Wednesday, 30 October 2019

Scaling in Trading Strategy

 

scale in strategy

 

 

 

What's Scaling in?

 

It's to open multiple units at different price levels to maximize your profits . Simply, when a trader opens a position, he waits until some circumstances happen to add other positions to his current one. It's considered an advanced strategy because it rises your risks if the market goes against you.

In this article, we will discuss three conditions traders should add to their current open positions. 

  1. Moving Averages


In this approach, we use three different moving averages: 5-day EMA (black line), 20-day EMA (purple line) and 50-day EMA (orange line).

Let's take an example. Below is the ETH/USD daily chart.

Firstly, we opened a short position when 5-day EMA crossed under 20-day EMA. Then a bearish confirmation is confirmed as 20-day EMA broke down 50-day EMA. To add more short positions, we waited for any rebound from both 20 and 50 EMA. The more the price rebounds from the them, the more reliable our trades will be.

We placed our stop loss for fresh positions just above the 50-day EMA and trail the stops for old positions also above the 50-day
in order not to miss the profits.
In our trades below, we expanded our profits much and never got out of the market early.

GBP CHART

Take another example, we applied the same rules to the GBP/USD chart below and maximized our profits to its most. Notice how the rebounded from both 20 and 50 EMA gives us great opportunities to add more profitable positions.



Also, this is a Gold daily chart. We went long when 5 EMA crossed above 20 EMA. Then, we added more long positions when the price touched the 20-day EMA several times.





Moving Averages Trading Strategy







2. Breakout/ Break down


As you can see from the chart below, GBP/JPY has formed a descending channel. In descending channels, the upper line is considered as resistance while the lower line as support level. 

* Let me remind you of some basic technical analysis " When resistance breaks out, it considered as a bullish sign, whereas when support breaks down, it considered as a bearish sign"

Therefore, traders should short at the upper line of the channel and take profit at the lower line.

 However, in our example below, the price plunged below the lower line ( the support), as a consequence we added more short positions. Notice how the price rebounded from the lower line of the broken channel, so we took it as a confirmation signal to add more shorts. After our trades, we easily doubled our profits.

HT/USDT

You can take the XAU/USD chart below as another example of this method.

3. Fibonacci Retracements



Fibonacci retracement is a method of technical analysis for determining support and resistance levels. Fibonacci retracement is based on the idea that markets will retrace a predictable portion of a move, after which they will continue to move in the original direction.

In our example below, we have an earlier long position. When the price started to correct, we implemented Fibonacci retracement on the chart to determine the possible support levels.

As you can see from the chart, the 0.382 Fibonacci level provided great support. It held the pair many times. Hence, we bought more units.

Amazingly, the chart gives us another great opportunity to add more profitable units when it breaks up the previous high and
Fibonacci ratios. 0.0%.


As we discuss Scaling in strategy in this article, there is also Scaling out strategy we will go over it in future post.


Exit Strategies to Protect your Capital



Sunday, 22 September 2019

LTC/USD, LTC/BTC Price Analysis: LTC Shows Slight Gains

LTC Price Analysis

LTC/USD


LTC dipped back from the $81 level on Sept. 19. it's 23.6 Fibonacci level. It broke down the 50-day EMA. Also, it's now trading inside a small ascending channel. If the pair breaks down the channel, a fall to $62 strong support is likely. This is an important level. If the price slips below it, the downtrend will resume.

On the other hand, bulls need to push Litecoin above $81 level to change the trend.The first target is $100 and above it $114. Therefore, traders can buy on a close above $81 level.

LTC/BTC


LTCBTC PRICE ANALYSIS

LTC/BTC dipped back from 0.008 level. It's trading below the 50-day EMA. Now the pair finds support from both 20-day EMA and the trend line. A break above 0.008 level can carry the price to 0.01. Traders should wait a close above 0.008 to initiate fresh position.

Saturday, 21 September 2019

Ethereum Shows Recovery: Bulls Jump In Again

ETH BULLISH


Daily Chart


Ethereum breaks out both 20 and 50-day EMA. Also, a golden cross between moving averages is about to happen. RSI shows that the power is in bulls' hands. All of these show that the trend is changing from down to up.

