Good Afternoon, and welcome to an update on the wonderful world of Bitcoin.
Today I will be reviewing the "Golden Cross", or a version of it. Traditionally the golden cross occurs when the 50 day moving average rises above its 200 day moving average. I will be using the VWMA vs the SMMA. I will also add a higher day moving average for reference as well. The VWMA will react better to important price impulses, while the SMMA gives recent prices an equal weighting to historic prices. The calculation takes all available data series into account rather than referring to a fixed period.
I have chosen a shorter range than the 50 vs 200 days and am using a 20 day for both SMMA and VWMA to react quicker with the ever so changing price of BTC. You will see this works on 9 day, 15 day and up but the smaller time frame you have the more crossovers you will see which in turn will lead to more false crossovers. Though shorter time frames may benefit a day trader, the 20 day time frame for these MA's work well for BTC and show a sustained trend/price movement and work well for long positions.
Looking at the chart above we can find golden eggs (since Easter is upon us) to show where these crossovers have happened in the past and we can see that each time this has signaled a significant length in price movement. On 11/16/17 we had a bullish crossover around 6750k and we did not have another crossover until 12/20 around 17,750k which signaled a bearish move! THATS HUGE! On 1/3 we see another bullish golden cross with price around 14300k and our next bearish golden cross was on 1/10 with a price around 15270k. Not near as big as the first run but still making a profit. We see an attempt for a golden cross on 1/30 but failed, but if you notice on my RSI chart we couldn't break the signal line then AND the price is still below all lines. Our next golden cross was on 2/10 at around 8225k and then our bearish cross occurred on 2/23 at around 10380k.
See where I'm going with this! IF we ONLY traded off this we would always be profitable. Now, did we max our profit, no, we could have entered in earlier or exited positions earlier but we were not sure of a true reversal either way. Some of these were shorter and longer than others, but we can still see how this can be very profitable AND almost risk free.
Now, per my previous post there are always other technical indicators to look at and one of my favorites is the RSI. If you notice on the RSI almost each time before a golden cross the RSI makes it way above the signal line of 50.
Looking at where we currently are with BTC, we can see that we have just jumped above the resistance line on the chart. Our 20 day SMMA just crossed the 50 day MA and the VWMA is turning up. ALSO the RSI is above our resistance line, holding steady, and it's climbing.
For educational purposes only you could go ahead and buy with placing a stop loss just below the resistance line incase of a failed break out. Higher risk, higher reward. OR we could wait for the sure thing, and we would buy as soon as the VWMA crosses the SMMA, and then sell at another cross going down.
Also remember, and as stated in my precious chart, when the VWMA is in between the price and the SMMA it shows the greatest strength in trend.
Right now we are looking pretty positive with the price above all the lines, the SMMA has crossed the MA, and the VWMA is turning up. The RSI is holding support above our signal line and we have broke the current resistance. All we need to see is that Golden Cross as the VWMA turns up and crosses and then it's GAME ON! At that point we may break out of this downward channel and see a new upward channel begin to form.
As always, remember we are still in a down channel until we break out of it and this could be a short up trend. Keep a close eye on the charts and set your stop loss.
THANKS for reading! Like if you Like!
Happy Trading :)
Much Love,
DustyPH
Today I will be reviewing the "Golden Cross", or a version of it. Traditionally the golden cross occurs when the 50 day moving average rises above its 200 day moving average. I will be using the VWMA vs the SMMA. I will also add a higher day moving average for reference as well. The VWMA will react better to important price impulses, while the SMMA gives recent prices an equal weighting to historic prices. The calculation takes all available data series into account rather than referring to a fixed period.
I have chosen a shorter range than the 50 vs 200 days and am using a 20 day for both SMMA and VWMA to react quicker with the ever so changing price of BTC. You will see this works on 9 day, 15 day and up but the smaller time frame you have the more crossovers you will see which in turn will lead to more false crossovers. Though shorter time frames may benefit a day trader, the 20 day time frame for these MA's work well for BTC and show a sustained trend/price movement and work well for long positions.
Looking at the chart above we can find golden eggs (since Easter is upon us) to show where these crossovers have happened in the past and we can see that each time this has signaled a significant length in price movement. On 11/16/17 we had a bullish crossover around 6750k and we did not have another crossover until 12/20 around 17,750k which signaled a bearish move! THATS HUGE! On 1/3 we see another bullish golden cross with price around 14300k and our next bearish golden cross was on 1/10 with a price around 15270k. Not near as big as the first run but still making a profit. We see an attempt for a golden cross on 1/30 but failed, but if you notice on my RSI chart we couldn't break the signal line then AND the price is still below all lines. Our next golden cross was on 2/10 at around 8225k and then our bearish cross occurred on 2/23 at around 10380k.
See where I'm going with this! IF we ONLY traded off this we would always be profitable. Now, did we max our profit, no, we could have entered in earlier or exited positions earlier but we were not sure of a true reversal either way. Some of these were shorter and longer than others, but we can still see how this can be very profitable AND almost risk free.
Now, per my previous post there are always other technical indicators to look at and one of my favorites is the RSI. If you notice on the RSI almost each time before a golden cross the RSI makes it way above the signal line of 50.
Looking at where we currently are with BTC, we can see that we have just jumped above the resistance line on the chart. Our 20 day SMMA just crossed the 50 day MA and the VWMA is turning up. ALSO the RSI is above our resistance line, holding steady, and it's climbing.
For educational purposes only you could go ahead and buy with placing a stop loss just below the resistance line incase of a failed break out. Higher risk, higher reward. OR we could wait for the sure thing, and we would buy as soon as the VWMA crosses the SMMA, and then sell at another cross going down.
Also remember, and as stated in my precious chart, when the VWMA is in between the price and the SMMA it shows the greatest strength in trend.
Right now we are looking pretty positive with the price above all the lines, the SMMA has crossed the MA, and the VWMA is turning up. The RSI is holding support above our signal line and we have broke the current resistance. All we need to see is that Golden Cross as the VWMA turns up and crosses and then it's GAME ON! At that point we may break out of this downward channel and see a new upward channel begin to form.
As always, remember we are still in a down channel until we break out of it and this could be a short up trend. Keep a close eye on the charts and set your stop loss.
THANKS for reading! Like if you Like!
Happy Trading :)
Much Love,
DustyPH
Comment:
***This information is not a recommendation to buy or sell**
P.S. I have on this chart a 20 day MA that is an indicator at the top of the chart and can be "unhidden" from clicking on the eye beside it. This will allow you to play with MA and see the potential crossovers with different moving averages. I chose to hide it to avoid confusion on the chart.