Perfect entry strategy using stochastic oscillator + 200 simple Moving average - crypto academy /s5w3 - homework post for @lenonmc21

in SteemitCryptoAcademy3 years ago

IMG-20211204-WA0034.jpg

Good morning crypto academy community.
It is my pleasure to be back to this community after a long break, and to my greatest joy I have to partake in this class by one of my lovely professors @lenonmc21 on perfect entries.
To that effect I will be performing the given task below.

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INTRODUCTION

The class on perfect entry strategy is a wide one in the sense that it encompasses entry using stochastic oscillator, and 200 simple average and how it can be applied to our day to day trading. Seeing the topic, it was obvious that it will be a very interesting.
Without wasting much time let me go forward to performing the task.

Home work

1 In your own words, what do you understand about the perfect entry strategy (put at least 2 examples on crypto assets)?
2 Explain in your own words what candlestick pattern we should expect to execute a market entry using the perfect entry strategy.
3 Explain the trading entry and exit criteria for buy and sell positions in any cryptocurrency of your choice (Share your own screenshots).
Practical ( remember to use your own images and put your username). Trade two demo account trades using the perfect entry strategy for both a bullish and a bearish scenarios. Please use a shorter period of time to execute your entries. Important you must run your entry in a demo account to be properly evaluated.

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QUESTION 1

In your own words, what do you understand about the perfect entry strategy (put at least 2 examples on crypto assets)?

For an entry is said to be perfect if these three things happens simultaneously. Viz;

Firstly, the market trend should definitely be ascertained.
It is expedient to understand the trend in order to make a good decision as pertaining your entry into a given pair.
For a trader to make a perfect entry, in addition to the use of indicators, his analysis of price action should be topnotch.
Indicators like 200 moving average has been very helpful when it comes to an uptrend, where the market price is seen above the the line, and if peradventure the price goes below the line, then the market should be said to be in a downtrend.

Screenshot_20211204-054910.png
UTK/BUSD source

From the above image, it is obvious that the market is in an uptrend with the 200 moving average supporting it.

But with this an entry is not seen as being perfect.
The second factor to look out for before labelling an entry a perfect entry is the information you decode from the " Japanese candlestick" which shows the price action at that moment. I the above chart, it is very important in addition to the presence of a "trigger candle", to enter a market as soon as the price is seen above the moving average. Although we need one last factor to confirm an entry to be perfect.

Lastly, the Stochastic Oscillator. In addition to the above two factors, the stochastic oscillator helps us to confirm an entry.
From my understanding, when an oscillator is seen on at the peak of its scale, it indicates an overbought, on the other hand, if seen in the trough, it indicates oversold.
In an overbought condition, there is higher tendencies that price will suffer set back but on the contrary, the market recovers.

In the image below the behaviour of the stochastic oscillator is displayed, for better visualisation, I'll be using the red lines to show the stochastic oscillator zones with over 80 and below 20, where we should be focus on for possible price reversal.

Screenshot_20211204-125630.png

Fio/busd 4/12/2021 source

In the above chart, the three conditions were met and the "stochastic oscillator" is found close to the highest zone between 80 and 100 .
In conclusion, the conditions required have been met and the best entry in the above market is a sell order.

With the following occurrence, i can device my entry points for both buy order and sell order with 1 and 3 being the buy zone and 2 and 4 being the sell zone.

Screenshot_20211204-132656.png
Fio/usdt 1 hour chat 4/12/2021 source

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QUESTION 2

Explain in your own words what candlestick pattern we should expect to execute a market entry using the perfect entry strategy

From the above question and the prof.'s teaching, the japanese candlestick is seen to tally with the above given indicators when they are as close to the 200 moving average as possible, for ming a "Trigger candle".
A trigger candle is usually a candle that have a small body and an absorption wick, a trigger candle basically shows a price reversal

images (1) (2).jpeg

images (2).jpeg
Trigger candles showing a reversal point in a market.

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QUESTION 3

Explain the trading entry and exit criteria for buy and sell positions in any cryptocurrency of your choice (Share your own screenshots).

I always tell my friends that money is in the market but it is not every money in the market is yours. Meaning that there are fake outs in the market and if you don't take time you'll loose while trying to make money.

Since my massive trading loss, I promise myself that i will not enter a trade that does not obey at least two indicators. And from the teaching, prof. made us to understand that for an effective use of this strategy, the conditions listed in no 1 above must be reached. And in a situation whereby the conditions are not met, we should wait for better opportunities in order to curb losses.

In addition, ranging market is a no no, in the sense that you're not meant to trade a ranging market because at that point, the market is unpredictable and can either go up or down.

The last but not the least is the use of stop loss.
The usefulness of stop loss cannot be overemphasized.
Stop losses are meant to be placed below the trigger candle while take profits are meant to be placed high above your entry point. Ideally for maximum profit in an uptrend, you should take profit when the stochastic oscillator value is above 80.

SELL ORDER.png
Algo/usdt 4/12/2021 source

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QUESTION 4

Trade two demo account trades using the perfect entry strategy for both a bullish and a bearish scenarios. Please use a shorter period of time to execute your entries. Important you must run your entry in a demo account to be properly evaluated.

Because of the state of the market today, it is hard to find a pair that shows a perfect entry at the moment. For instance, fio/usdt pair had a nice entry yesterday around 0.2117 with its target at 0.437 which gives you more than x2 of your entry.

EZEGE IDID.png
FIO/USDT 4/12/2021 source
The above image shows the best entries to buy and sell orders with respect to the three afore listed conditions.

Steem on its own, shows
A good support with respect to the above listed indicators, and from implication, the best place to buy is 0.00001001 and sell at 0.00001318

Screenshot_20211204-172924.png
Steem/btc 4/12/2021 source

For me, I'll be placing a buy order at 0.00001001

Screenshot_20211204-172949.png
Placing a buy order source

And sell at 0.00001318 with respect to the resistance zone

Screenshot_20211204-173017.png
A sell order source

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CONCLUSION

It was a long time studying and applying this teaching. Prof. @lenonmc21 i must say you effort is highly appreciated.
I think i still have to go through this teaching over again to internalize it and use it in my daily trading.

CC
@lenonmc21
@sapwood

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