ETH/USD has rebounded from the trend line shown in the chart and it found support from 0.236 Fibonacci level at $212. The bulls will try soon to propel the pair above the trend line and carry it to the next target at $240 thereafter to $265.

On the way down, the moving averages will give us a great opportunity to buy Ethereum at good levels with stop loss below them.

4h chart eth

4H Chart 

In the 4H chart, you can see clearly how the 20-day EMA provides good support. Below is the 50-day EMA that may hold any correction.The main resistance level is at $240. If bulls successfully break above it, a strong uptrend is expected to start.


Tuesday, 10 September 2019

ONT Price Prediction: ONT Saw Some Gains

ONT(Ontology) Price Outlook


ONT has finally broke up the 20-day EMA which is the first sign of recovery. RSI is still showing bullish divergence. As we stated in our last analysis, the trend line and the 50-day EMA will be the next resistance zones. Today the price has rebounded from the trend line. Traders should go bullish when the pair closes above the 50-day EMA. Above this level, a rally to $1 is probable.

In the downside, 20-day EMA will be the first support now, thereafter $0.68 level.

ontology analysis

ONG Price Outlook

ONG is in consolidation now. It is trading below the moving averages which is negative. The area between the moving averages will act as a stiff resistance. If the bulls succeed to break above it, a move to $0.25 is likely.

ong analysis

Friday, 6 September 2019

ONT (Ontology) : Moving Averages Fight Any Recovery

ONT ANALYSIS CHART 2


 

After the breakdown of the uptrend line, ONT/USD is trading in a range-bound condition. The main resistance right now is the 20-day EMA. Look at the chart and see how this moving average is a great hurdle for any recovery. This shows that the trend is down. Above the 20-day EMA there are the trend line and 50-day EMA. We suggest traders open long positions only if the price breaks out the 50-day EMA.
If the bulls successfully carry the pair above both the moving averages, a rally to $1 level is likely. Thereafter to $1.20.

On the other hand, bears weren't be able to drag the price below $0.68 level, this shows that the selling pressure isn't strong yet. However, if the buyers don't come in soon, the bears will try to sink the pair below this level and extend the fall to $0.50. 

Therefore, we don't recommend open fresh positions at current  conditions.


BTC, ETH and LTC Price Analysis

Cryptocurrency Analysis

Bitcoin Price Outlook


Bitcoin breaks above the moving averages which is positive. A golden cross between 20-day EMA and 50-day EMA is about to happen. Moreover, the pair has formed a huge symmetrical triangle. Traders should wait for a break out above the downtrend line to initiate fresh long positions. The price target of the breakout is around $13,000. The RSI is in favor of the bulls.

In the downside, $9080 is proved to be good support. The bulls will defend this level aggressively. If it breaks down, it may indicate a change in the trend.


bitcoin analysis chart

Ethereum Price Outlook


Unlike Bitcoin, Ethereum looks less bullish. It's still trading below the moving averages. The 20-day EMA is a real hurdle for the pair to advance. Most importantly, ETH/USD breaks down the uptrend line, which is negative. Traders should carry the price above the 20-day EMA to start the recovery. Above this level, 50-day EMA will be the next hurdle. For now, we can't see any reliable buy set up.

For supports, $163 will be the first one, thereafter $147.

ethereum price analysis

Litecoin Price Outlook


Litecoin is in the hands of the bears. The price has corrected below the 0.618 Fibonacci retracements of the entire rally from the low of $22 to the high of $146. Other resistance can be seen from the downtrend line and moving averages. A successful break out of the downtrend will resume a strong uptrend.

On the downside, if bulls can't clear the resistance, a revisit to the recent low at $62.20 is more likely to happen.

ltc price analysis


Sunday, 1 September 2019

GBP/USD, EUR/USD Technical Analysis


General overview of GBP/USD

Prime minister Boris Johnson intends to suspend Parliament from September 12 until Oct. 14. The opposition party said it could trigger an emergency debate in parliament next week to try to prevent Prime Minister taking Britain out of the EU without a withdrawal deal. This is a negative environment for GBP.


