Cryptocurrency Stop Loss Strategy

The cryptocurrency stop loss strategy is an effective trading system designed to get out of the crypto market when severe markets dips make return to profitability not likely.

So many cryptocurrency traders find it quite hard to admit making wrong decisions, but in order to stem losses emanating from such decisions, you must ensure you swallow your pride.

Furthermore, we have neatly designed this strategy with a view of eliminating emotions that can impact cryptocurrency market trading decisions.

If the cryptocurrency market eventually moves against you, the set of indicators that we have in use, will protects you from obliterating those gains.

Trade Setup 

MT4 Indicators: trailing-stop-loss-level.ex4 (Default Setting), Commodity Channel Index.ex4 (Parameters Modified; Period=28)

Suitable for: Scalping, day trading, swing trading, investing

Trading Time: 24/7, Around the Clock

Cryptocurrency: Any (Bitcoin and Altcoins)

Timeframes: Any

Download

Download the Cryptocurrency Stop Loss Strategy

Buy Trade Example: DASH/USD (DASH / US Dollar), H4 Chart

Fig. 1.0

Strategy Rules

Buy Signal

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

  • If price closes above the deep pink resistance level (labelled “A” ) of the trailing-stop-loss-level indicator (see Fig. 1.0), the overall Dash crypto market sentiment is said to be bullish i.e. a trigger to buy the designated cryptocurrency.
  • If the light sea green line of the Commodity Channel Index Metatrader 4 currency indicator breaks & hovers above the 0.00 horizontal level as illustrated on Fig. 1.0, Dash price is said to be pressured higher i.e. a trigger to go long is advised.

Suggested Stop Loss for Buy Trade: Place stop loss below previous swing low support.

Suggested Exit Strategy/Take Profit for Buy Trade

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

  • If crypto price closes below the deep pink support level labelled “B” of the trailing-stop-loss-level indicator (refer to Fig. 1.0), bullish cryptocurrency market sentiment  is said to be halting, therefore an exit or take profit will suffice.
  • If the light sea green line of the Commodity Channel Index indicator dips below the 0.00 horizontal reference level while a bullish trend is running, bulls power is said to be weaning i.e. 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 price closes below the deep pink support level ((labelled “A”) of the trailing-stop-loss-level custom indicator (checkout Fig. 1.1), the general Dash crypto market sentiment is said to be bearish i.e. a trigger to sell the cryptocurrency of interest.
  • If the light sea green line of the Commodity Channel Index currency indicator breaks & hovers below the 0.00 horizontal level as exemplified on Fig. 1.1, Dash price is said to be dragged lower i.e. a trigger to go short is recommended.

Suggested Stop Loss for Sell Trade: Place stop loss above previous swing high resistance.

Suggested Exit Strategy/Take Profit for Sell Trade

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

  • If price closes below the deep pink resistance level labelled “B” of the trailing-stop-loss-level indicator (refer to Fig. 1.1), bearish cryptocurrency market sentiment is said to be weaning, therefore an exit or take profit will do.
  • If the light sea green line of the Commodity Channel Index indicator surges above the 0.00 horizontal reference line while a bearish trend is ongoing, bears’ power is said to be diminishing i.e. a trigger to exit or take profit forthwith.

Sell Trade Example: DASH/USD (DASH / US Dollar), H4 Chart

Fig. 1.1

Free Download

Download the Cryptocurrency Stop Loss Strategy

About The Cryptocurrency Technical Indicators Used

The trailing-stop-loss-level is a custom indicator that trails the cryptocurrency price stop automatically as price continues to advance in the desired direction.

The Commodity Channel Index is a momentum based indicator that falls within the oscillator family.

Regardless of its name, the CCI is not exclusively designed for the commodity market, but can also be applied to any crypto chart to gauge overbought/oversold conditions, along with spotting trends.

Easy Installation

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

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