As many people getting involved in crypto after seeing the huge rise of Bitcoin in the last couple of months and reading about institutions getting involved in the crypto market. Newly joined traders might be made good profits during this uptrend without knowing why and how that particular coin achieved that ATH price. So if you're a newbie and want to stay profitable in the market for a long time then you should consider learning analysis, in this article I'll share one of the easiest but powerful trading strategies along with historical examples.
** Momentum & Uptrend **
In this trading strategy, we will use momentum indicators like MACD & RSI to get the proper entry and exit prices to execute the successful trade. Moving Average Convergence/Divergence Oscillator (MACD) is one of the best, easy to use and an effective indicator that can be used for many trading strategies & probably the most used indicator by active traders. Here we will use MACD signal line crossover.
So let's see how this strategy works in simple three steps:
Step 1: Find the coins in an uptrend
Step 2: Buy when the MACD line crossed above the MACD signal line
Step 3: Sell when the MACD line crossed below the MACD signal line
Yup, this is it!! See how easy it is.
Now let's see with the real historic chart and how does this works :
[Image link in case it's not visible : https://bit.ly/2PxPseZ]
Now see the bottom part of the chart where you can see the Moving Average Convergence/Divergence Oscillator (MACD) indicator with lines labelled as MACD line and MACD signal line. So as we have seen the three-step strategy, we can confirm that the ADA is in the uptrend so here the first step is verified. Now we can buy when the when MACD line crosses above the MACD signal line and then sell it when it crosses below. This is a bit riskier strategy but with proper execution and experience, this can be a very productive strategy. The advantage of this strategy is that it is easy to find peaks as well as troughs in the MACD histogram.
**Things to looks into **
Make sure you use 1 day timeframe as most of the trading strategies works best on larger timeframe.
Create a trading environment with proper indicators listed above
Try to use it in demo before
directly getting into with real money
Note: This article is for knowledge purpose only and use of strategy can result into profit or loss, just as any other strategy.
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