Combining Stochastic And Bollinger Bands To Trade Bitcoin
Chart
2020 is the halving’s year and the crypto community is putting its expectations on Bitcoin as the cryptocurrency that will lead the rest of the market to new historical highs.
Bitcoin is currently undertaking a consolidation process after the bull run that it had from April to June 2019. Every trader is formulating the same question: When is this correction going to end?
Pinpointing when this turning point is going to take place can be crucial and very profitable for your crypto portfolio. Technical analysis is highly useful to find when this event can happen.
Designing your automated strategy
In this week’s automated strategy we have selected two strategies, the Bollinger Bands and Stochastic.
This combination of a volatility and momentum indicator is intended to spot the moment where the price has decreased sharply and is likely to go back up. By selecting two indicators, it’s more likely that potential negative trades will not be traded.
As can be seen in the Bitcoin chart, the strategy has only opened positions once both indicators were signaling buy. In this case, the strategy has been detecting successfully all the quick falls of the price to open a position at a price level where BTC is more likely to increase.
You can also select the same indicators to sell the previously opened positions. In this way, once both indicators signal sell, it will close the position (unless you take profit or trailing stop-loss would have been hit)
2020 is the halving’s year and the crypto community is putting its expectations on Bitcoin as the cryptocurrency that will lead the rest of the market to new historical highs.
Bitcoin is currently undertaking a consolidation process after the bull run that it had from April to June 2019. Every trader is formulating the same question: When is this correction going to end?
Pinpointing when this turning point is going to take place can be crucial and very profitable for your crypto portfolio. Technical analysis is highly useful to find when this event can happen.
Designing your automated strategy
In this week’s automated strategy we have selected two strategies, the Bollinger Bands and Stochastic.
This combination of a volatility and momentum indicator is intended to spot the moment where the price has decreased sharply and is likely to go back up. By selecting two indicators, it’s more likely that potential negative trades will not be traded.
As can be seen in the Bitcoin chart, the strategy has only opened positions once both indicators were signaling buy. In this case, the strategy has been detecting successfully all the quick falls of the price to open a position at a price level where BTC is more likely to increase.
You can also select the same indicators to sell the previously opened positions. In this way, once both indicators signal sell, it will close the position (unless you take profit or trailing stop-loss would have been hit)