Beginners Guide to Trading Moving Averages for the Crypto Market (2024)

FAQs

Which moving average is best for crypto trading? ›

The Simple Moving Average is an indicator that calculates the average closing price of a cryptocurrency over some number of days. The 50 day and 200 day Moving Averages are the most frequently used by crypto traders.

DCA (Dollar Cost Averaging)

If you're looking for a crypto trading strategy that doesn't involve indicators, then dollar cost averaging (DCA) might interest you. DCA is a popular strategy for both beginner traders and experts alike.

Moving Average Trading Strategy

Here are the strategy steps. Plot three exponential moving averages—a five-period EMA, a 20-period EMA, and 50-period EMA—on a 15-minute chart. Buy when the five-period EMA crosses from below to above the 20-period EMA, and the price, five, and 20-period EMAs are above the 50 EMA.

The strategy uses a 5 period simple moving average (SMA) to determine trend and a 5 period relative strength index (RSI) to confirm signals. It outlines the rules for buying - when price closes above the 5 SMA and RSI is above 50, and selling - when price closes below the 5 SMA and RSI is below 50.

How Does the 5-8-13 EMA Crossover Work? The crossover detects momentum shifts, which can hint at significant price moves in the near term. When the 5-EMA crosses above the 8 and 13 EMAs, it suggests a rising bullish momentum. When the opposite happens, it indicates bearish momentum.

Common Moving Average Periods

Traders and market analysts commonly use several periods in creating moving averages to plot their charts. For identifying significant, long-term support and resistance levels and overall price trends, the 50-day, 100-day, and 200-day moving averages are the most common.

You can make $100 a day trading crypto by trading —

Each of these has its own advantages and disadvantages. Spot markets offer the least amount of risk as you only stand to lose the percentage the market moves at.

Ultimately, some traders feel most at ease trading on shorter time frames like the 1-hour chart all the way to the 1 minute chart. The former is short, but not excessively so, and still allows traders time to assess the market and make judgments without feeling rushed.

There is no single best 1-minute scalping strategy indicator; it comes down to preference and experience. However, popular choices include the Moving Average Convergence Divergence (MACD), Relative Strength Index (RSI), Bollinger Bands, and the Volume Weighted Average Price (VWAP).

What is the most successful moving average strategy? ›

The most accurate moving average strategy depends on various factors such as the market conditions, the timeframe you're trading, and your risk tolerance. However, one commonly used and relatively reliable strategy is the crossover method, particularly the “golden cross” and “death cross” signals.

The SMA formula is calculated by averaging a number of past data points. Past closing prices are most often used as data points. For example, to calculate a security's 20-day SMA, the closing prices of the past 20 days would be added up, and then divided by 20.

This method works by commenting on 5 posts and liking 5 posts within 5 minutes. By doing so you will be able to grow your social media engagement which in turn will increase traffic and potentially lead to more sales for your company.

Clear guidelines: The 5-3-1 strategy provides clear and straightforward guidelines for traders. The principles of choosing five currency pairs, developing three trading strategies, and selecting one specific time of day offer a structured approach, reducing ambiguity and enhancing decision-making.

For short-term trades the 5, 10, and 20 period moving averages are best, while longer-term trading makes best use of the 50, 100, and 200 period moving averages.

Ultimately, it comes down to personal preference. Plot an EMA and SMA of the same length on a chart and see which one helps you make better trading decisions. As a general guideline, when the price is above a simple or exponential MA, then the trend is up, and when the price is below the MA, the trend is down.

9/21/55 EMA Crossover Strategy

The market is uptrend when the 9 EMA is above the 21-period and 55-period EMAs. The market is in a downtrend when the 9-EMA is below the other two. To enter a long trade using this strategy, first, you look out for a cross of the 9 EMA above the 21 EMA while both are above the 55 EMA.