#SpotVSFuturesStrategy
Here's a simple spot or future trading strategy,
Strategy: Trend Following with Moving Average Crossover and RSI Confirmation
This strategy focuses on identifying and riding established trends while using confirmation signals to minimize false breakouts.
* Identify Trend: Use the 50-period Simple Moving Average (SMA) and 200-period SMA on your chosen timeframe (e.g., 4-hour or daily). A bullish trend is indicated when the 50 SMA crosses above the 200 SMA (golden cross), and a bearish trend when the 50 SMA crosses below the 200 SMA (death cross).
* Entry Signal:
* Long (Spot Buy / Futures Long): Enter when the 50 SMA is above the 200 SMA, and price pulls back towards the 50 SMA, then bounces higher. Confirm with the Relative Strength Index (RSI) crossing above 50 (from below), indicating increasing bullish momentum.
* Short (Spot Sell / Futures Short): Enter when the 50 SMA is below the 200 SMA, and price rallies towards the 50 SMA, then rejects it. Confirm with the RSI crossing below 50 (from above), indicating increasing bearish momentum.
* Stop Loss: Place your stop-loss order just below the recent swing low for long positions, or just above the recent swing high for short positions.
* Take Profit: Consider a 1.5x to 2x risk-to-reward ratio, or trail your stop loss once a significant profit is established to capture more of the trend. Alternatively, exit when the 50 SMA crosses back through the 200 SMA in the opposite direction, or when the RSI becomes overbought/oversold, indicating potential reversal.
Risk Management: Always risk only a small percentage (e.g., 1-2%) of your total capital per trade. This strategy can be applied to various assets like cryptocurrencies, forex, or stocks in both spot and futures market