TASKS
1- Define VuManChu Cipher B Indicator in your own words.2- How to customize the VuManChu Cipher B Indicator according to our requirements? (Screenshots required)
3- Explain the appearance of the VuManChu Cipher B Indicator through screenshots. (You should Highlight each important part of this indicator by explaining their purpose)
4- Demonstrate your preparation for the Trading Strategy combining other indicators. (Instead of showing the addition of indicators to the chart, you should explain the purpose of each indicator for this trading strategy.)
5- Graphically explain how to use VuManChu Cipher B Indicator for Successful Trading. (Screenshots required)
6- Using the knowledge gained from previous lessons, do a better Technical Analysis combining this trading Strategy and make a real buy or sell order in a verified exchange. (You should demonstrate all the relevant details including entry point, exit point, resistance lines, support lines or any other trading pattern)
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1- Define VuManChu Cipher B Indicator in your own words.
The VuManChu Cipher B Indicator is a technical analysis indicator which helps to predict both bullish and bearish market conditions. It comprises of other indicators like the Relative Strength Index RSI and Market volume and momentum flow etc. This indicator was created with respect to another technical analysis indicator, the Market Cipher. The market cipher is only obtainable and usable upon purchase but the VuManChu Indicator, having little difference to the market cipher indicator allows traders to get the experience of using the market cipher indicator.
The VuManChu indicator is a wave trend type of indicator which traders use to analyze the current trend in the market as well as the areas of volume by making use of the money flow index. By representing the inflow and outflow of volume with two oscillating lines the directional movement of price can be confirmed. The VuManChu helps to give off signals by making use of a dot signal in between price action which is generated after a cross over takes place to tell the side of the market that is in control. i.e a green dot is displayed for bullish takeover and a red dot is represented for bearish pressures.
2- How to customize the VuManChu Cipher B Indicator according to our requirements?
I'll be making use of trading view to customize the VuManChu Cipher B Indicator
Firstly, I head over to trading view official website and click on charts to select a chart pair of my choice.
Next, I click on the tab marked fx indicators located at the center top.
Type in keywords such as VuManChu and click on VuManChu cipher B to add the indicator to chart.
Once the above is done, the indicator will be added to chart successfully.
Customizing the indicator settings
To customize the settings of the VuManChu indicator, click on the Settings icon located on the upper part of the indicator name.
The different customizable settings include
Inputs tab
Here we can customize the indicator to make its features look less clustered. To do this, I'll be removing some indicator parameters as the indicator strategy taught by the crypto professor doesn't require some divergence options.
Firstly, i uncheck "Show WT Regular Divergences and "Show 2nd WT Regular Divergences" options.
Next, I navigate towards the "Show Stochastic RSI " option and uncheck it as it is not relevant to the trading strategy also.
Style Tab
In the style tab, different customization features such as precision, curve color and thickness exist and can be customized to suit a trader's preference of appearance. I'll also be unchecking some parameters that are irrelevant to the trading strategy in the style tab.
Firstly, i navigate to 'VWAP" and uncheck this box on the menu. This option is not necessary for the strategy because the VWAP is a volume-weighted indicator that calculates and displays the weighted average price.
Next, i scroll down to the "MFI bar colors" option and uncheck it. This option displays the money flow volume (both inflow and outflow) with different color bars. It's a variant of the money flow index and isn't necessary for the indicator strategy also.
After the different customization and configuration, the VuManChu indicator is very neat and less cluttered than before.
all chart images in this section were gotten from Trading view>
3- Explain the appearance of the VuManChu Cipher B Indicator through screenshots.
The VuManChu Cipher B Indicator is comprised of many other indicators therefore its important to have an idea of the different indicators that primarily make up the VuManChu to facilitate easy use of the indicator
The wavetrend indicator is made up of two tone blue lines which are light blue and dark blue respectively. It usually oscillates around the base of the indicator. Whenever the wavetrend crosses (light blue line and dark blue line), this move is indicated with dots depending on the type of crossing.
The dots are either red or green indicating the side which has control of price as indicated in the image below.
Red dots are given to indicate bearish control over the market while green dots are given to indicate bullish control over the market.
