Bitcoin investing could be a full-time job. With bitcoin's extreme price fluidity, it is easy to miss a price opportunity. To keep track of the turbulence in the market, it may be necessary to monitor the market consistently.
Similar to a Google alert, many exchanges - like Coinbase, GDAX, and Kraken - allow for alerts when prices reach a certain level. These alerts can be sent to you via app push, email, or by text. Using these alerts, you can have access to real-time data regarding your portfolio without needing to continuously monitor price changes. This can help in negotiating price positions, such as knowing when to sell and when to move in to buy at a discount.
Understanding Price Alerts
A price alert is not a sell action. Unlike a limit order, no buy or sell order will be automatically triggered when a price alert is issued. Price alerts are just indicators that there has been significant movement in the market.
This may, under certain conditions, be a good thing. Let's say that bitcoin prices dropped 25 percent overnight. Your stop-market order may sell off your bitcoin at a severe discount. However, with a price alert, you can reconsider the sell before it happens. It may be that the price is too low to sell and instead you decide to move to buy at a discount to maximize the opportunity.
Price alerts are about control. They basically serve as a watchdog, alerting you to activity in time to be able to effectively move to maximize its potential or minimize the loss. Price alerts are useful for those that want to have control of their portfolios, but cannot make the full-time commitment to monitoring a single asset.
Price alerts are a key component of professional trading. Most trading software and web-based professional trading platforms allow users to set multiple price points. The more diverse your portfolio gets, the more you will have to pay attention to simultaneously. Alerts are essential for creating minimum reporting standards from your trading platform.
This, however, does not mean that a price alert is a replacement for properly managed stop orders. Unless you are awake 24/7, there will be a time that the market is moving and you are unavailable to respond. Bitcoin is a global commodity and trades 24 hours a day; it is important that you have well-set stop orders and use price alerts to inform you when bitcoin price is approaching the orders' triggers.
Conclusion
Price alerts are a tool that can help you be a more knowledgeable, engaged investor. However, it is just one tool in your investing toolbox. Just as you would not build a house with just a hammer, you should not rely on price alerts alone to safeguard your portfolios. Using price alerts in conjunction with other tools such as stop orders can help you stay in control of your trading position and maximize your return at the market.
Want more investment tips to help you maximize your profits? Read Bitcoin Market Journal and learn to invest like a pro!
wow very excellent post Thanks for sharing i will done upvote..
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Ive been using tradingview alerts for years. They are part of my investment strategy and are highly recommended! Great post!!
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