Greetings Professor @yohan2on. I admit that this week's assignment was difficult for me, it required a lot of research, reading and studying. However I am happy for the new knowledge learned.

So let's started.

_{Image edited by me in Powerpoint}

LET'S KNOW THE FINGERTRAP

It is a Scalp trading strategy that allows us to identify certain signals and patterns that will guide us to make quick and correct decisions during the operation.

First of all, two EMA indicators are configured on our candlestick chart. The EMA 8 (some traders use 13) will be the fast pattern and the EMA 34 will be the slow pattern. The EMA 8 line will closely follow the price of the asset and the EMA 34 will be used to find the trading signal.

In essence, the two EMA lines will indicate the behavior of the chart, so when the two lines cross a trend change is expected. If, on the other hand, the two lines move away from each other, it indicates a continuation of the existing pattern (bullish or bearish).

This trend reversal signal will be the key to indicate when it is the right time to place a position in our scalping operation. However, the two EMA lines are not enough, as they can sometimes give us false signals, so it is necessary to accompany our strategy using the Volume indicator, ideally with an MA line of 10.

Volume and Fingertrap work together as follows:

When the two EMA lines cross you should check at that moment if the Volume value is above its MA line, if so this corroborates the trend change, so you should put your position. If on the contrary, if the volume value is below its MA line, this means a false signal. False signals occur a lot in markets with sideways movement.

_{True and False signal example. Image edited by me and taken from Tradingview.^Source}

This Scalp strategy is more optimal in markets with a marked trend. Therefore, it is recommended before trading to review the market in a high timeframe, between 1 hour and 15 minutes, for example, to have a better perspective of the price movement.

This high time frame will help us to identify price volatility, support, and resistance.

Finally, the operation is performed at a timeframe between 1 and 5 minutes.

Preparation:

The first thing we must do is to select a pair that has a marked trend (bullish or bearish). Sideways trends can also be traded but it is riskier.

We can verify this on the Coinmarket cap website ^Source, and order the currencies that have had marked trends in the last 24 hours in terms of their profit. Another important point when selecting a pair is to check its volume because if it is too low, the broker will not be able to place positions due to lack of liquidity.

_{Image taken from Coinmarketcap.^Source}

So we must not only find a cryptocurrency that is in trend but also has an adequate volume, at least 1000.

Then we proceed to our operation.

Demonstration 1. SOL/USD pair.

For both cases, I will use the demo version of Tradingview, which has its own broker called Paper Trading that connects to your tradingview account. This process will give you a demo account of 100,000USD. In my case, this amount was reduced several times while I was learning how to use the platform.

_{Image edited by me and taken from Tradingview.^Source}

Additionally, you must activate the order panel where it is indicated with the arrow in the figure below, to start place the orders.

_{Image edited by me and taken from Tradingview.^Source}

We start operating according to the Fingertrap principles explained at the beginning. All images were edited by me and taken from Tradingview.com^Source.

_{1- Review the SOL/USD chart 15-minute time frame to observe its trend, which indicates the beginning of an uptrend. Start time 12:29 am, however, the pair was chosen a few hours earlier.}

_{2- After 38 minutes of waiting, Once the EMA crossing occurs, we verify that the Volume value is above the MA to avoid a false signal. As both cases occur, we proceed to place the position with a Lot size of 1. In this case, since it is an uptrend, the yellow line EMA 8 moves above the purple line EMA 34... this means that we should place a Buy order.}

_{3-There are two options for closing the position: The first is to wait for the EMA lines to come together again, this gives the signal to close. Or as in my case, close when the expected Profit is reached. I closed the trade after 22 minutes.}

_{4-To close the position the system will ask for confirmation.}

_{5- Finally, we can observe the closing of the operation in the account history.}

Demonstration 2. LINK/USD pair.

Contrary to the first case, we are presented with a downward trend for this second demonstration, which presents another way to use and understand Fingertrap.

_{1- Review the LINK/USD chart 15-minute time frame to observe its trend, which indicates the beginning of a downtrend.}

_{2- Once the EMA crossing occurs, we verify that the Volume value is above the MA to avoid a false signal. As both cases occur, we proceed to place the position with a Lot size of 10. In this case, since it is a downtrend, the purple line EMA 34 moves above the yellow line EMA 8... this means that we should place a Sell order.}

_{3-In this case again I closed when the expected Profit is reached. I closed the trade after 2 minutes.}

_{4- Finally, we can observe the operation in the account history.}

_{5- We also can see its profit.}

CONCLUSION

This learning process has been long and exhausting. It is impossible to be able to perfectly handle a strategy like Fingertrap in less than a week. This makes me understand that it is definitely not a strategy that should be used by novices, but by experts.

Fingertrap is not only about understanding the use of EMAs and volume, it is also about employing good risk management.

For example, one of the difficulties I encountered while performing the two exercises was placing the correct stop loss. In theory, several authors recommend using a stop loss between 5 to 10 PIPS. However, due to my inexperience, it was impossible for me to place a good stop loss, since every time I did it, the operation was closed almost immediately.

This forced me to make trades without stop loss (it is NOT advisable to do so in a real account). At the same time, this forced me to stay at the computer while trading, which resulted in an exhausting exercise.

On the other hand, it is even more exhausting to wait for the EMA lines to cross and show the indicated signal, which in turn coincides with the Volume signal. It took me about 4 days to complete this assignment between researching and performing the two demonstrations. Imagine repeating that process several times a day.

So as I said, Fingertrap scalping trading is not for novices.