Evening everyone. Looks like BTC is stuck in a range or figuring out its next move, so let's examine a month of momentum trading setups that we're sure to see again as the bull market plays out.
Quick review -
-50 wma = buy/sell line. Longs only when price is above and shorts only when price is below. This keeps us from pissing into the wind...unless you're into that. Trading with the momentum will accommodate a lot of slack for new traders and will maximize profits for anyone who has clean entries and exits.
-5 period RSI with over/under lines at 51/49 = momentum oscillator. Crosses top to bottom or bottom to top are a clue as to upcoming price direction. More useful on the daily chart, but in this case the peaks coincide well with short term tops.
-ATR = my stop loss tool of choice. I've gone over it in previous ideas. Great for calculating a position size for consistent risk amount no matter the volatility of the product. Let me know if you want the tutorial on it in the comments, but I find most people have their own stop setting process and are quite fond of it.
Price crossed above the 50 wma on the 4h chart in the beginning of June. We should've went 500x leverage long there...right? Hindsight is awesome. Another way to do it is to wait for a couple red candles and a clear peak in the RSI. Mark the peak, mark a horizontal line across the highest close. When the RSI heads upward again and price exceeds the previous top, it's fairly safe to go long. You can even wait for the candle to close and just know that you might have some short term draw down. A properly set stop loss will give the trade room to breathe and keep you in the game.
The first three opportunities in June would've been slow to take off and had 1-2% draw down, but they all would've led to about 15% profit. After that we were looking at 15-25% per move not counting the blow-off top. Also notice this method will keep you out of false breakouts. Price didn't close above that blow-off top, so no trade. Then a series of lower highs = no trade.
I know we can't trade the left side of the chart, but studying it gets us ready for the future. Not trading or financial advice...just some simple tools that have been useful to me. Leave questions/comments below and best of luck to everyone.
Quick review -
-50 wma = buy/sell line. Longs only when price is above and shorts only when price is below. This keeps us from pissing into the wind...unless you're into that. Trading with the momentum will accommodate a lot of slack for new traders and will maximize profits for anyone who has clean entries and exits.
-5 period RSI with over/under lines at 51/49 = momentum oscillator. Crosses top to bottom or bottom to top are a clue as to upcoming price direction. More useful on the daily chart, but in this case the peaks coincide well with short term tops.
-ATR = my stop loss tool of choice. I've gone over it in previous ideas. Great for calculating a position size for consistent risk amount no matter the volatility of the product. Let me know if you want the tutorial on it in the comments, but I find most people have their own stop setting process and are quite fond of it.
Price crossed above the 50 wma on the 4h chart in the beginning of June. We should've went 500x leverage long there...right? Hindsight is awesome. Another way to do it is to wait for a couple red candles and a clear peak in the RSI. Mark the peak, mark a horizontal line across the highest close. When the RSI heads upward again and price exceeds the previous top, it's fairly safe to go long. You can even wait for the candle to close and just know that you might have some short term draw down. A properly set stop loss will give the trade room to breathe and keep you in the game.
The first three opportunities in June would've been slow to take off and had 1-2% draw down, but they all would've led to about 15% profit. After that we were looking at 15-25% per move not counting the blow-off top. Also notice this method will keep you out of false breakouts. Price didn't close above that blow-off top, so no trade. Then a series of lower highs = no trade.
I know we can't trade the left side of the chart, but studying it gets us ready for the future. Not trading or financial advice...just some simple tools that have been useful to me. Leave questions/comments below and best of luck to everyone.