Bitcoin: how to always trade cryptos with the trend by your side
As we all know, cryptos are one of the most volatile assets out there (e.g. Einsteinium).
To avoid trading against the general trend, or even trading when I shouldn't (overtrading), I use the Choppiness Indicator.
The Choppiness Indicator is a directionless indicator, so it doesn't go up or down regarding price action. Nor it predicts future movements.
You read it the same way for uptrends and downtrends.
It ranges from 0-100, the lower the number, the higher the trend & momentum (volatility).
When it's above 61.8: Market is moving sideways.
When it's below 45: Market is trending in the same direction of the general trend.
When it's below 38.2: Market is entering a trend period.
When it's below 25: Market is most likely about to have a direction change (reversal).
PRO TIP- Watch especially for supports and resistances. If the price breaks one and the Choppiness indicator points a trend, it may be a strong move. Look at volume!
I usually never trade with a Choppiness Index above 50, since moving sideways (consolidation) won't give me any profits whatsoever.
If the Choppiness Index points toward a trend change, I wait until the price breaks (be it up or down) the MA for an easier spot of such volatile change.
If the Choppiness Index points that the market is in a trend, I see if the price is above the MA for longs and below it for shorts.
To avoid trading against the general trend, or even trading when I shouldn't (overtrading), I use the Choppiness Indicator.
The Choppiness Indicator is a directionless indicator, so it doesn't go up or down regarding price action. Nor it predicts future movements.
You read it the same way for uptrends and downtrends.
It ranges from 0-100, the lower the number, the higher the trend & momentum (volatility).
When it's above 61.8: Market is moving sideways.
When it's below 45: Market is trending in the same direction of the general trend.
When it's below 38.2: Market is entering a trend period.
When it's below 25: Market is most likely about to have a direction change (reversal).
PRO TIP- Watch especially for supports and resistances. If the price breaks one and the Choppiness indicator points a trend, it may be a strong move. Look at volume!
I usually never trade with a Choppiness Index above 50, since moving sideways (consolidation) won't give me any profits whatsoever.
If the Choppiness Index points toward a trend change, I wait until the price breaks (be it up or down) the MA for an easier spot of such volatile change.
If the Choppiness Index points that the market is in a trend, I see if the price is above the MA for longs and below it for shorts.
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