Using Momentum & Trend Indicators To Trade ETH
Cryptohopper Newsletter
Ethereum just like the entire crypto market has been very bullish over the past week, gaining over 35%. When the Crypto Market is bullish and has a clear direction, trend following indicators and momentum indicators become very useful and can offer very profitable trades.
We will now jump into how you can trade ETH and the Crypto Market under these conditions!
Trend following + Momentum
As we have mentioned in our previous weekly analysis, the Parabolic SAR is a trend following indicator that is very effective when the market has a clear direction, as it is the case right now. In order to validate the Parabolic SAR, we can use the MACD which is a momentum oscillator to verify that the momentum is in our favor as well. When both momentum and trend indicators are signaling a buy, there is a good chance that it will be an advantageous moment to enter the market.
The entry point plays an important part and is crucial for a successful trading system. However, it only tells half the story; the other half is the exit point, which we will analyze now!
Technical Analysis Trailing Stop Loss
The Parabolic SAR can not only act as an excellent entry point for a trade but it can also act as an excellent exit point. This indicator is able to react quickly to changes in trend, as such it will usually also be fast enough to close your trades at the right moment. The Paracolic SAR can thus be an excellent trailing stop loss that follows the trend until its reversal, therefore keeping you in the trade for a long time and maximizing your returns.
Ethereum just like the entire crypto market has been very bullish over the past week, gaining over 35%. When the Crypto Market is bullish and has a clear direction, trend following indicators and momentum indicators become very useful and can offer very profitable trades.
We will now jump into how you can trade ETH and the Crypto Market under these conditions!
Trend following + Momentum
As we have mentioned in our previous weekly analysis, the Parabolic SAR is a trend following indicator that is very effective when the market has a clear direction, as it is the case right now. In order to validate the Parabolic SAR, we can use the MACD which is a momentum oscillator to verify that the momentum is in our favor as well. When both momentum and trend indicators are signaling a buy, there is a good chance that it will be an advantageous moment to enter the market.
The entry point plays an important part and is crucial for a successful trading system. However, it only tells half the story; the other half is the exit point, which we will analyze now!
Technical Analysis Trailing Stop Loss
The Parabolic SAR can not only act as an excellent entry point for a trade but it can also act as an excellent exit point. This indicator is able to react quickly to changes in trend, as such it will usually also be fast enough to close your trades at the right moment. The Paracolic SAR can thus be an excellent trailing stop loss that follows the trend until its reversal, therefore keeping you in the trade for a long time and maximizing your returns.
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