Daily Chart Technical Analysis

 

GBP/USD Chart

 

The major trend is still bearish. GBP/USD is trading below the moving averages. They are behaving as  stiff resistance for the pound to advance. On the upside, $1.23 will be the first hurdle for the bulls if it is broken it may trigger a rise to $1.2345 and to 50-day EMA.

However, $1.2100 will be the first support as it's the Psychological level. A break below it may carry the sterling to $1.2020.

 

General overview of EUR/USD

EUR plummeted against USD as German inflation slowed in August and unemployment rose. This shows that the largest economy in EU is slowing. Additionally,  traders priced in a rate cut by the European Central Bank as its policy meeting on September 12.

Daily Chart Technical Analysis

 

EUR/USD Chart

 

 The main trend is bearish. If the fall continue the first support will be at $ 1.0960, thereafter  $1.0900 level.

On the upside, EUR/USD will face resistance from $1.1060 level. If it breaks out, it may go to $1.1100 the Psychological level. It's very important level as the 20-day EMA is located there too.

 



Sunday, 25 August 2019

ETC Shows Bullish Signs

etc bullish

 

 

General View


ETC was one of the best performer coins in the last five days. The main reasons for this bull run are the forthcoming Atlantis hard fork, which aims to develop high-quality blockchain software that preserves the security of the network. Additionally, Ethereum Classic Labs announced North Block Capital as part of the ETC Labs’ Studio program. They will work together on creating comprehensive token sale initiatives for North Block Capital investments, clients and partners.


Daily Chart Technical Analysis 


ETC/USD is trading above the moving averages which is positive. Also, RSI is in the overbought zone which confirms the upper hand of the bulls. 

If we look at the daily chart,we will see a bullish flag formation. This is a continuation pattern. To validate this pattern, the price should break out the upper line of the flag usually accompanied by volume. The price target of the break out is $9.50. Therefore, traders should go long on a breakout of the flag.

The pair is also completed a double bottom pattern that confirms our bullish view.

In the downside, $6.80 will provide  good support. We will stay bullish as long as Ethereum Classic stays above the moving averages.

ETC chart


Thursday, 22 August 2019

Ethereum and Ripple Price Indicate Slight Recovery

 Ethereum and Ripple Price Indicate Slight Recovery

  

Ethereum Daily Technical Analysis

 

The main trend is still up according to the daily chart. The pair is trading above the main uptrend line which is quite positive. Also, on the RSI, there is a bullish divergence that shows a potential reversal in price, but it needs confirmation from other indicators.

On the other hand, the rebound from the main uptrend line is stopped by both 20-day EMA and the trend line 1 as expected in our last analysis. 
Ethereum needs to scale above 20-day EMA to resume the uptrend. As long as the main uptrend line holds the price, ETH/USD will be bullish in long term. Conversely, if it breaks down, it may indicate a change in trend and a fall to $150 will be in the cards.

ETH Price Slight Recovery

XRP  Daily Technical Analysis

 

XRP broke down the main support on Aug. 13 which is a negative sign. It was the psychological support since Dec. 13. 2018.      Additionally, it faces stiff resistance from 20-day EMA. Both 20-day EMA and the previous main support are at the same level now. If the pair sustains below the resistance, it may fall to a $0.24 level.

Traders should initiate long positions only if  ripple goes above 20-day EMA. Until then stay in the sideline.

Ripple Dialy Chart Analysis

Tuesday, 20 August 2019

Stellar Price Analysis: Traders Wait For a Positive Movement

Stellar is trading under the moving averages. XLM/USD hasn't been able to break above the 20-day EMA. You can see the chart and notice how 20-day EMA ( black line) forms a strong barrier for XLM to advance. Additionally, the pair has broken down $0.072 support level. Both $0.072 and 20-day EMA are nearly at the same level.

  The bulls needs to get the price above these two resistance to resume the uptrend. If they succeed, Stellar will move up to 50-day EMA, then to $0.093 level.

 If the price sustains below the critical support for a long time, it will be negative for Stellar. It's not recommended buying under resistance, therefore, traders should wait until a new buy setup appears.

