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A Simple System In Trading And What To Do With Bitcoin

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@taskmaster4450le
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It is proven, repeatedly, that those who trade make more money as compared to buy and hold. That said, there are many reasons for those who do not want to be bothered just socking things away.

However, with a few simple moves, we can easily increase our returns by avoiding the major drawdowns.

In this article I am going to go through a very simple analysis that I found works well for swing trading.

Bear in mind this is not financial advice just a system I used over the years.

To start, we set up a chart using the 5 EMA and 13 EMA. We are seeking crossovers as signals to buy or sell.

Here is a 6 month chart of Apple.

Notice how when the 13 crosses over the 5 EMA to the downside, it is time to sell. This showed up February.

The flip side took place early April when the 13 crossed over the 5 EMA to the upside. As we can see, using these parameters, we would still be in the trade.

Here is a look at the SPY, the ETF for the S&P 500.

Using these parameters, it is worthy to watch since the 13 is close to crossing over to the downside.

Here is Tesla.

As we can see, we give up a little on the top side and the bottom. The point is not to catch either, but to benefit from the moves in between. This allows us to catch major moves while not pulling out too early.

Let us look at Bitcoin. Many question where it is going next. I used the GBTC so it could differ slightly from the currency.

As we can see, Bitcoin is still looking like a long play. Of course, watching the $10K level could also post a challenge.

With any type of system, it is vital to stick with it. There are times it will show false moves. Nothing is 100%. We are simply looking to increase our odds of success and, thus, increase our the value of our accounts.

I find this works well with those long terms holdings that we are confident in. Something that is going to gain value over the long term, such as Apple experienced, will be added to by avoiding the major draw downs.

Obviously, it is far easier to trade in markets that are moving one direction or another as opposed to those that are going sideways. Side way markets will give false positives.

Nevertheless, it can be a good way to enhance one's long term holdings.


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Posted Using LeoFinance