Market Analysis After a very large bullish move around a week ago, Bitcoin has been ranging between $9,500 and $8,500. The price now appears to be testing the resistance at $9,500 again, and whether the price will achieve a breakthrough or not is still an open question.
Usually, we are told that we should not trade during ranges and that we should only trade when there is an established trend. Although there is a lot of truth to these statements, one can still make a profit by scalping the ranges. Today, we will therefore take a look at how you can use a scalping strategy and profit during a range!
Indicators Choosing the right indicators is an essential part of an automated strategy, and a scalping strategy is no exception! This week we are looking at how to combine William’s % and the Exponential Moving Average crossover in order to get a solid entry point.
William’s % serves as a great indicator in identifying pullbacks in the market. However, as we know very well, this indicator can be oversold for a very long time, and it can take a long time before the market recovers again. Thus, we need a trend-following indicator to identify when the trend has reversed and is moving higher again; the Exponential Moving Average is an adequate indicator to use in this case.
In our strategy, we will use William’s % as the first requirement for entry. Then, we will use the crossover between the 1 EMA and the 15 EMA as our second requirement. As you may have noticed, the probability that these two indicators provide a buy signal at the same time is very low. As such, we can use a feature in our strategy section in Cryptohopper which lets us keep a certain signal for up to 10 candles.Therefore, if Williams % showed an oversold signal, and a few candlesticks later we would see the crossover of the 1 and 15 EMA, our hopper would still make the trade.
If you want to be conservative and make sure you are only trading when the broader trend is in your favor, you may want to add the MESA indicator on the 4h time frame while keeping the EMA and William’s % on the 15 minutes timeframe.