[CRYPTO TRADING STRATEGY WITH MEDIAN INDICATOR] || Crypto Academy S6W4 || Homework Post For Professor @abdu.navi03 || BY @msalmanjaved
Hello Everyone!
Greetings to All
I Hope everyone is doing well!
Today i am going to complete the Home Work Task of Season 6 Week 4, and task is Related to "CRYPTO TRADING STRATEGY WITH MEDIAN INDICATOR" given by the Professor @abdu.navi03 .
Question# 1
Explain your understanding with the Median Indicator?
There are many indicators that serve different purposes. The median indicator is the trend-based indicator it is in fact used to predict the direction of the market and catch trading signals. It helps the traders to locate trend, take trading signals and understand the extent of volatility of the market.
It presents two bands the upper band which represents high value of the median line and the lower band which represents the lower value of the median line. it also consists of an EMA line around which the price moves. It also consists of the clouds whose color represent the trends too. The green color by default represents the bullish trend and the purple cloud represents the bearish trend.
What sets median indicator apart from others is that it identifies trend as well as volatility. Its calculation involves both the ATR and the EMA. The distance of the upper and lower band from the price action indicates volatility. The higher the distance the higher the volatility and vice versa.
Below is the median indicator added to a BNB/USDT CHART.
Question# 2
Parameters and Calculations of Median indicator. (Screenshot required)?
Following are the important parameters of the median indicator.
Median length: by default, 3
ATR length: by default, 14
ATR multiplier: by default, 2
The Median Indictor is Calculated using the following Calculations
Upper band = Median length + (2ATR)
Lower band = Median length - (2ATR)
Whereas:
Median value = highest price + lowest price / 2
Moreover:
EMA Value = Closing price x multiplier + EMA (previous day) x (1-multiplier)
Question# 3
Uptrend from Median Indicator (screenshot required)?
To locate an uptrend, look for the following indications.
The median indicator cloud is green when the trend is bullish. In addition to the position of the price action in an uptrend is above the EMA indicating that the buyers are pushing the market higher and higher. In this situation the median value is higher than the EMA value.
A typical Uptrend using the median indicator is shown below in the BNB/USDT chart.
Question# 4
Downtrend from Median Indicator (screenshot required)?
To locate a Downtrend, look for the following indications.
The median indicator cloud is purple when the trend is bearish. In addition to the position of the price action in a downtrend is above the EMA indicating that the sellers are pushing the market lower and lower. In this situation the median value is lower than the EMA value.
A typical Downtrend using the median indicator is shown below in the BNB/USDT chart.
Question# 5
Identifying fake Signals with Median indicator (screenshot required)?
Median indicator can be used along with other indicators to identify and avoid taking the wrong false signals. As it is a trend-based indicator it can be paired with a momentum indicator to understand wider aspects of the market. One such indicator is the RSI.
The RSI is a very popular indicator that is commonly tagged along with trend-based indicators to understand over bought and oversold conditions. The two important extremes in RSI are the 30 level and the 70 level. When the RSI crosses below the 30 line it indicates that the market is in the oversold sentiment and a bullish reversal can be anticipated any time soon.
Opposite to this when the RSI is trading above the 70 line it indicates that the market is entering the overbought sentiment and thus bearish reversal can be anticipated anytime soon. Another important aspect of RSI is the 50 lines when in bullish trend the RSI is trading above 50 it indicates a strong bullish trend and the opposite is true for bearish trend.
When the median indicator and the RSI support the trend the it is considered to be a strong trend on the other when the RSI and median line contradict each other’s signal then it is more likely to be a false signal as indicated in the BNB/USDT chart below:
Question# 6
Open two demo trades, long and short, with the help of a Median Indicator or combination that includes a Median Indicator (screenshot required)?
Buy Signal
☑ Price was trading below the EMA
☑ The cloud was purple
☑ As soon as the cloud turned green, I waited for the price action to cross the EMA as soon as it crossed thee EMA I placed the buy order. Though it was too early and I should have waited for confirmatory bullish candles.
I did place the order in the wake of getting an early entry.
☑ I still placed the stop loss and take profit orders accurately to protect from larger damage
Sell Signal
☑ Price was trading above the EMA.
☑ The cloud was green.
☑ As soon as the cloud turned purple, I waited for the price action to cross the EMA.
☑ As soon as the price crossed the EMA, I waited for the formation of two bearish candles and executed the sell trade.
☑ I placed the stop loss around the upper band and take profit around the lower band.
Conclusion
Median indicator can be a very reliable trend indicator especially when used along with other support indicators especially the RSI. When used alone the median indicator color codes can be very beneficial in taking the buying and selling orders and to assess the market volatility.
I hope I would get some good remarks from professor on my effort.
Note : All screenshots are taken from tradingview.com all the Images that i have used have been citied and source have given with every image.
Cc :
Professor:
@abdu.navi03
#club5050 Eligible
