99.999% of day Traders, think that when the moving averages crossover,
that means that the price is just going to go in that direction
forever.
But I'm here to tell you that it's wrong moving average crossover.
Tsar literally one of the worst ways to actually set your entry price
for your trade.
So in this video I'm going to clarify moving average crossover, how
they should be looked at and how you can actually get into a trade
before that moving average crossover.
Actually happens.
Welcome back to the channel, everybody.
My name is already and this is the moving average where we discuss
everything day, trading to keep you profitable on a consistent basis.
First order of business, I hope you guys had an amazing Fourth of July
weekend.
Second, let's get into the topic of this video.
Now, I want you to tell me in the comments section right now, how many
times you've actually entered a moving average crossover and had your
stop law.
Immediately after it's like the market knew, when you entered that
trade and you were thinking, it's going to go down and it literally
just went straight up.
Exactly from where you bought it into your stop-loss.
God, I can't wait to read these comments going to be amazing.
Now, why does this happen why?
Every time you get into a moving average crossover to the price, go
back up to hit everybody stop loss and then eventually continue on the
way that you originally thought.
So, in order for Save the 200 and the 50 moving average to eventually
cross over, that means that the price had already moved a ton before
that cross even happened.
So, by the time that you got in on your trade, the move was already
over and starting to retrace, but you didn't come here for my hand
signals.
Let's jump into the charts.
On my show.
You exactly what I'm talking about.
All right, so in order to show a very good representation of this and
to alleviate the question, does this work on crypto?
Yes, we're going to do it on bitcoin u.s.
dollar.
21, smooth moving average and the 200 smooth.
Moving average up on this chart, signified in white and red.
I like Smooth, moving averages because I find that the price respect
those the most and I'm comfortable with them.
All right, so let's put up some vertical lines on these moving average
crossover and see exactly what happened at these points.
All right?
So this is Bitcoin u.s.
Dollar on the one hour chart.
We've had what five moving average crossover is between the 21 in the
50 and pretty much every single time that the crossover happened if
you waited.
Like until you actually got a nice gap between them right here, you
got a period of consolidation, no real movement up or down and
probably hitting your stop-loss cuz it was too tight again right here.
Waiting for you to cross over a little bit, we had another period of
consolidation and then this one right here crossed over, and it
immediately started to come down.
Then once this moving average crossover happened, you
Get a period of consolidation.
Again, this is why the moving average.
Crossover strategy is literally one of the worst ways to trade.
If you do get in profit, it's going to be very, very small and then
usually consolidate until you eventually closed it in a negative
amount.
That's why moving average crossover is don't work.
Have a nice day, will see you in the next video.
I'm kidding.
I have a solution for you.
Now, before this moving average crossover happened, we had this
massive spike, it happens every single time before the moving averages
crossover, and I want to show you guys how to be a part of this move
right here.
So what I've done is removed those 21 and 200 moving averages, but
I've left the areas where they crossed over to the, you guys can see
how you can get a better entry and where that entry is actually going
to be in relation to where it crossed over before.
So I'm planning on my videos, I like to take requests from people in
the Discord group people in the YouTube comments.
And one of the request that I got was to cover the
Harold guppy strategy, number to cover this really really quickly but
it's DG MMA indicator and the Darrell guppy indicator / strategy,
works like this.
These 6eme are short-term and they basically represent the retail
trade where is these big red ones down here are higher timeframe
EMA's.
And these represent the institutional Traders banks are investors or
whatever people with the big money retail Traders like to do
short-term volatility trading, where is institutional Traders carry
the trend long-term and one of the main things that show a trend
reversal with this indicator with this strategy is actually, when
these EMA's tend to cross over each other.
Now, that crossover happened right about here, way before you got this
one right here, but if we put it in replay mode, you actually missed
one of these huge candles that broke through this previous level of
support and resistance.
You would have probably gotten in
On this one and you can see that the next candle had that big push up.
So you still were a part of it, but there's actually a way to get in
before this moving average crossover happens.
So you can get a part of all of the move.
Okay?
So what I do constantly is create levels of support and resistance.
This is very, very easy.
On a 1, hour time frame.
You look at the high points and the low points, and where the price
touched it.
