Topic: HAVE you tried daily trading using SMA (Read 1072 times)

Tnx for the tips. Newbie here:)

I agree




The link is not working. You can send me the photo by PM, I want to analyze this strategy, I've already seen someone using a strategy similar to this one.

Two BUY BTC has been done> https://www.yogile.com/t2hpjmn4#21t overall effect is breakeven or it would be similiar tha i would initially just buy and hold. I guess with this situation would be better the "buy and hold" because you would not need to sit behind the charts. Downside of "buy and hold" is you are exposed to risk of declining BTC against the USD which you can manage proactive with this strategy.

Hi have a look of this URL: http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:moving_averages where SMA200 is explained. Here the candles pattern doesnt play such a important role, you follow just a the things:

1. Where the price of BTC/USD is
2. Where SMA100 is
3. Where SMA200 is

The candle stick is easy. shows the price range from opening to close of a given time frame. Can have candle sticks of 1 min , 5 min, 15 min 1 day what ever.
If the price goes up during the period, eg. the opening price is lower than the closing the candlestick is green if the rice goes down in that period eg the opening is higher than the closing of the candlestick the colour is red.

i don't understnd how to read candle stick, just watch this thread hoper get something for learn.

I can see some logic in what you are saying conserning enterinmg and exit. In this case what i don´t understand is the need for 1 in candlesticks.. because you are not necessarily aiming for daytrade... So why so short candlesticks?

Thats where this strategy pays off when sharp moves on market>

Entry/Exit
•   Buy BTC - when BTC price is above SMA100, and SMA100 is above SMA200
•    Exit BTC and hold fiat  - when BTC price is below SMA100 and half way to SMA200
Check a photo of exit here>https://www.yogile.com/kiyq02h7#21t

NOTE> That this is test and according to signals we made an Exit BTC and hold fiat at 4575$ and still hold $ until it wont happen  "entry BTC signal - BTC price is above SMA100, and SMA100 is above SMA200".

Like your said, I usually use SMA for check trend on market, bollinger band for know when is highest price and should buy or sell (or can use Stock RSI). Final, pivot point, ichimoku for know support and resistance range .

As i told you i don´t use SMA´s alone. But longer moving averages would be good to predict support and resistence as well as put stop loss value. But to try to figure out momentum and trend on very short term deals i feel shorter term moving averages are more apropriate than to have infos on trend and momentum for 200 or 100 days.

Have you got any explanations why you prefer lower SMA values on shorter timeframe 1min chart. The longer gives me less noise and less decisons to make and thats why I rely on SMA100 and SMA200. I am curious why I could benefit with lower than 100SMA? Tell us more.

I would not mix Long SMA with such short timeframe trades. For shorter timeframe trades i set moving averages to lower values. But anyway, did not test this so much because i dont use SMA´s alone.

I got nothing to add on that I believe you made a valid point. I have started in 1min timeframe because the nature of cryptocoins and its volatility. The higher the timeframe is the more stable the entries suppose to be in theory. However, trend is my friend and thats why I like SMA because I like the ride the market waves!

Based on my personal opinion and experience it is proper to analyse this 1 min strategy with 1 hour, 15 min and 5 min chart I.e when all the three charts properly aligned together forming a trend then you can find a convenient entry spot on 1 min chart, I think trading 1 min chart alone without reference to the higher chart is not a good strategy considering the fact that cryptocurrencies are very volatile.

No it never was interesting for me

SMA = simple moving average indicator

Agree, the cryptomarket is more volatile than forex and that is realy good for this strategy as SMA100 and SMA200 which been used in this strategy give the clear signal when entry the BTC and when exit to fiat. For this strategy the low volatility is killer as SMA100 and SMA200 get realy close to each other and you cant see clear what to do. I chosen 1minute timeframe for this test because I assumed high volatility and clear signals. However, thats not always the case. I attached two charts, one is 1minute for 31/08/2017 and the second one which zoom out the critical area.

CHARTS> https://www.yogile.com/j6hvslor#21t (global 1minute chart for 31/08/2017 and bad area). Mostly look like clear entry/exit on global chart only one part is defined as bad area so I made a closer look and seen that would not make so many bad trades as it looks at first place. Therefore I oulined 6 points on zoom in chart.

1. SMA100 < SMA200 so only SELL BTC (keep fiat) allowed which would not happen because BTC price is above SMA200 (so I would hold Fiat)
2. SMA100 < SMA200 I would still hold fiat
3. SMA100 < SMA200 so only SELL BTC allowed which would not happen because BTC price is above SMA200 (so I would hold Fiat)
4. SMA100 > SMA200 so only BUY BTC allowed which would not happen because BTC price is bellow SMA200 (so I would hold Fiat)
5.  SMA100 < SMA200 so only SELL BTC allowed which would not happen because BTC price is above SMA200 (so I would hold Fiat)
6. SMA100 > SMA200 and BTC price>SMA100  = BUY BTC (Entry)

Problem is, that on step 1 you exit on level 4608$/BTC and next entry might come at level 4620$/BTC so you realised 12$ loss because 4608$ doesnt buy you a wholle BTC any more.

QUESTION WHICH ARISE is whether the gap between step 1. and 5. when I was holding a fiat, could be covered by other trades made out of "bad area".

Backward test is promising, but execution real/time would be much harder.



 

I have tried this together using with stochastic and rsi which it is really good for active trading but most of the times these technical analysis wont really work noticing the volatility of cryptocurrency which is more  than on forex and knowing the market is really unpredictable on which we would really be confused on where do prices go.

Entry/Exit
•   Buy BTC - when BTC price is above SMA100, and SMA100 is above SMA200
•    Exit BTC and hold fiat  - when BTC price is below SMA100 and half way to SMA200
Check a photo of entry&exit here> https://www.yogile.com/m73sxue6#21t

NOTE> Second entry, need some extra rules to lay down as it set a lot of space for subjective decision where and when to enter. BIG PROBLEM!

Entry/Exit
•   Buy BTC - when BTC price is above SMA100, and SMA100 is above SMA200
•    Exit BTC and hold fiat  - when BTC price is below SMA100 and half way to SMA200
Check a photo of entry&exit here> https://www.yogile.com/aovuxg7c#21t

I completely disagree with the second part of your statement about bear market, let me elaborate why. Lets assume that three consecutive days a value of BTC is falling against $, each day 2%.

The guy 1 with buy and hold strategy would realize 6% loss.

The guy 2 with would realize smaller than 6% loss because of holding fiat when market price is bellow the 100SMA and 100SMA is bellow 200SMA. That could result in BTC sell off when it was lets say 4400$ and buyback at price 4136$ or -6% (-264$). So this guy would able to buyback 1.06BTC in ideal scenario.

BEAR MARKET - downtrend BTC/USD
Guy1 result