50 Period Moving Average Strategy
A trader can choose a moving average to trade with based on the btcusd chart time frame that they use for trading; a trader might choose the moving average to trade 1 minute bitcoin chart, 1 hour bitcoin chart, 4 hour bitcoin chart, day bitcoin chart or even weekly bitcoin chart.
A trader can also choose to average the closing bitcoin trading price, opening bitcoin trading price or median bitcoin trading price - when choosing a bitcoin moving average indicator.
Moving average bitcoin indicator is commonly used to measure strength of bitcoin trends. Data of the moving average is precise and its output as a line can be customized to the preferences of a bitcoin trader.
Using the moving average bitcoin indicator is one of the basic bitcoin strategies to generate buy & sell bitcoin trade signals which are used to trade in direction of the bitcoin trend, since the moving average indicator is a lagging indicator & a bitcoin trend following indicator. The Moving average btcusd indicator as a lagging bitcoin indicator means that moving average will tend to give late bitcoin signals as opposed to leading bitcoin indicators. However, the Moving average indicator as a lagging bitcoin indicator gives more accurate cryptocurrency signals and is less prone to bitcoin whipsaws compared to bitcoin leading indicators.
Traders choose the moving average period to use when trading with this moving average bitcoin indicator depending on the type of bitcoin method they use: short term, medium term & long term.
- Short term bitcoin trading: 20 Period Moving Average Strategy
- Medium term bitcoin trading: 50 Period Moving Average Strategy
- Long term bitcoin trading: 100 Period Moving Average Strategy
The period of the bitcoin moving average in can be measured in 1 minute bitcoin chart, 1 hour bitcoin chart, 4 hour bitcoin chart, day bitcoin chart or even weekly bitcoin chart. For our bitcoin trading strategy example we will use 1 hour bitcoin chart period.
Short term moving averages are sensitive to bitcoin trading price action and can identify bitcoin trend signals faster than the long term moving averages. Shorter term moving averages are also more prone to bitcoin whipsaws compared to long term moving averages.
Long term moving averages help to avoid bitcoin whipsaws, but are slower in identifying new bitcoin trends and bitcoin reversals.
Because long term moving averages calculate the average using more bitcoin trading price data points, the long term moving average does not reverse as fast as a short term moving average and it is slow to catch the changes or reversals in the cryptocurrency trend. However the longer term bitcoin moving average is better when the bitcoin trend stays in force for a longer time.
The task of a trader is to find a moving average period which will spot bitcoin trends as early as possible while at the same time avoiding fake out signals - bitcoin whipsaws. As a trader you will need to first test different bitcoin moving average periods before deciding which bitcoin moving average period is best suited for your method based on the results of the testing that you will do using different moving averages.
Moving Average Period Strategy
Moving average bitcoin indicator is a trend following bitcoin indicator that is used by bitcoin traders for three things:
- Identifying the beginning of a new bitcoin trend
- Measure the sustainability of the new bitcoin trend
- Identify the end of a bitcoin trend and signal a bitcoin trend reversal
The moving average bitcoin indicator is used to smooth out the volatility of bitcoin trading price action. The moving average indicator is an overlay indicator & it is superimposed on the bitcoin trading price chart.
On the moving average bitcoin example illustrated below - the blue line represents a 20 period moving average, which acts to smooth out the volatility of the bitcoin trading price action.
50 Period Moving Average Strategy - 100 Period Moving Average Strategy - Moving Average Period Strategy
Calculation of the Moving Average Bitcoin Price Period
The moving average is calculated as an average of bitcoin trading price using the most recent bitcoin trading price data point - bitcoin periods.
If a moving average uses the 20 period to calculate the moving average then it is referred to as a 20 period moving average, because most traders use the day bitcoin chart as the standard bitcoin trading price period we shall just refer to the moving average as the 20 day moving average.
To calculate the 20 day moving average the bitcoin trading price of the last 20 days is averaged - and the average is then updated constantly after every new bitcoin trading price period closes. So after every new bitcoin trading price period close is formed the average is then re-calculated afresh using the most recent 20 bitcoin trading price periods, that is why this bitcoin indicator is called a moving average because the average is constantly moving when bitcoin trading price data is updated and re-calculated.
