Dubsta000

BTC Enter and Exit Indicators

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
These are a set of strong trading signals that can be used for entry and exit points. I have used Bitcoin as my example as it clearly shows strong entry and exit points. Please look at the graph and indicators carefully as it can be hard to follow.
The way it works is that a confirmation buy or sell signal happens when all 3 indicators cross over their respective boundary line. Once all 3 have crossed over or under their respective lines it almost always shows the direction of the new trend.

So breaking down the indicators:

Commodity Channel Index ( CCI ) Inputs: (75,OHLC/4)

Stochastic ( Stoch ) (20,3,3)

Chande Momentum Oscillator (8,OHLC/4)
( ChandeMO )


The conditions is that all 3 indicators must cross over their respective lines at the same time. For a Buy Signal:

1. ChandeMO must be below and is crossing above the 0 line
2. Stoch must be below the 25 line and has crossed above it
3. CCI must (should) be below the -100 line and cross above it

Buy security when all indicators have closed above the line

Sell Signal:

1. ChandeMo must be above the O line and has crossed below
2. Stoch must be above the 75 line and has crossed below
3. CCI must (should) be above the 100 line and cross below

Sell security when all indicators have closed below the line

In extremely volatile markets and securities, the indicators fail to be very reliable as can be seen with the earlier sell line (red line) for BTCUSD . This is not a definitive trading signal but is good entry and exit guide.
Comment: Be on the look out, two of the 3 indicators are below their significant entry signals. Follow it closely the next week, a drop under 6000 would likely trigger all 3 signals to be below their entry line.

Make sure you enter only when a candle on a 4hour chart or higher has closed above the required 3 indicator lines. Be patient, BTCUSD looks like it poised for a strong bullish rebound perhaps a couple of thousand dollars or more.

Comments

The CCI does not correlate with the rules you have laid out above for any of the sell signals. Should we disregard for sells and only consider the other 2 indicators?
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Dubsta000 youngsiddartha
@youngsiddartha, So, the CCI signals work well on almost all securities. Currently I use just CCI (75) and Stoch (20) with Ichimoku baseline/conversion line cross. However, for BTCUSD, obviously the ridiculous volatility at the start of the year has skewed the signals. Right now, with lower volume levels and lower volatility, the CCI cross can be used as a confirmation indicator. I will update the chart to see if any new long or short positions could have been opened since AUG 9.
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