The most often, this is literally as simple as taking a horizontal
line tool and clicking wherever you see the bottoms and tops of these
prices.
The next thing that you really need to start using is trendlines
trend.
Lines are going to give you the most accurate point at which the trend
is either going to continue or break through and reverse.
But what you also need to keep in mind, when trading, trendlines is a
break and a retest.
So, you can see right here, we broke out came down, did not retest and
continue to down.
Where is later?
We did break out retest with this huge huge rejection.
Now, when you see something like that off of a break and retest like,
you could have gotten in right here as this candle crossed, its
previous level of support because you see this long rejection.
And once that happens, what zone do Target, you, target your next
level of support and resistance, we got to that point three times,
right?
After now this works every single time when you're drawing out trend
lines across the price, you're waiting for brakes and retest of that
trend line, you can see every single time, it broke through, you got
that retest.
And then on those big rejection candles, you could have gotten in
instead of waiting for the Darrell guppy, or any moving average
crossover.
All right, so let's take this back to the example that I was showing
you earlier where you had the moving average crossover of the 21 and
the 200 right here.
Where is the Darrell Duffy had a moving average crossover right here,
giving you an earlier entry.
But what if you use support and resistance,
As well as a trendline to show a break in that Trend.
So what you really need to start doing is start building up all of the
confluences confluences, give you the confidence to enter in a trade
once you see that big a scandal and you guys know I love trading big
ass candles.
They are the big momentum shift.
Moves that we're looking for as our entries because it gives you the
tightest stop-loss.
So, what was your first indication on this move?
We had this massive Spike down to this support and resistance level
and this massive rejection WIC off of this Zone.
Then off of that trend line, we had these two big rejection, candles
down, right to this previous level of support and resistance with
three big momentum moves up breaking out of that previous downtrend
and starting a new trend to the upside.
So these three big momentum candles.
Plus, this massive rejection Wick shows you clearly that this price
does not like this area.
And it's going to go up happening before the Darrell guppy indicator,
shows you and happening.
Well before the 21 + 200 crossover.
And when looking for Tren reversals or rejection off of support and
resistance area, I really like to dissect double tops and double
bottoms.
We've obviously had a double bottom right here with this rejection
Wick and a retest right here.
So if we pull up the channels, TMA RSI, Divergence indicator, which is
free links down below.
It basically gives you a solid yellow line of the RSI a line across
the middle at the 50 level as well as a moving average.
That would basically show you the RSI 50 level across multiple time
frame.
So this is going to be your indication of where the trend is going.
This in Decatur also gives you divergences like hidden bearish hidden
bullish or bearish and bullish.
Not all of them always print but it's a free indicator.
So it's pretty legit.
So the ones I want to focus on right here.
Is it this low?
And this love you can clearly see that one is higher than the other
Wares on the chart.
We had a dub
Bottom.
So this shows to me even before we broke the trend line that I should
be looking for a trend reversal to be happening.
Soon, this will also prevent you from getting in a trade with the
trend.
So you want to trade moving average, crossover has, but what you need
to do is look at different things that help you get into your trade
earlier.
You're not going to be doing a 21200 crossover, that's way too late,
the move already left.
If you want to toss up the Darrell guppy.
Yeah it's better but it's not as good as some support and resistance
rejections, double bottoms and Brakes in trend lines as well as RSI
Divergence has.
This is the bread and butter of getting those Trend reversals early,
right?
As they break out of the trend and then as all of those conferences
build up you'll have more confidence going into your trade.
So for me I would have gotten in right there brake of a trendline.
I'm not worried about a moving average crossover but this is nice to
let me know that I can actually hold my trade.
Did this next support and resistance sound.
So essentially, moving average crossover is have their place but you
need to know the good stuff first before you can use this, to hold
your trade longer.
Let me know in the comment section down below what strategy you've
been working on and that you're struggling with.
And maybe I can do a video to give you some clarification.
Now, if you guys want a detailed video on how I trade RSI Divergence
has check out this video right here and if you guys got some value out
of this video and you like, the way that I teach day trading in Forex
and all that good stuff, consider subscribing to the channel by
clicking this button right here.
Thanks so much for watching and we will see you in the next video.