XLM Chart Analysis



Sunday, 18 August 2019

ONT (Ontology) : RSI Shows Bullish Divergence

ONT plummeted under the uptrend line on Aug.15, it acted as strong support before, so it may behave as resistance now. The pair tried unsuccessfully to scale above the uptrend line in the last three days. Additionally, ONT/USD is trading under the moving averages.

However, the only positive thing now is that the bullish divergence on RSI which indicates a potential reversal in price soon. It must be noted that RSI divergence is misleading in some cases. Therefore, we need other bullish confirmation signals before we go long on ONT. The price must break up the trend line then scale above the 20-day EMA.

If the trend line shows strong resistance, we may see another dip to $0.69 then to $0.50.


ONT Price

Friday, 16 August 2019

NEO Signs Of Weakness

NEO has suffered lately from the general weakness of Cryptocurrencies. 

After repeated retests of the uptrend line, bears succeeded to drag the price below it. It is a bearish sign. Additionally, NEO is trading below the moving averages and RSI is in the negative zone. All of these show that sellers have the upper hand.

The next support to watch now is $9.18. On the other hand, if the price breaks down of $9.18, it may drop to $6.80.

Bulls need to push the pair above the uptrend line to start a recovery. You shouldn't buy a fresh position as long as the pair sustains below the uptrend line. As we recommended in the last analysis, traders should buy when price breaks up the 20-day EMA. 



NEO Analysis Chart

Litecoin Looks More Bearish Than Before

LTC Chart

Litecoin plummeted below the support of $76 and is trading under the moving averages. Most importantly, it completed a well-known reversal Head and Shoulders pattern when the price plunged below the neckline. These developments tell us that the worse is still to come.

In this pattern, it's common that price retests the neckline before continuing its course down again. To neglect this pattern, the price must go above the neckline again. 

If LTC struggles to break above the neckline, bears will seize the opportunity to push the price lower.  

The next support levels are $70 then $60.

To resume the uptrend, the pair should breakout both the neckline and 20-day EMA. 


LTC Analysis

Thursday, 15 August 2019

Ethereum Price Analysis: Ethereum Struggles to Recover


 ETHUSD Chart

 

As the sentiment in the whole Cryptocurrency is weak at least in a short term, Ethereum couldn't scale above the moving averages. Both the 50-day EMA and 20-day EMA make it hard for ETH/USD to advance. Moreover, Ethereum lost the battle with moving averages and breaks down the uptrend line 1 and $190 level. It's a 61.8% Fibonacci level of the rally from $80 to $363.

The price has tested and rebounded from the main uptrend line, it's the main and only major support for Ethereum, but if that support also breaks down, the fall can extend to $150 level.

RSI confirms the weakness of the bulls. The trend line 1 and the 20-day EMA are at the same level,therefore, traders should expect  strong resistance from them.

Traders should be on the sideline at the moment until a clear buy setup appears.


Bitcoin Price Analysis : Bears Take Profits

 

 
Image by mohamed Hassan from Pixabay

 

Bitcoin Price Outlook

 After the failure of the bulls to penetrate the downtrend line, BTC/USD has fallen hard in the last couple of days. The downtrend line is the best place for the bears to take profits. The pair dipped below the 50-day EMA moving average and the ascending channel which shows the weakness of the bulls in the short term.

 

BTC Price Chart


 

However, BTC  has bounced back today from the 100-day EMA, below it the $9080 level will act as a strong support. Traders should defend this support strongly. If it breaks down of $9080 level, Bitcoin may fall to $7455 level and it will turn negative.

 

Any recovery attempt from the bulls will face resistance from the moving averages and the lower line of the ascending channel.Also, the zone between $10,000 and 10,450 will be a critical place for the bulls if they want to resume the uptrend movement.

 


Saturday, 10 August 2019

Exit Strategies to Protect your Capital

Exit Strategy is a very important approach for any trader who wants to keep his capital from disappearing. Any successful trader can lose, but what differentiate successful traders than others is how much loss can they accept. They cut their loss short. Traders must avoid catastrophic losses by all means, and they can achieve this by using Exit Strategy.

