How to Trade Bitcoin with Bollinger Bands (and other cryptocurrencies too) // trading strategy


How to Trade Bitcoin with Bollinger Bands (and other cryptocurrencies too) // trading strategy cryptocurrency tutorial technical analysis chart charts swing day ethereum litecoin ripple explained david moadel welcome to looking at the markets with
David Modell today I just wanted to show you that you can use a lot of the same
indicators that you use for stock trading or commodities trading or
whatever futures trading you can use them for crypto currencies as well and
I’m going to show you on a Bitcoin to US dollar chart but you can really apply
this equally well I would imagine to other crypto currencies now to charts or
I’m sorry to websites that I like to use for free charting at least they’re free
right now our trading view calm and stockcharts.com those are a couple of my
favorites not the only ones out there though all right so right now I have the
Bollinger Bands up there and first of all what our Bollinger Bands well I’m
gonna use a little bit of information from stock charts calm so thank you to
them I want to give them credit basically the middle band in the
Bollinger Bands is the 20-day simple moving average that’s it so and this is
a daily chart you can adjust this to you know intraday charts 1 minute 2 minute 5
minute candles whatever you can you can put it on four weekly charts monthly
charts whatever you like alright so the middle line the mid line
on the Bollinger Bands is just the 20-day simple moving average alright so
you take the last you know most recent 20 closing prices you know most recent
20 candlestick closing prices and just add them up and divide by 20 and that’s
what this line represents pretty simple all right and then the upper band is the
20-day simple moving average plus two standard deviations above that and then
the lower band is two standard deviations below that that’s all it is
and these are the formulas if you really want to know the exact formulas all
right so you know the midline that’s the
20-day simple moving average and then this upper band represents two standard
deviations above that and then the lower band represents two standard deviations
below that all right so how do you get that on this chart you would go to at
least on tradingview you would go to indicators and you’d go down to
Bollinger Bands and you put that on which I already did and then how do you
adjust it you can go to the little gear thing here format and it doesn’t have to
be 20 it could measure from more or fewer you know as you can see it’s
expanding the arteries are getting wider they’re the bands okay and then you know
this is like if you put on 40 days it’s much wider and so it’s not going to give
you as many signals if you use the bottom band as a buy signal and the top
band as a sell signal you know you might buy it you might buy
Bitcoin if you know the price if the candle clearly closes below makes it
clear break below the bottom band and you know if it closes below it you can
buy it and then wait until it closes above the upper band to sell it and so
you could have bought here and sold here for a nice profit on Bitcoin all right
now this is on this is very wide all right you’re not gonna get as many
signals if you widen them out by increasing the the number on the
settings but it could run further though if you like if you like fewer signals
but bigger runs then maybe you could wind them widen them alright if you want
to click on the little gear there and make them narrower the standard setting
the default setting is 20 let’s see what that looks like again and that is here
and as you can see it’s not going to run as much necessarily although it did okay
here it actually closed in the in the same place all right so you know you’ll
get more signals this way the tighter you make them actually yeah you can also
you know I’ll just use this gear right here it’s easier the tighter you make
them you’ll get more signals but it won’t be able to run as much for example
you would have you know but maybe actually no you would have
bought that this is on 10 you know you might have bought on this clear break
down here and then you would have sold you know probably earlier probably here
it broke clearly above here so you wouldn’t it wouldn’t have run as far all
right so 20 is fine but if you like a longer run with fewer
signals you can adjust accordingly I’ll put it back on 20 though just to show
that one all right once again all right there we go and
that’s a standard standard setting and it works pretty well
now with Bitcoin I do not recommend using this as a short signal you know
some people might say oh well you can short it if it has a clear break above
the upper band okay well Bitcoin tends to go up very
sharply in case you haven’t noticed it just goes up and up and up at least it
has so far in the past year or a couple of years at least so you can see a clear
break above the upper band you can use that as a as a sell signal because you
know if let’s say you’ve sold here and it just kept going up well I mean it’s
no big deal you would have missed out on a little
bit of gains there but you still would have profited quite nicely if you bought
here and then sold here you know what’s the worst thing that can happen if you
sell a little bit early all right you would have missed out on a little bit of
gains but you’re not losing money by by selling for a profit all right you’re
just losing you’re leaving money on the table but it’s not the end of the world
whereas if you’re in the game of shorting that’s a dangerous game to play
with with Bitcoin I don’t recommend it because look you see a clear break above
here and if you say oh I’m going to short sell it I’m gonna short it I’m
gonna bet that it’s going to go down and it just went up and up and up and then
sideways and then up alright and so you would have been losing money losing
money losing money again up here so you know yeah it did go down afterwards but
can you can you stand to lose this much money can you tolerate it yeah well you
know why even do that to yourself alright so after a clear break above the
upper band if you’re thinking about shorting it
recommend it I just recommend only using the bands with at least with Bitcoin
only for long positions alright and again this is not telling you what
to do this is not advisement on how to trade it’s just an idea you have to make
your own decisions with this all right do your own due diligence find your own
methods but this is one way to trade Bitcoin at least you can swing trade it
this way on the this is the daily chart here but if you if you have different
timeframes adjust accordingly alright I hope you give you some good
tips on trading bitcoin with Bollinger Bands as well as other cryptocurrencies
alright if you enjoy this video please by all means give it a thumbs up on
YouTube and you can contact me anytime at David Modell at gmail.com thank you
so much I really appreciate it and I’ll talk to you again soon thank you for watching please like
comment and subscribe and I’ll see you next time

6 thoughts on “How to Trade Bitcoin with Bollinger Bands (and other cryptocurrencies too) // trading strategy”

  1. If you're going to buy Bitcoin I love coinbase but if you're going to trade Bitcoin honestly I would just buy Litecoin but if you're going to trade Bitcoin I would do it through Kraken because it doesn't cost nearly as much to buy and Sell!!

  2. And I'm pretty sure the run up right now even though I think we'll be at close to 14,000 by the end of next March I think the run up right now is because of the hard fork for Bitcoin gold!

  3. Cool Video! How effective are bollinger bands regarding the timeframe you are viewing? Are the reliable just for viewing one candle per day or even if I set the timeframe for one candle per 5 minutes?

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