Sure, here are the key points for demand zone trading in crypto:
1. **Identifying Demand Zones** - Look for price areas on the chart where the asset has historically seen strong buying interest, causing multiple price bounces or reversals. - Confirm these zones with high trading volumes and supportive candlestick patterns like bullish engulfing or hammer patterns.
2. **Trading Strategy** - Enter long positions when the price approaches a demand zone and shows signs of a reversal. - Place stop-loss orders below the demand zone to mitigate risk and set take-profit levels at previous resistance points or based on favorable risk-reward ratios.
3. **Combining with Indicators and Risk Management** - Use additional indicators like moving averages, RSI, or MACD to confirm trends and potential reversal points. - Practice sound risk management by using appropriate position sizing, diversifying your investments, and continuously monitoring and adjusting your strategy based on market conditions.