The money flow index measure the inflow and outflow of money from an asset. It represents these situations by alternating the colors of the cloud between red and green. Whenever the cloud is red, it indicates the outflow of money from an asset and whenever the cloud is green, it indicates the inflow of money into an asset
4- Demonstrate your preparation for the Trading Strategy combining other indicators.
The trading strategy involves a combination of a set of moving averages to the VuManChu Cipher B indicator
For this strategy, the VuManChu Cipher B indicator is paired with two Exponential Moving Averages (EMA), the 200 period moving average and the 55 period moving average to help filter out false signals generated by using the VuManChu Cipher B indicator alone.
The use of the Exponential moving averages is to help generate trade signals whenever they cross each other. i.e. A buy signal is given off whenever the 55 period Exponential Moving Average crosses the 200 period EMA. This move indicates that the bulls are in control of price and similarly, a sell trade is generated whenever the 200 period EMA crosses above the 55 EMA indicating that the bears are currently in control of price.
This strategy helps to filter out false signals as trades would only be taken whenever the VuManChu Cipher B indicator confirms the trade signal given off by the Exponential Moving Averages.
5. Graphically explain how to use VuManChu Cipher B Indicator for Successful Trading.
As explained subsequently, for trades to be considered as valid, the two indicators utilized in this strategy must confirm the trade. A graphical illustration is given below.
For a bullish scenario to be confirmed, the 55 EMA has to cross above the 200 EMA and once this condition is satisfied. The volume flow (MFI) on the VuManChu Cipher B Indicator has to be green indicating the inflow of money into an asset. Just like the law of demand speculates, high demand will drive price further upwards therefore the inflow in this scenario is high volume of demand flowing into the asset to push the asset price up.
Lastly, attention should be paid to the wavetrend of the VuManChu Cipher B Indicator. The crossover between the light blue and dark blue line should be indicated with a green dot which would serve as the buy entry signal for a trade. An example is given in the image below
Buy Entry using the VuManChu Cipher B plus EMA trading strategy
In the CAKE/USDT chart pair above, the EMA and the VuManChu Cipher B indicator both confirmed the buy entry signal. The MFI was green during the crossover and the wave trend indicated a green dot upon the crossover, validating the buy entry for this trade.
For a bearish scenario to be confirmed. the 200 EMA has to cross above the 55 EMA and once this condition is satisfied. The Volume flow (MFI) on the VuManChu Cipher B has to be red indicating the outlow of money from as asset. Outflow will create supply and just like the microeconomic law says, too much supply will drive price down.
Also, on the wavetrend of the VuManChu Cipher B Indicator. The crossover between the light blue and dark blue line should be indicated with a red dot which would serve as the sell entry trade signal for a tradE. An example is given in the image below.
Sell Entry using the VuManChu Cipher B plus EMA trading strategy
In the AXS/USDT chart pair above, the EMA and the VuManChu Cipher B indicator both confirmed the sell entry signal. The MFI was red during the crossover as observed in the chart image and the wave trend indicated a red dot upon crossover, validating the sell entry for this trade.
6- Using the knowledge gained from previous lessons, do a better Technical Analysis combining this trading Strategy and make a real buy or sell order in a verified exchange.
I'll be making use of my verified binance for this trade.
From the SAND/USDT based on price movement, the asset price maintained resistance at $5.8898 and price consolidated for a while. Shortly after, price broke above the resistance zone and closed above the resistance. We confirm the bullish impulse by waiting for price to retrace and retest the resistance. This is where the resistance became support, the retest was successful and price continued its bullish impulse after retest. The 55 EMA is above the 200 EMA and we wait until price broke above the previous swing high created by the first bullish impulse.
Once that criteria was satisfied, we notice the Money Flow Indicator was green indicating inflow and the wavetrend crossover gave a green signal confirming the buy entry.
The trade was taken in a 1:1 risk/reward ratio with my verified Binance mobile wallet as shown below.
Conclusion
The VuManChu Cipher B is a wonderful indicator for traders. It functions as free alternative to the paid indicator market cipher which helps traders determine buy and sell entry in a trending market.
The crypto professor has done an excellent job of explaining the use of this indicator in a simple way. Thanks to the steemit team for the crypto academy, It's done far much in helping me tackle the markets one indicator/strategy at a time.
alright, thanks for your review
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