Banklesstimes.com sits down with Edward Moya, a Senior Market analyst at OANDA. OANDA supports cryptocurrency traders with technical analysis tools, including indicators, chart patterns, and moving averages. Their MarketPulse website provides fundamental insights into the crypto market. Risk management is emphasized, with the use of stop losses to limit losses. OANDA acknowledges the risks in the volatile crypto market, such as exchange collapses, regulatory bans, and de-risking moments. Educational webinars cover trading psychology and risk management. Traders can choose strategies for day trading, swing trading, or long-term holding, and create and automate their own strategies. Market sentiment is analyzed through order book data and whale activity, while behavioural finance concepts help traders understand market psychology and biases.
OANDA Corporation is regulated by the CFTC/NFA. OANDA is a member Firm of the NFA (Member ID: 0325821). CFDs are not available to residents in the United States.
OANDA CORPORATION IS A MEMBER OF NFA AND IS SUBJECT TO NFA'S REGULATORY OVERSIGHT AND EXAMINATIONS. HOWEVER, YOU SHOULD BE AWARE THAT NFA DOES NOT HAVE REGULATORY OVERSIGHT AUTHORITY OVER UNDERLYING OR SPOT VIRTUAL CURRENCY PRODUCTS OR TRANSACTIONS OR VIRTUAL CURRENCY EXCHANGES, CUSTODIANS OR MARKETS
Trading in digital assets, including cryptocurrencies, is especially risky and is only for individuals with a high risk tolerance and the financial ability to sustain losses. OANDA Corporation is not party to any transactions in digital assets and does not custody digital assets on your behalf. All digital asset transactions occur on the Paxos Trust Company exchange. Any positions in digital assets are custodied solely with Paxos and held in an account in your name outside of OANDA Corporation. Digital assets held with Paxos are not protected by SIPC. Paxos is not an NFA member and is not subject to the NFA’s regulatory oversight and examinations.
Bankless Times: What trading methodologies do you recommend for cryptocurrency trading and why?
Edward Moya: Cryptocurrency is the most volatile asset class out there and it might not be suitable for everyone. Given the recent volatility that stemmed from the many seismic global events that have occurred in the past few years, figuring out which trading methodology to use will depend on a whole lot more than what technical indicators you want to use. Each trader needs to find a strategy that works best during the times available they can trade, does not allow for chasing trades, and it would be ideal if it included a risk-to-reward ratio that allows them to capture strong market moves.
Traders who like following crypto fundamentals have watched Bitcoin go from sometimes performing like a safe-haven to failing terribly as an inflation hedge and almost dying on crippling regulation. It is important to understand that correlations and market themes are always changing, which means your strategy will always be evolving.
There is not a standard crypto trading playbook as the market environment is constantly changing, but it is a good start to make sure your trading approach can embrace momentum, technicals, and sentiment.
BT: How does your platform support technical analysis in cryptocurrency trading?
EM: OANDA offers a wide range of trading platforms that can allow you to do technical analysis anywhere. Whether you are at home, at work, or on the go, OANDA’s many platforms allow long-term and short-term traders to analyse the cryptoverse with all the commonly used technical indicators anywhere. Given the extreme volatility that can happen with cryptocurrency trading, many traders focus on very-short-term market analysis. OANDA’s platform allows you to study price trends, chart patterns, momentum indicators, oscillators, moving averages, and support & resistance levels.
BT: What indicators or tools does your platform offer to assist traders in making informed decisions?
EM: A plethora of indicators can try to help identify market trends and the likelihood of its continuation. OANDA’s trading platforms offer technical indicators, charting patterns, several drawing tools, moving averages, and momentum indicators.
In addition to hundreds of patterns and technical signals, OANDA’s MarketPulse website keeps you updated with all the fundamental drivers for the crypto market. Crypto mainstream acceptance will be determined by what happens with global crypto regulation, a growing list of crypto products (ETFs), energy consumption, and use case arguments (peer-to-peer payment system and smart contracts).
Crypto risks are plentiful and can stem from the collapse of high-profile crypto exchanges/companies, a regulatory ban from a key government agency, the implementation of central bank digital currencies (CBDCs), or de-risking moments for traditional asset classes. Crypto traders should expect extreme price moves given all the leverage, liquidity, and pricing mechanism mismatches.
BT: Can you explain the role of risk management in cryptocurrency trading and how your platform facilitates it?
EM: When trading cryptocurrencies, it is important to expect the unexpected. Crypto trades 24/7, 365 days a year, which means a fresh catalyst can emerge at any time. Since cryptos are the most volatile asset class, it is important to use stop losses to try to contain losses on losing trades.
Crypto risks are plentiful and can stem from the collapse of high-profile crypto exchanges/companies, a regulatory ban from a key government agency, the implementation of central bank digital currencies (CBDCs), or de-risking moments for traditional asset classes. Crypto traders should expect extreme price moves given all the leverage, liquidity, and pricing mechanism mismatches.
BT: What resources or educational materials do you provide to help traders understand trading psychology and emotional control?
EM: OANDA offers a series of webinars that provides an in-depth understanding of technical analysis, trading psychology, risk management, and an explanation on how the retail and institutional investor approaches crypto given all the recent turmoil.
BT: How does your platform address the issue of market volatility and provide strategies for navigating it?
EM: Crypto markets have traditionally been volatile, and it is important to understand which market themes traders will be watching. Marketpulse.com helps traders keep perspective with understanding the severity of each significant downturn and what might be the potential market ups and downs. Cryptos are still a relatively new asset class, but when all the headlines turn bearish and interest fades, it is difficult to buy when things seem the worst. OANDA’s platforms allow you to choose a trading strategy that works with your goals, timeframe, and financial situation.
Applying behavioural finance concepts to crypto trading is not easy as you have to apply to both retail and institutional traders. During the past crypto winter, emotional trading led to the crippling losses for both retail and institutional traders. It is important to understand cognitive biases, as that could lead to undisciplined trading. Herding behaviour in cryptos has helped trigger some asset bubbles, which made it hard for people to decide on when to exit a trade.
BT: Are there any specific trading strategies or patterns that your platform supports or encourages for cryptocurrency trading?
EM: Since the cryptocurrency market trades non-stop every day of the year, there is no asset more liquid than cryptos. Whether you are a day trader, swing trader or even a HODler(someone who buys crypto for the long-term), if your risk tolerance can handle crypto, you can find a trading strategy that works for you. OANDA’s platform allows you to create, optimise, and automate your trading strategies.
BT: Can you provide examples of how your platform helps traders analyze market sentiment and make decisions based on it?
EM: OANDA is a multi-asset broker that offers an FX trading tool for currency trades that gives you trading insight on how other forex traders are viewing the market. The Order book tool allows one to visualise the combined number of open positions and open orders held by OANDA clients over the past 24 hours. In the world of crypto, blockchain technology makes transparency very easy for everyone to see when whales are actively selling or buying crypto.
BT: How do you integrate behavioural finance concepts into your platform to assist traders in understanding market psychology and making better trading choices?
EM: Applying behavioural finance concepts to crypto trading is not easy as you have to apply to both retail and institutional traders. During the past crypto winter, emotional trading led to the crippling losses for both retail and institutional traders. It is important to understand cognitive biases, as that could lead to undisciplined trading. Herding behaviour in cryptos has helped trigger some asset bubbles, which made it hard for people to decide on when to exit a trade.
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