Posts

Showing posts from February, 2024

Candles moving downwards from a supply zone to 20 SMA, with 200 SMA within or near the supply zone

Image
In the below BTC/USD daily chart we can see a supply zone rally base drop ,  and when the candles approached the supply zone, there was an instant bounce downwards from the 200-period Simple Moving Average (SMA) - candles moved towards 20 SMA. Candlesticks moving downwards to 20 SMA from 200 SMA near a supply zone Candles can bounce downwards from the 200-period Simple Moving Average (within or near a supply zone) to the 20-period SMA, it's a bearish reversal pattern. Here's how you can approach this strategy: 1. Identify Supply Zone: Locate a supply zone on your price chart. This area represents a region where selling pressure is expected to be strong. 2. Plot 200-period SMA and 20-period SMA: Calculate and plot both the 200-period SMA and the 20-period SMA on your price chart. The 200 SMA acts as a long-term trend indicator, while the 20 SMA provides a shorter-term trend perspective. 3. Wait for Price to Enter Supply Zone: Monitor the price movement until it enters the ide

Candles bouncing upwards from a demand zone with 200 SMA inside the demand zone.

Image
In the below BTC/USD weekly chart we can see a demand zone  rally base rally , and when the candles approached the demand zone, there was an instant bounce upwards from the 200-period Simple Moving Average (SMA) - candles moved towards 20 SMA. Candle sticks bouncing upwards from 200 SMA to 20 SMA within a demand zone Candles can bounce upwards from the 200-period Simple Moving Average (SMA) to the 20-period SMA within a demand zone, its a pattern indicating a potential bullish reversal. Here's how you can approach this strategy: 1. Identify Demand Zone: Locate a demand zone on your price chart. This area represents a region where buying interest is expected to be strong. 2. Plot 200-period SMA and 20-period SMA: Calculate and plot both the 200-period SMA and the 20-period SMA on your price chart. The 200 SMA acts as a long-term trend indicator, while the 20 SMA provides a shorter-term trend perspective. 3. Wait for Price to Enter Demand Zone: Monitor the price movement until it

20 SMA attracting candles from demand zone

Image
In the below BTC/USD weekly chart we can see a demand zone  rally base rally , and when the candles approached the demand zone, there was an instant pullback towards  20-period Simple Moving Average (SMA)  - candles moved upwards  to 20 SMA. 20 SMA pullback from demand zone The strategy of using a 20-period Simple Moving Average (SMA) to attract candles from a demand zone is a trend-following approach that seeks to identify potential buying opportunities. Here's how you can implement this strategy: 1. Identify Demand Zone: A demand zone is a price level where buying interest is expected to be significant, often characterized by a cluster of previous lows or a consolidation area. Traders typically look for areas where price previously found support. 2. Plot 20-period SMA: Calculate and plot the 20-period Simple Moving Average on your price chart. The SMA smooths out price data over the last 20 periods, providing a trend indication. 3. Wait for Price to Enter Demand Zone: Monitor t