Stochastic Bitcoin Trading System

This guide should be called: Combining Together Stochastics with other Indicators, but Stochastic Bitcoin System sounds real nice.

Stochastic indicator can be combined with other indicators to form a trading system. For our illustration we'll combine it with:

RSI
MACD
Moving Averages Crypto Indicator

Example 1: Bitcoin Stochastic System

Combining Stochastics with Different Types of Indicators

Sell Bitcoin Trading Signal Generated using Stochastic System

From our btcusd system the sell signal is generated when:

Both MAs are moving down
RSI is below 50
Stochastic heading downward
MACD heading downward below centerline

The sell crypto signal was derived & generated when all these bitcoin rules were met. The exit trading signal is generated when a signal in the opposite market direction gets generated i.e. When the indicators reverse.

The good thing about using such a system is that we're using various types of bitcoin indicators to confirm the trade signals & avoid as many fake out whipsaw signals as possible in the process.

Stochastic - is a momentum oscillator bitcoin indicator
RSI- is a momentum oscillator bitcoin indicator
Moving Averages Indicator- is a bitcoin cryptocurrency trend following bitcoin indicator
MACD- is a bitcoin crypto trend following bitcoin indicator

It is very useful to combine more than one trading indicator, as a combination of bitcoin trading signals is much better than relying on one single indicator. The indicator combinations reinforce each other, & cancel out false whipsaw bitcoin signals.

A bitcoin trend following technical indicator helps a bitcoin trader to see the overall picture, while using more than 1 momentum indicator gives better and more reliable entry & points for exit trading bitcoin.

The indicators combinations and their bitcoin trading signals help to decipher a lot of the btcusd trading market activity.

Example 2: Bitcoin Stochastic System

Buy Trade Signal Generated using Bitcoin Stochastic System

For this example the bitcoin crypto trend is clearly upwards, but at some point there were a few bitcoin trading whipsaws generated by the stochastic oscillator indicator, can i spot them? So the question is how can one avoid trading these bitcoin cryptocurrency trading fake outs?

Well, the answer is that by checking-on the other indicators like MACD cryptocurrency indicator a btc usd trader could have avoided the whipsaw, even the MACD had not given a crossover signal although it was very close to zero centerline level, at the same time the gradient at which the moving averages indicators turned was not so sharp as to warrant a decisive crypto market trend reversal. Well the thing is that it’s not so obvious when it comes to recognizing market whipsaws: it is a skill that takes some time to master and learn but after a while you as a trader can spot whipsaws from a mile away.

One tip is that as long as MACD cryptocurrency indicator is above zero center line even if the MACD lines are heading downward then the bitcoin crypto trend is still upwards. As you can see from the above example MACD cryptocurrency indicator never went below zero line and afterwards the upwards btcusd crypto trend continued with MACD cryptocurrency indicator maintaining above Zeroline & continuing to move upwards.

During ranging markets Stochastic Oscillator Technical indicator will give the fastest bitcoin trading signals which are prone to whipsaws. This is why stochastic indicator is best combined with other indicators and the bitcoin trading signals traded are confirmed by another one or two other Bitcoin indicators.

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Stochastic Bitcoin Trading System