#Notcoin Excellent! Here is a detailed explanation of a trading strategy based on momentum in the cryptocurrency market, suitable for day traders
🔥 Momentum-based trading strategy in crypto
🎯 Objective:
Enter trades when momentum is strong, and exit before it weakens.
1. ✅ Required Tools:
RSI Indicator (Relative Strength Index)
MACD Indicator (Moving Average Convergence Divergence)
50 and 200 Day Moving Averages (EMA or SMA)
1-hour, 4-hour, or daily time chart (depending on the type of trading)
2. 🔍 Conditions for entering a buy trade
Price above the 50 and 200 moving averages → indicates an upward trend.
RSI between 50 and 70 → positive momentum without overbought condition.
Bullish MACD crossover → MACD line crosses above the signal line from below.
Bullish confirmation candle on the chart.
📌 Stronger signal if:
A golden cross occurs: EMA 50 crosses above EMA 200.
3. 🔻 Conditions for entering a sell trade (Short):
Price below the moving averages → downward trend.
RSI between 30 and 50 → negative momentum.
Bearish MACD crossover → MACD line crosses below the signal line from above.
Bearish confirmation candle.
📌 Stronger signal if:
A death cross occurs: EMA 50 crosses below EMA 200.
4. 🎯 Setting targets and stop loss:
Target (Take Profit):
You can use a fixed percentage (for example, +5% or +10%)
or when RSI reaches an overbought level (for example, RSI reaches 75)
Stop Loss:
Below the nearest support (for buying)
Above the nearest resistance (for selling)
or a fixed percentage like -3% or -5%