I like to keep things simple and I thought I'd pass this on to the newbies out there.
I learned a long time ago from an ancient trader (pushing 80 years old) that he never bought any stock when the price was below the 200 EMA (or SMA). It was a written rule that he followed religiously. That one rule would save me a lot of money. When I disregard it, it has cost me dearly.
Today ETHUSD dropped below its 200 day EMA. This is a very important milestone for any crypto, especially one as important as Ethereum. I have now put it on my shorting list and won't go near it unless it is for day trading or shorting. There is NO WAY way I will hold a long position on it for more than a couple of days because it is now officially trending down for the long term. How low will it go? If it stays below the 200 EMA then it will go down a lot. We could easily see $120 by the end of the year, maybe even $100 as long as the price remains below the 200 EMA. If it bounces back over the 200 EMA, then I will be happy to enter a long position if the other indicators look alright.
If you look at the chart dating back to early 2017, you will see the daily 200 EMA is your friend. It is a road marker that when obeyed, will help you from going off of a cliff. Try it on your other charts when you lost money. Was the price below the 200 EMA? If so, you could have saved yourself a lot of money. Put the daily 200 EMA in your toolbox and you will be glad you did.
Enjoy!
I learned a long time ago from an ancient trader (pushing 80 years old) that he never bought any stock when the price was below the 200 EMA (or SMA). It was a written rule that he followed religiously. That one rule would save me a lot of money. When I disregard it, it has cost me dearly.
Today ETHUSD dropped below its 200 day EMA. This is a very important milestone for any crypto, especially one as important as Ethereum. I have now put it on my shorting list and won't go near it unless it is for day trading or shorting. There is NO WAY way I will hold a long position on it for more than a couple of days because it is now officially trending down for the long term. How low will it go? If it stays below the 200 EMA then it will go down a lot. We could easily see $120 by the end of the year, maybe even $100 as long as the price remains below the 200 EMA. If it bounces back over the 200 EMA, then I will be happy to enter a long position if the other indicators look alright.
If you look at the chart dating back to early 2017, you will see the daily 200 EMA is your friend. It is a road marker that when obeyed, will help you from going off of a cliff. Try it on your other charts when you lost money. Was the price below the 200 EMA? If so, you could have saved yourself a lot of money. Put the daily 200 EMA in your toolbox and you will be glad you did.
Enjoy!