Every month, we analyze potential trading strategies based on the data of the CryptoKnowledge platform. Today, we will dive into a MACD-based strategy that achieved a whopping 87% win rate in September. Let’s get started right ahead.
87% MACD Strategy Explained
Before we have a closer look at the results, I want to dive deep into the strategy itself to give you an in-depth understanding of the approach. While many traders love to ride the highs, chasing after bullish signals, the strategy took a slightly different tack: The focus was primarily on short trades. In the world of crypto trading, going ‘short’ means betting on the token’s price to drop.
For my trades, I didn’t just stick to the usual suspects. Instead, I diversified my investments, casting my net across an eclectic mix of tokens, namely GRT, AAVE, ALGO, EGLD, STX, EOS, XTZ, THEATA, MANA, RUNE, NEO, SNX, KLAY, IOTA, ZEC, COMP, and DASH. This diversified approach allowed me to spread risk across different crypto assets, enhancing the overall robustness of my strategy.
The strategy is mainly based on two indicators:
- Moving Average Convergence Divergence (MACD)
- PulseCheck (we use the PulseCheck 50)
Central to the trading approach is the MACD (Moving Average Convergence Divergence) analyzed on the daily chart. For those unfamiliar, the MACD is an indicator that evaluates the relationship between two moving averages of a token’s price. When the MACD line crosses below its signal line, it can indicate that the token may be due for a downturn, suggesting a potential selling opportunity.
Yet, the MACD, as powerful as it is, wasn’t the sole player in this strategy.
An essential component was the PulseCheck indicator, a proprietary tool from the CryptoKnowledge platform. Now, PulseCheck50 isn’t your average indicator. It consolidates data from 17 different technical indicators, providing a comprehensive overview of market conditions.
The “50” in PulseCheck50 refers to a specific threshold: The strategy only initiates a trade when at least half (50%) of these indicators suggest a selling opportunity. This means the strategy wasn’t just relying on the MACD’s bearish signals but waiting for a consensus among various indicators, ensuring that multiple layers of technical analysis backed my trades.
Take Profit / Stop Loss
The strategy had a clear exit strategy: Trades were closed once a token hit a predetermined support level (provided by the CryptoKnowledge platform). When the market moved against my predictions, I had a safety net, closing the trade when the token touched a set resistance level. This approach ensured that losses were minimized even if a trade didn’t go as planned.
September was a month of rigorous trading and fine-tuning. With 13 trades executed, each trade spanned an average duration of 2.7 days.
The outcome? A staggering 87% success rate resulting in almost 75% gains! And even when the tides turned, the maximum drawback was capped at a mere 12%. Considering the volatile nature of the crypto market, these results underline the efficacy and reliability of the strategy.
Now, let’s take a brief detour to talk about the instrumental role of the CryptoKnowledge platform. It’s a tool and a powerhouse amalgamating various indicators, including the invaluable PulseCheck.
The platform provides a comprehensive analysis, ensuring that traders are armed with the most accurate data to make informed decisions. It’s like having a dedicated team of analysts working round the clock, ensuring you have the best insights at your fingertips.
Trading, especially in the unpredictable world of cryptocurrency, demands precision, timely decisions, and a pinch of intuition. The past month’s achievements reiterate the importance of using a well-thought-out strategy fortified by robust tools like CryptoKnowledge’s PulseCheck. Whether you’re a seasoned trader or just getting started, this combo might be the game-changer you’ve been searching for!