Here is a popular and tested trading strategy on the hourly timeframe (H1), based on classical indicators and clear rules, suitable for beginners and intermediate traders:
Strategy: "Moving Average + MACD + RSI" (trend strategy with overbought filtering)
Tools used:
1. Moving Average Indicator (EMA 50 & EMA 200)
- To determine the general trend.
2. MACD Indicator (12, 26, 9)
- To confirm momentum.
3. RSI Indicator (14)
- To filter overbought in buying/selling.
Entry rules (buy/sell):
1. Buy trades:
- Conditions:
- EMA 50 is above EMA 200 (bullish trend signal).
- MACD indicator crosses the signal line upwards (in the positive area or near zero).
- RSI indicator above 50 (preferably between 50 and 70 to avoid overbought conditions).
- Entry: when a bullish candle closes above EMA 50.
2. Sell trades:
- Conditions:
- EMA 50 is below EMA 200 (bearish trend signal).
- MACD indicator crosses the signal line downwards (in the negative zone or near zero).
- RSI indicator under 50 (preferably between 30 and 50 to avoid overbought conditions).
- Entry: when a bearish candle closes below EMA 50.
Trade management:
- Stop loss (SL):
- For buying: below the last local bottom or under EMA 200.
- For sell: above the last local peak or above EMA 200.
- Take profit (TP):
- First target: double the risk (1:2 Risk/Reward).
- Second target: when the price approaches EMA 200 (in the opposite direction).
• A practical example of the strategy on the 1-hour timeframe, BTC/USDT pair
Assuming the price of Bitcoin is $94,000
Scenario: Bullish trend confirmed by indicators
1. Trend analysis (EMA 50 & EMA 200):
- EMA 50 Indicator (blue): at $92,800.
- EMA 200 Indicator (red): at $90,500.
- Signal: EMA 50 above EMA 200 → Strong bullish trend.
2. Entry signal (buy):
- MACD Indicator (12, 26, 9):
- The main line (blue) crosses the signal line (orange) upwards at the +150 area.
- RSI Indicator (14): at 58 (above 50 without overbought conditions).
- Candle: Closing a green candle above EMA 50 at the price of $93,200.
3. Executing the trade:
- Entry price: $93,200.
- Stop loss (SL): below the last local bottom at $91,500 (also below EMA 200).
- Profit targets:
- First target TP1: $95,000 (previous resistance + 1:2 Risk/Reward ratio).
- Second target TP2: $96,500 (near the historical peak if momentum continues).
Illustration (default):
Current price: $94,000
▲
│ TP2: $96,500
│ /
│ /
│ TP1: $95,000
│ /
│ Entry: $93,200 ────────•
│ \
│ SL: $91,500
│
─────────────────────────────────────────
---
Interpreting potential results:
1. If the price reaches TP1 ($95,000):
- Close 50% of the trade to secure partial profit.
- Move SL to breakeven ($93,200).
2. If the price reaches TP2 ($96,500):
- Close the entire trade with a total profit of $3,300 per contract.
3. If the price reverses and drops to SL ($91,500):
- Loss limited to $1,700 per contract.
• Important points to adjust the strategy:
1. High volatility:
- Increase SL distance to avoid being stopped out due to sudden volatility.
2. Active trading times:
- Focus on high liquidity periods (like the opening of the NYSE or Bitcoin news announcements).
3. Monitor trading volumes:
- Confirm signals with increased volume to enhance credibility.
4. Focus on support and resistance areas.
• Special warnings for Bitcoin:
- Influential news: such as fluctuations in the stock market or changes in Fed policy may suddenly affect the price.
- Liquidity: Avoid trading during quiet market hours (like weekends).
• Important points to increase accuracy:
1. Trade in the direction of the larger trend (on a higher timeframe like H4 or daily).
2. Avoid trading when RSI is overbought:
- If RSI > 70 (in buy trades) or < 30 (in sell trades).
3. Use economic news: avoid opening positions before significant news.
Strategy Features:
- Simple and works on all currencies.
- Suitable for beginners as it relies on clear indicators.
- Can be combined with support and resistance to increase accuracy.
Warnings: do not perform well in sideways markets (use them in clear trends).
This strategy is popular because it combines trend identification (EMA), momentum (MACD), and overbought filtering (RSI). Try it with tight risk management.
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