Trading Strategies for BitcoinCash(Nov.12th)

Bitcoin Cash is a direct split from Bitcoin. It is a peer-to-peer electronic cash for the internet. It is fully decentralized with no central bank and requires no trusted third parties to operate. It is the 4th most valuable cryptocurrency after Bitcoin, Ethereum and Ripple. The current Bitcoin cash market cap is above $16 billion while the total circulating supply is about 17 million.
The only indicator you will need is the Volume Weighted Moving Average (VWMA) which is the average price of a coin weighted by volume and gives the best performance when used intraday. It helps in identifying suitable points at which to buy or sell and to measure the success of your past bitcoin cash trades. If the price of bitcoin cash is below VWMA, the trend is bearish, otherwise, it is bullish.

Steps to consider when trading Bitcoin Cash:

Wait for a strong breakout and a close above VWMA

We can use different tools to determine whether the Bitcoin Cash breakout above VWMA is genuine but the most accurate one is to use the price action. When the Bitcoin Cash price trades above the VWMA, we know it is a bullish signal. Moreover, the higher the closing price, the better.

Look for a retest of the VWMA and a reaction higher from it

This reaction higher should develop a pin bar pattern or a candlestick bar that has long wicks and they represent institutional buying as seen in the figure below.

Buy at the opening of the next candlestick after the pin bar

Hide your protective stop loss below the breakout candle

The lowest price of the breakout candle is the moment smart money has stepped into the market. If this level gives up then we know the bulls are very weak and it’s time to let the trade go.

Define a take profit level

When the Bitcoin Cash price trades below the VWMA, it shows the trend is bearish. It is thus advisable to take profit when we break and close below the VWMA. In order to avoid being caught in a false breakout below the VWMA, take partial profits and then trail your stop loss below the VWMA.