With ETH and BTC vying for global domination, it's good to know where to weight your portfolio. There is no better way than watching the ETHBTC chart. Looking over the years it is clear that ETH has outperformed BTC mainly due to its later arrival to the market. Starting with a much smaller market cap has allowed it to outperform BTC over the long term. I suspect this will continue to be the case.
In the shorter term, it's good to know which one is in front so that we can benefit from their individual moves.
Today
ETH rallied harder than BTC last night which is a shift away from BTC's recent dominance. It has been moving in a short term downtrend against BTC, but all as part of a longer-term consolidation pattern. ETH found support yesterday on the bottom of that triangle and has rallied strongly. Technically it's still inside the short term downtrend but ETH has a good chance of establishing a new short term uptrend from here.
My TA Strategy
I'll be charting using a mixture of trend lines and free indicators available on Tradingview (TV). This strategy is focused on riding the trend, with an emphasis on optimising the entries and exits for reliability and profit. The following indicators are being used:
MACD 4C - A great tool for following the broader trend whilst highlighting significant shifts in momentum direction.
ADX DIv - This is an indicator I modified from the existing one found on TV. Please forgive my slap together coding if you venture into Pinescript, I'm clearly no coder... I've added an extra ADX line so as to highlight DIvergence/Convergence in the trend strength. This is one of my favourite indicators because it not only shows the trend direction but also its strength. Taking a buy signal whilst the histogram is still red should only be done if the green line (DI+) is rising strongly and about to cross the red (DI-). Also, if the ADX lines are below the threshold (I've set it at 23), then there is no trend and signals have a much higher chance of being false. For higher probability trade, wait for rising ADX.
SQZMOM - First a quick shout out to "Lazybear". I don't know who this guy is but he is the god of indicators. I've looked through many of his indicator builds and he is clearly an extremely valuable resource for the TA community. Thanks, LB !! SQZMOM is no exception to this. I mostly use this one as a confirmation of trend direction/change, and it helps me not enter or exit trades too early. Along its centerline are grey and yellow dots. Grey dots indicate low volatility / flat price action. Yellow dots indicate high volatility / trending market. Lower risk entries can be had by entering on the first yellow dot when the histogram flips from one colour to another.
VWMACD - Taking volume into consideration when trading is very important as it can show you what strength is behind a move. I big move on low volume is not to be trusted. This "Volume Weighted MACD" take volume into consideration and is faster moving than the "MACD 4C". This indicator needs to be green for me to enter a long, or red for a short. Its histogram is also useful for indicating whether a trend is increasing or decreasing in strength, alerting that a trend "might" be ending soon.
In the shorter term, it's good to know which one is in front so that we can benefit from their individual moves.
Today
ETH rallied harder than BTC last night which is a shift away from BTC's recent dominance. It has been moving in a short term downtrend against BTC, but all as part of a longer-term consolidation pattern. ETH found support yesterday on the bottom of that triangle and has rallied strongly. Technically it's still inside the short term downtrend but ETH has a good chance of establishing a new short term uptrend from here.
My TA Strategy
I'll be charting using a mixture of trend lines and free indicators available on Tradingview (TV). This strategy is focused on riding the trend, with an emphasis on optimising the entries and exits for reliability and profit. The following indicators are being used:
MACD 4C - A great tool for following the broader trend whilst highlighting significant shifts in momentum direction.
ADX DIv - This is an indicator I modified from the existing one found on TV. Please forgive my slap together coding if you venture into Pinescript, I'm clearly no coder... I've added an extra ADX line so as to highlight DIvergence/Convergence in the trend strength. This is one of my favourite indicators because it not only shows the trend direction but also its strength. Taking a buy signal whilst the histogram is still red should only be done if the green line (DI+) is rising strongly and about to cross the red (DI-). Also, if the ADX lines are below the threshold (I've set it at 23), then there is no trend and signals have a much higher chance of being false. For higher probability trade, wait for rising ADX.
SQZMOM - First a quick shout out to "Lazybear". I don't know who this guy is but he is the god of indicators. I've looked through many of his indicator builds and he is clearly an extremely valuable resource for the TA community. Thanks, LB !! SQZMOM is no exception to this. I mostly use this one as a confirmation of trend direction/change, and it helps me not enter or exit trades too early. Along its centerline are grey and yellow dots. Grey dots indicate low volatility / flat price action. Yellow dots indicate high volatility / trending market. Lower risk entries can be had by entering on the first yellow dot when the histogram flips from one colour to another.
VWMACD - Taking volume into consideration when trading is very important as it can show you what strength is behind a move. I big move on low volume is not to be trusted. This "Volume Weighted MACD" take volume into consideration and is faster moving than the "MACD 4C". This indicator needs to be green for me to enter a long, or red for a short. Its histogram is also useful for indicating whether a trend is increasing or decreasing in strength, alerting that a trend "might" be ending soon.
