Litecoin - EMA crossing
Hello everyone and welcome to this analysis on LTC:USD.
Reminder on EMA crossing strategy:
-RSI under 70
-EMA 26 crosses EMA 52
-Low volume on MACD (optional)
-4 hours chart
As you can see the technical tool that I am using and has been rewarding to me is based on the EMA 52,26,12 using the 4 hour chart. A crossover of the EMA 52 and 26 is a sign of a beginning of a trend. In this case you can see that the EMA 26 has crossed the EMA 52 representing a start of a bullish short to mid term trend upward.
You can observe that LTC has formed a parallel upward channel, usually on a channel like that the price bounces off the EMA 12 or EMA 26. Depending on the sharpness of the breakout, you will have to choose the 1 hour or 4 hour chart in order to assess which EMA to look at for an entry. In this case, LTC has repeatedly rallied after touching the EMA 12 on the 1 hour chart. My only concern on this trade is that Litecoin is showing a beginning of a bearish crossover on the 1 hour chart. But hey, trading is all about mixed signals...
In order to find an entry, you can switch the timeframe of the chart to 1 hour and then 15 min, that will help you determine a momentum for an entry point. Here if you take the 15 min chart you will see that MACD has negative histograms which is good since we want to enter at the lowest price possible. You have two choice with this set up:
1) Enter right now to prevent a sudden breakout
2) Wait and enter when MACD on the 15 min chart or 1 hour (depending on your risk appetite) has a bullish crossover.
Dotted blue lines: Past highs - direct resistance
Dotted yellow lines: Past historic resistance levels
Aggressive approach:
Long at market
Stop loss just under EMA 26 on the 1 hour chart - that would confirm the break of the upward channel.
Take profit under resistance level (dotted blue line). Which one is up to your risk appetite.
Conservative approach:
Long at EMA 12 on the 4 hour chart
MACD has bullish crossover on 1 hour or 15 min chart.
Stop loss just under EMA 26 on the 1 hour chart
Take profit under resistance level (dotted blue line). Which one is up to your risk appetite.
N.B: This strategy safely works for short term price movements. For example, my take profits are usually between 4 and 8%. Additionally, I use 2% of my portfolio per trade with a risk/reward ratio of 2.
**This is my set up and I am sharing that with you for educational purpose. This isn't, in any case, financial advice.**
Reminder on EMA crossing strategy:
-RSI under 70
-EMA 26 crosses EMA 52
-Low volume on MACD (optional)
-4 hours chart
As you can see the technical tool that I am using and has been rewarding to me is based on the EMA 52,26,12 using the 4 hour chart. A crossover of the EMA 52 and 26 is a sign of a beginning of a trend. In this case you can see that the EMA 26 has crossed the EMA 52 representing a start of a bullish short to mid term trend upward.
You can observe that LTC has formed a parallel upward channel, usually on a channel like that the price bounces off the EMA 12 or EMA 26. Depending on the sharpness of the breakout, you will have to choose the 1 hour or 4 hour chart in order to assess which EMA to look at for an entry. In this case, LTC has repeatedly rallied after touching the EMA 12 on the 1 hour chart. My only concern on this trade is that Litecoin is showing a beginning of a bearish crossover on the 1 hour chart. But hey, trading is all about mixed signals...
In order to find an entry, you can switch the timeframe of the chart to 1 hour and then 15 min, that will help you determine a momentum for an entry point. Here if you take the 15 min chart you will see that MACD has negative histograms which is good since we want to enter at the lowest price possible. You have two choice with this set up:
1) Enter right now to prevent a sudden breakout
2) Wait and enter when MACD on the 15 min chart or 1 hour (depending on your risk appetite) has a bullish crossover.
Dotted blue lines: Past highs - direct resistance
Dotted yellow lines: Past historic resistance levels
Aggressive approach:
Long at market
Stop loss just under EMA 26 on the 1 hour chart - that would confirm the break of the upward channel.
Take profit under resistance level (dotted blue line). Which one is up to your risk appetite.
Conservative approach:
Long at EMA 12 on the 4 hour chart
MACD has bullish crossover on 1 hour or 15 min chart.
Stop loss just under EMA 26 on the 1 hour chart
Take profit under resistance level (dotted blue line). Which one is up to your risk appetite.
N.B: This strategy safely works for short term price movements. For example, my take profits are usually between 4 and 8%. Additionally, I use 2% of my portfolio per trade with a risk/reward ratio of 2.
**This is my set up and I am sharing that with you for educational purpose. This isn't, in any case, financial advice.**
Penafian
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