BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
Big 3 Continuation Strategy found bearish trade 6 hours ago
First thing for the Big Three Trading Strategy: Apply Indicators to Chart
Apply all of the three moving averages to your chart - 20 - 40 - 80 sma
You can make them green, blue, red, pink, etc… The color is just your personal preference.
Again these are 20, 40 , 80-period Simple moving averages. These are the best trend forex indicators and will help you determine trends and every time frame.
After studying the charts and applying many different moving averages, we found these three to work extremely well together for this particular strategy. Which is why we called them the big three.
Second thing for the best three trading indicators strategy: The Trend… Up or Down?
Once your “Big Three” indicators are on your chart, go ahead and find a current up trend or down trend.
To do that simply look at where the price action is and determine if its above the moving averages or below
If the price is above the three moving averages you have an uptrend: below is a downtrend.
Step 1 - Wait for entire candle to close outside of Moving averages.
Wait for the price close below lowest moving average in a downtrend:
Step 2 watch for bullish pull back in price action
You wait for the price to pull back and then move in the direction of the trend to make your entry.
Step 3 Enter on the red candle close below all ma's
To determine this you can either go to a lower time frame or stay in the current time frame that the entire candle closed completely below or above the moving averages.
The price action does not have to necessarily go back and touch the moving averages (which does occur) but you need to confirm there was pullback in the price and then a continuation of the current trend. Also, read bankers way of trading in the forex market.
The reason that I prefer to wait for a break pullback and go is because statistically, the price will mostly always retrace during a bearing or bullish trend .
For a more risky approach to this strategy, you could technically get in a trade right when the price breaks the highest or lowest moving average but this method may cause more harm than good.
The reason is that not every time it breaks these lines it is headed for a strong up or down trend.
Which is why you need to wait for a FULL candle to close above/below these lines and you wait for a pull back and go to enter the trade.
Step 4 Place your stop loss above the top moving average line. Depending on what time frame you are in will vary on how large your stop is.
Scalpers may have a tight 5-10 pip stop
While day traders will have a 30-50 pip stop
Step 5 you determine TP or Your take profit is when the price touches the 80-period line.
You can tweak this rules as you wish, but we found the best way to push your winners with this strategy was to wait until the price touches the 80-period line.
Comment: This is a bearish trend and the bottom ma is the 20 sma. My step 1 for price to close below it and then step 3 entry for price to close below it also. The 80 sma is above all the other ma's on the chart. Sometimes when there is a reversal move and the ma's haven't had time to align then the 80 sma may be on bottom if it is a bearish trend at first. Then for step one and 3 I can use the 80 sma as the ma I want to close below. Then as price moves the other ma's will start getting below the 80 sma. The only other time I am using the 80 sma as in this example above is when to exit the trade. As you can see this trade has never gone above the 80 sma so if you had entered any of these entry points you would still be in this trade if that as your exit plan 9 price to move above the 80 ma). Personally when price consolidates sideways as in this move I would take 1/2 of my profit out but leave 1/2 in and then re-enter another time when the big 3 setup showed to enter another trade. Hope this shows how i would use the 80 sma. Thanks for your comment.