Exit Strategy is also important for traders who are in profits and don't want to turn their profits into loss by choosing the right time to get out of the trade.

There are several Exit Strategies out there, but we will focus on three kinds in our article.


1. Moving Averages 

In this strategy, we use 20-day EMA with 50-day EMA. You can also use it with different EMAs length or time frames to see which best for you.

 The strategy is so simple, we exit our trade when 20-day EMA crosses under 50-day EMA. As a confirmation, you can wait for the price to retest the 50-day EMA and bounce back off it.

In the ETH/USD chart below, 20-day EMA crosses under 50-day EMA, this is the first signal of a trend reversal, so we waited for the price to touch back the 50-day EMA as a confirmation and exit our trade. Traders may also take this signal to open short positions.

  After we closed the trade, Ethereum has declined sharply.


Exit Strategy Gols chart
Let's take another example, below is the GOLD daily chart. As you can see 20-day EMA crosses under 50-day EMA. Also, the price touched back the 50-day EMA. Therefore, we exited our trade.

After we exited the trade, Gold fell more than 10%.








2. Head and Shoulders

Head and shoulders is a well-known reversal pattern. When spotted in charts traders expect a reversal in price is more likely to happen. You can see them on all charts length. It consists of a head ,two shoulders and a neckline as shown in the chart below. To validate the pattern, price must break down the neckline.

The exit point should be placed below the neckline. In some cases, the price may retest the neckline before it resumes its way down. Thus, retests of the neckline may be taken as a confirmation to exit any open positions. 

In HT/USD daily chart below, the Head and Shoulders pattern is  spotted in the chart, so we placed our exit point just below the neckline.

After we closed our open position, HT/USD plummeted from $4 to $1.50.


Exit Strategy HTUSD  Chart

3. Trend Line 

  When a major trend line is broken, it is a signal of a trend reversal. We should exit once the trend line is broken. Usually, the price retests the trend line before continuing the fall.

Below is USOIL daily chart, the price broke down the uptrend line, thus, we placed our exit point below the trend line.

 

Exit Strategy OIL Chart

  Now, let's use two exit strategies in one chart. I will use the same above chart for my example. I employ the trend line and moving averages strategies on the USOIL chart. Notice how amazingly the two strategies gave us the same exit point. We exited the trade with confidence.

After our exit, OIL dropped more than 20%. 


Exit Strategy Oil Chart



Tuesday, 6 August 2019

NEO Struggles to Clear Resistance

NEO Analysis




NEO finds it difficult to clear the 20-day EMA. Also, it bounced back from the 23.6 Fibonacci level at $12.35 for several times. RSI is in the middle, testing the resistance line.

The only support left is the uptrend line, which price tested numerous times before. It is a very important support for the bulls. If it is broken, it will trigger many stop losses by the bulls to cover their positions, which could drag NEO to $8.50 level.

Traders should keep NEO above the uptrend line and then push the price above the 20-day EMA to resume the uptrend.

 Traders should watch out  the uptrend line more carefully in the coming days. They can open fresh positions on a breakout of the 20-day EMA.



Monday, 5 August 2019

Bitcoin Climbs Near $12000, Will the Surge Continue?


Bitcoin analysis

Daily Chart

 
Bitcoin has built solid support around $9100, from where it started to skyrocket. After successfully scaled above the moving averages, BTC/USD rallied to the downtrend line, where it may face some resistance. 

If Bulls can clear this hurdle, Bitcoin can move up to $12,800, thereafter to the recent high of $13,900.

However, moving averages will act now as support levels for any correction. Since Bitcoin is trading now at the downtrend line we don't recommend open any fresh positions now. Traders should wait for a breakout of the downtrend or a correction to the supports to initiate long positions.

4H Chart

 On the 4H chart,  the 20 EMA has completed a crossover with 50 SMA which is a bullish sign. Also, 20 EMA provides great support for Bitcoin.

