Bitcoin Investing Strategy For Traders

There are only about 21 million Bitcoins available worldwide, and as we proceed along, they’ll become harder and harder to mine.

That leaves us open to the option of trading Bitcoins as an investment vehicle via trading platforms such as Metatrader 4.

Our Bitcoin Investing strategy is optimized to help you get started with profitable Bitcoin trading and longer-term investing.

You can apply the same buy/sell trading rules to other digital coins (Ethereum, Litecoin,..) as well.

Trade Setup 

MT4 Indicators: ama-optimized-indicator.ex4 (Inputs Variable Modified; periodAMA=24), Moving Average.ex4 (Parameters Modified; Period=30, Style=Magenta), MACD_Colored_Histogram.ex4 (Default Setting)

Suitable for: Day trading, swing trading, investing

Trading Time: 24/7, Around the Clock

Cryptocurrency: Any (Bitcoin and Altcoins)

Timeframes: Any

Download

Download the Bitcoin Investing Strategy

Buy Trade Example: BTC/USD (Bitcoin / US Dollar), D1 Chart

Fig. 1.0

Strategy Rules

Buy Signal

Open a buy trade if the following trading conditions appear on the crypto chart:

  • If the magenta 30 SMA indicator line crosses below the blue dotted line of the ama-optimized-indicator as illustrated on Fig. 1.0, the Bitcoin price is said to be pushed to the upside i.e. a trigger to buy forthwith.
  • If the lime & slate gray histograms of the MACD_Colored_Histogram indicator aligns above the 0.00 horizontal level as indicated on Fig. 1.0, the overall bitcoin market sentiment is said to be bullish, thus a trigger to buy the designated cryptocurrency.

Suggested Stop Loss for Buy Trade: Place stop loss below daily support.

Suggested Exit Strategy/Take Profit for Buy Trade

Exit the buy trade if the following trading conditions appear on the chart:

  • If while a bullish trend is running, the magenta 30 SMA Metatrader 4 indicator line intersects the mostly red dotted line of the ama-optimized-indicator as seen on Fig. 1.0, it is pointing to weaning buying pressures, as such an exit or take profit will suffice.
  • If the MACD_Colored_Histogram indicator displays a red histogram that is positioned below the 0.00 horizontal level, it is a trigger to exit or take profit at once.

Sell Signal

Open a sell trade if the following trading conditions appear on the crypto chart:

  • If the magenta 30 SMA indicator line crosses above the red dotted line of the ama-optimized-indicator as shown on Fig. 1.1, the Bitcoin price is said to be dragged lower, therefore a sell alert will suffice.
  • If the red & slate gray histograms of the MACD_Colored_Histogram indicator align below the 0.00 horizontal level as exemplified on Fig. 1.1, the general bitcoin market sentiment is said to be bearish, thus a trigger to go short on the cryptocurrency of focus.

Suggested Stop Loss for Sell Trade: Place stop loss above daily resistance.

Suggested Exit Strategy/Take Profit for Sell Trade

Exit the sell trade if the following trading conditions appear on the chart:

  • If during a bearish trend, the magenta 30 SMA indicator line intersects the largely blue dotted line of the ama-optimized-indicator, a bullish reversal is said to be looming within the crypto chart, hence an exit or take profit is advised.
  • If the MACD_Colored_Histogram MT4 indicator displays a lime histogram above the 0.00 level as shown on Fig. 1.1, it is a signal to exit or take profit immediately.

Sell Trade Example: BTC/USD (Bitcoin / US Dollar), D1 Chart

Fig. 1.1

Free Download

Download the Bitcoin Investing Strategy

About The Cryptocurrency Technical Indicators Used

The ama-optimized-indicator is a trend-following custom MT4 indicator that is built on the moving average.

Its blue or red dotted gray line represents a bullish or bearish trend respectively.

The 30 SMA (Simple Moving Average) is a popular technical analysis indicator that smooths out price data by constantly creating an updated average price over 30 periods.

The MACD_Colored_Histogram indicator is a Moving Average Convergence/Divergence (MACD) variant, with zero delay plus coloring.

Easy Installation

Start using this cryptocurrency strategy in just 5 minutes. Click here to get started now.

Share Now!