BTC is approaching the 6hr moving average once again. I like to use this as an easy gauge of the market and place longs and shorts off of this trending direction with BTC, so wanted to put this chart out as an update that this strategy will likely be getting some movement soon.
For the first time all year, the 6hr MA is actually trending downward, and this is exactly what we want for using it to open a short position.
It’s infrequent that BTC ever respects this MA perfectly, so there are frequently a series of trades to be made until the next trending move occurs. The key here is that the MA is trending sideways and looking to start moving lower in the near future, so if BTC starts chopping around this MA, this strategy will have us entering shorts on closes below the MA.
There’s several ways this could play out, but just to paint a few pictures here are some examples:
This example below where the MA is either not touched again, or price chops around the MA. If a candle closes on the MA, I would use that for opening a short position as well. If prices chops around the MA, that is when many trades will be consistently opened and closed as the price chops. That is the worst case scenario as it eats up the portfolio a bit while that chopping is occurring, but you have to be aware that is part of this strategy.
Situation could also look something like this one below where price chops for a little, but then goes beyond the MA for a bit before coming back down.
There are many different paths, but the story remains the same. Price action is starting to weaken and the moving average is slowing, so be prepared for closes on or crossing the MA to open up positions to catch the next impulse move from BTC.
BTC is approaching the 6hr moving average once again. I like to use this as an easy gauge of the market and place longs and shorts off of this trending direction with BTC, so wanted to put this chart out as an update that this strategy will likely be getting some movement soon.
For the first time all year, the 6hr MA is actually trending downward, and this is exactly what we want for using it to open a short position.
It’s infrequent that BTC ever respects this MA perfectly, so there are frequently a series of trades to be made until the next trending move occurs. The key here is that the MA is trending sideways and looking to start moving lower in the near future, so if BTC starts chopping around this MA, this strategy will have us entering shorts on closes below the MA.
There’s several ways this could play out, but just to paint a few pictures here are some examples:
This example below where the MA is either not touched again, or price chops around the MA. If a candle closes on the MA, I would use that for opening a short position as well. If prices chops around the MA, that is when many trades will be consistently opened and closed as the price chops. That is the worst case scenario as it eats up the portfolio a bit while that chopping is occurring, but you have to be aware that is part of this strategy.
Situation could also look something like this one below where price chops for a little, but then goes beyond the MA for a bit before coming back down.
There are many different paths, but the story remains the same. Price action is starting to weaken and the moving average is slowing, so be prepared for closes on or crossing the MA to open up positions to catch the next impulse move from BTC.