4h bitcoin chart

Friday, 2 August 2019

XRP Price Prediction: Ripple remains near main support

Image by Miloslav Hamřík from Pixabay

XRP is attempting to clear the 20-day EMA. It is the main major resistance right now. If traders succeed to take XRP above the 20-day EMA, it may go up to 50-day SMA, where traders may face stiff resistance. Ripple will take a boost when both moving averages are scaled. Above the moving averages, traders should target $0.45 and $0.50 levels respectively. 

However, XRP is trading near the long term support at $0.28. It's the psychological main support, thus, bulls should defend it viciously. A breakdown of this main support will be a negative sign.

RSI is in the middle which shows Ripple is in a consolidation period.
Traders should initiate long positions on a breakout of the moving averages or at the main support at $0.28 with a stop loss just below the main support line.

XRP CHART



Monday, 29 July 2019

ONT (Ontology) Price Prediction: Moving averages make it hard to advance


 
Ont chart
NEO Chart


ONT faces strong resistance from the 20-day EMA. Also, ONT is trading below all the moving averages which shows the bears have the power at least in the short term. ONT has corrected close to 78.6% of the entire rally from the low of $0.40 to $2.17 and this is also a negative sign. 

 Although ONT has rebounded from the uptrend line,  the 20-day EMA needs to be scaled to resume the uptrend. If ONT remains under the 20-day EMA, a retest of the uptrend line is more likely to happen again. It is very important support, if it is successfully broken down, a retest of the recent lows of $0.40 will be in the cards.  

 There are not any reliable buy setups, thus, traders shouldn't open any fresh positions at the current situation.

Sunday, 28 July 2019

Ethereum Price Prediction: Eyes on $190 level


ethereum analysis



In our last analysis ,we expected a retest of the uptrend line and that's what happened. However, the rebounded from the trend line wasn't strong enough to scale above the major resistances. This shows that the bears seize any opportunity to sell on higher levels. 

Ethereum has corrected close to 61.8% of the entire rally from the low of $80 to $363. This level acted as strong support before, it's around $190. If Ethereum plummets and closes below $190, it can fall to $140 level.

ethereum chart


On the upside, Ethereum needs to scale above the 20-day EMA  to resume the uptrend. As long as Ethereum is trading below the moving averages, traders should patiently wait before opening any fresh positions.


Saturday, 27 July 2019

Moving Averages Trading Strategy



Moving Averages Crossover CHART
Moving Averages Crossover


We can use Moving Averages in numerous trading strategies but in this article, we will focus on A crossover strategy.

This strategy works when the market is trending, but if the market is choppy or moving in sideways,this strategy may provide false signals.

In this strategy, we use 5-day EMA with the 20-day EMA crossover. You can test different EMAs length or time frames to see which works best for you.

 To eliminate false breakouts, we should use another tool as a support of our view. In our strategy, we will use the Volume as a confirmation tool.

We open long positions when 5-day EMA crosses above the 20-day EMA accompanied by high volume. We open shorts when 5-day EMA crosses below the 20-day EMA accompanied by high volume.



Let's take an example, below is a daily chart of Gold, as you can see the 5-day EMA crosses above the 20-day EMA. Notice how the volume increasing after the breakout, thus, we take it as a confirmation to open a long position.

After this breakout Gold made a significant profit.

Moving Averages Crossover2

Let's take another example which gave us two signals. This is ETHUSD daily chart. Firstly, the 5-day EMA crosses above the 20-day EMA accompanied by huge volume which validates our buying position. After the breakout, Ethereum rose more than 50%.
 


The second signal came when 5-day EMA crosses below the 20-day EMA, also the volume increases compared to the previous days, thus, we opened a short position with confidence. Ethereum declined from $280 to around $200 after the breakout.
Moving Averages Crossover eth

Now, let's take an example of false signals. Below is a daily chart of EOSUSD. As shown from the chart in the late of April, 5-day EMA crosses below the 20-day EMA, however, the volume was weak which doesn't support a bearish view. Look carefully how the volume goes up each time 5-day EMA is above the 20-day EMA, which indicates the bullish view is still strong.

Moving Averages Crossover eos
Even if we can make some profit using this strategy during a sideways market, but we don't recommend trading it to avoid false breakouts.

Moving Averages Crossover xau