Weighted MA: Moving Average is always profit
- VFX Blog
The dispute can be used on cryptocurrencies "classic" technical analysis tools has been going on for many years. Yes, crypto market has no real economic content and is highly speculative. But, you can get a stable profit on indicators. Let's see how to do it on the time tested Moving Average variant
Type: Trend & Channel
Timeframe: Any in the range M1-M5. In our case, M1 is used, but with an increasing period of analysis, the accuracy of the signal increases.
Trading asset: Any options trading signals. The main requirement is a fixed (2-3 points) spread and no hidden fees.
Trading time: All Forex trading sessions.
Percentage premium option: Not less than 70-75%.
The strategy uses two technical indicators:
- Five Weighted Moving Averages (WMA). With periods of 5, 14 and 15, there will be "fast" ones, for which we will consider crypto trading signals on short pullbacks and corrections. The open / expiration points for options will be between or above them. WMA with a period of 30 will be "slow", defining the general direction and points of the beginning of the trend reversal.
- RSI with a period of 14 and an additional level of 70/30. Trend indicators must necessarily be confirmed by at least one oscillator indicating an overbought, when buyers can no longer move the price up, or oversold where there is almost no one in the crypto market to sell at lower prices.
After installing the indicators on binary options charts, we look at the examples of signals:
Crypto trading signals:
- UP (CALL) – option. The price is above all WMA, the RSI is moving up from the overbought zone or above the 50 level.
- DOWN (PUT) – option. Opposite crypto signals: The price is below the WMA, the RSI is moving out of overbought or moving below the 50 level.
Important: WMA has less delay than simple and exponential ones, but you can't get rid of it completely. If the price breaks through "slow" and the RSI leaves overbought/oversold zone, you can try to open cryptocurrency trades.
Open a trade on the next candle after binary options free signals. The time of expiration of options has to be not less than 15-20 minutes even if as a working timeframe it is chosen of 5 minutes, as in our video.
Recommendations about use …
- After strong trends, RSI, like any other overbought/oversold oscillator, can “trample” for a long time in critical areas or near level 50 without crossing it. At the same time, WMA can give strong crypto trading signals for opening options. To accept these signals to work or not, everyone should decide for themselves, but still, for beginners, it is better to wait for a fully formed entry point.
- Bitcoin will be the basis of any crypto trading strategy. Other currencies follow, albeit with a delay. The Ethereum exception - there are opposite rollbacks and corrections. This is usually the case when publishing important events about the currency, speculative actions are short-term and almost do not occur.
- Day trading crypto on AltCoin is very volatile and strict money management must be followed. The indicated parameters of the indicators showed good results on most assets test them before changing them.
Let`s summarize. Weighted Moving Average will be profitable for many years to come. This is a classic tool that all traders know. The majority will act in the same way "according to the textbook", which means that the probability of a correct prediction is high. Moving Average should be in any crypto signals. But, it shouldn't be the only factor in making a decision. We are always looking for additional confirmation!