two future actions to take. Either sell when the price of the coin falls to a certain price (say $32,500) or sell when it rises to a certain price ($35,000). For the former, this stop loss price will limit how much you can lose. And the latter is in place to make sure you remember to cash in on your gains.
Not All Signals Are Sent Via Email
Many crypto signals deliver information via email. And they typically send buy prices that are either at or slightly above current market values. This is to allow subscribers who aren’t glued to their inboxes all day a chance to still act on the recommendation. But it’s possible to still miss an opportunity. And it’s important to remember that’s okay. Don’t go chasing prices. If a crypto signal tells you to buy a coin at a certain price and it’s already risen in value beyond that point, wait for the next one. Lots of the data can be based on algorithms. And it’s better to miss out on an opportunity than to fall victim to it.
The other aspect to be aware of is that some crypto signals prefer to use Telegram as their delivery platform of choice. It’s no more difficult to sign up for this service than for a new email address. And this makes it easier and cheaper for services to automate the delivery of the messages.
Where to Sign Up: Our Favorites So Far
Of the free crypto signals we dug into, one of the clearest and easiest to follow was one of the originals: Crypto Signals. But there are lots of other ones worth considering. BitYard’s free crypto news feed was filled with good info but didn’t offer much in the way of buying and selling recommendations. Nonetheless, we’ve found the news to be useful.
On the other hand, the Verified Crypto Traders Telegram feed is excellent for buy and sell recommendations. It features comprehensive explanation videos and dedicated channels for short-term and medium-term traders. Based on our experience, there tend to be two to four trade recommendations issued per day. But one of our favorite aspects is how it supports an automated trading bot. This makes it simple for users to trade automatically within their exchange by simply linking the API keys to the bot. It’s pretty nifty stuff.
The other free one that scratched a lot of the same itches was Fat Pig Signals. The free channel can be a bit of a free-for-all at times. But like with Verified Crypto Traders, there is a VIP service that offers more pertinent trading information. Regardless, even the free version offers a lot of valuable information for both seasoned and rookie crypto traders.
Keep in mind, this is just a starting point. There are lots of crypto signals that we haven’t tried yet. However, slowly but surely, we’ll get through some more. And when we do, we’ll pass along the latest and greatest to our readers.
The Bottom Line on Crypto Signals
Some are completely automated. Others have experts that verify the crypto signals before they are issued. And others still are completely guided by expert analysis. Of the ones we checked out, we liked the personalized, expert-driven ones the best. But we can’t vouch for their track record quite yet.
On the other hand, if you want a no-nonsense service delivered right to your inbox we wholeheartedly recommend Manward Financial Digest. In it, crypto expert Andy Snyder delivers the information traders are looking for with the data to back it up. He knows the crypto markets are headline-driven. And he factors that in with every recommendation he sends out. It’s worth mentioning this isn’t exactly like the crypto signals mentioned above though. The information covered includes a wide variety of investment opportunities… not just in the crypto markets. If you’d like to give it a shot, simply drop your email address in the box below to get started.
About Matthew Makowski
Matthew Makowski is a senior research analyst and writer at Investment U. He has been studying and writing about the markets for 20 years. Equally comfortable identifying value stocks as he is discounts in the crypto markets, Matthew began mining Bitcoin in 2011 and has since honed his focus on the cryptocurrency markets as a whole. He is a graduate of Rutgers University and lives in Colorado with his dogs Dorito and Pretzel.