Bitcoin moving average trading method

 

Below are examples of 6 types of moving average trading using the moving average chart reading method.

 

 

How to view a moving average chart

 

 

 

 

◆ Long-term moving average resistance

 

If you look closely at the long-term moving average, you can see that the candlestick is resisting the long-term line (red circle shown in the photo). A stock price candle that does not consistently break the long-term moving average will soon come in contact with the medium-term moving average, and This means that the stock may not be supported by the moving average and may turn into a downward trend.

 

 

The first step in real trading using a moving average is to filter out stocks that cannot consistently break through the resistance of the long-term line!

 

 

 

 

◆ Regular arrangement of moving average line and initial arrangement

 

A regular arrangement of the moving average means that the stock price is located at the top and is sequentially positioned from the short-term line to the mid-term long-term line. This is called an uptrend.

 

Uptrend trading using an initial arrangement

The initial alignment is one of the most important factors in moving average trading. If the moving average is in an unaligned section and then changes to the upward direction in the order of the short-term moving average, the medium-term moving average, and the long-term moving average, you can see that the stock price will start an upward trend. If you buy in this situation, you can expect a lot of profit.

 

In particular, if the initial alignment occurs during a sideways trend while the stock price is falling, it can be seen as a perfect initial alignment.

 

 

 

 

◆ In a regular arrangement situation, each moving average acts as a support line.

 

 

At the end of the uptrend when the stock price is aligned, each moving average acts as a support line. They usually show a small rise from the support level, and if the support level is breached, a large decline is likely. You can time the trade by drawing support and resistance lines of a large trend, but you can find the primary support line easily and quickly by using the moving average line.

 

 

 

 

◆ Golden Cross of the shortest moving average

 

In the process where the moving average line is in the correct alignment, the point where the shortest moving average line crosses the golden cross is also the section with the highest probability of rising. Although it doesn't come often, the point when the stock price goes into a perfect alignment is also a sign of a perfect uptrend.

 

The situation in which the short-term line is finally aligned is different from the situation at the beginning of the straight alignment mentioned in Actual Trading 1 above.

 

 

 

 

◆ Dead cross of the short-term moving average

 

The most important moving average in the Golden Cross discussed above is the short-term moving average, and its location was an important point. This time, let's look at an example where the short-term moving average crossed below the mid- to long-term moving average. A straight downward break below the short-term moving average without finding resistance heralds a major downtrend.

 

Conversely, if the medium-term moving average is supported at a time when the short-term moving average is expected to break down, a large uptrend can be expected once again.

 

 

 

 

◆ The Golden Cross of the mid- to long-term baseline

 

 

It can be said that the process of arranging mid- to long-term baselines is also a kind of golden cross. Even if the short-term moving average is already at the top of the uptrend, the golden cross of the long-term moving average often brings a temporary additional rise. It is a good time to expect further short-term uptrend in anticipation of a correct alignment in an uptrend.