I would like to share a simple strategy I have been experimenting with, that could help you decide when is the right time to enter BTC market and when it is the right time to exit, with great success.
The strategy just makes use of two Hull Moving Averages (HMA) on DAILY TIMEFRAME, one of them is HMA80 to estimate optimal entry point and the other is HMA50 to estimate optimal exit point, it is that simple.
So, how do we estimate the optimal entry point? Very simple, during a DOWNTREND, if DAILY CLOSE PRICE is convincingly above the HMA80, it is an optimal entry point for a LONG/BUY since it means the trend has reversed for the next 2–4 weeks.
And to estimate the optimal exit point, once trend turned to UPTREND: if DAILY CLOSE PRICE is convincingly below the HMA50, it is an optimal exit point SHORT/SELL since it means the trend has reversed for the next 4–8 weeks.
An example using the current chart is below:
It can not be that simple, right? Of course there are some tricky exceptions what we usually call FAKEOUTS. Sometimes Market Makers play games on us and trick us to think the trend is changing. So, how do we detect possible fakeouts?
Below, is a chart explaining possible fakeout detection (Especially when the price closes right on the HMA or very close to it, with a long up/down wick):
This concludes all you need to use this strategy, following are some notes based on my experience with it so far:
- An uptrend change usually requires HMA80 to come down to us, before we climbing on top of it. trying to reach it from far below mostly results in rejections or fakeouts.
- Fakeouts can also be used to play short term positions, you can simply opena SHORT position at daily close when HMA80 is not breeched convincingly and put your stop-loss on top of that day’s wick.
- You can also open a LONG position when HMA50 is not breeched convincingly and put your stop loss below that day’s wick.
- Becareful when playing with possible fakeout positions, they may not end up fakeouts =)