Welcome to week 4 of the cypto academy season 3, this is a great lecture by @cyptokraze and i feel that i really benefited from this lecture, due to the demand of the lecturer to avoid lengthy paragraphs i will go directly to the homework post
I am @kelechisamuel and this is my homework post for @cryptokraze
What do you understand about the Concept of Dynamic Support and Resistance? Give Chart Examples from Crypto Assets. (Clear Charts Needed)
it is great to point out that support occurs when the price stops reducing and changes direction upwards, likewise resistance occurs when the price stops increasing and changes direction downwards which is a great technical analysis that influences a major part of decision making in our trades
having gotten an introduction to what support and resistance it is also important to point out that we have a static and dynamic resistance. A static support and resistant is on a horizontal level while dynamic support and resistance is on an evolving level that can pull down or pull up to find support or resistance at any time respectively
in this homework post we will be using Exponential Moving Average (EMA) indicator to display how effective the EMA could be on an asset chart in the revealing of dynamic support and resistance concept
From the ATM/USDT chart on a 15mins time frame above, we can see the asset's price reducing until it touches the Exponential Moving Average (EMA), and changes direction upward. we can say the EMA is acting as the Dynamic Support.
From the LTC/USDT chart on a 15mins time frame above, we can see the asset's price increasing until it touches the Exponential Moving Average (EMA), and changes direction downward. we can say the EMA is acting as the Dynamic resistance.
Make a combination of Two different EMAs other than 50 and 100 and show them on Crypto charts as Support and Resistance. (Clear Charts Needed)
For this question, i will be using the combination of 50 and 200 EMAs to determine the dynamic support and resistance of the asset chart below which will aid in accurate decision making.
the 200 is used on a longer indicator term while the 50 remains on a short term indicator getting the price action. when ever we see the 50 EMA crossing over the 200 EMA as we can see below it indicates that the short term is taking a new change and we can see the price respecting the 50 EMA below for DYNAMIC RESISTANCE
Also below is a chart where the 50 and 200 EMAs are used to show DYNAMIC SUPPORT. in the graph below, we can also see the Golden cross which occurs when the 50 crosses over the 200 ema which gives a potential for a huge rally
Explain Trade Entry and Exit Criteria for both Buy and Sell Positions using dynamic support and resistance on any Crypto Asset using any time frame of your choice (Clear Charts Needed)
TRADE ENTRY CRITERIA
for this question i will be using the 50 and 200 EMAs to explain the entry criteria for both buy and sell positions using the dynamic support and resistance
First of all I added the 50 and 200 EMAs to enable us achieve our dynamic support
for a valid buy setup it is important that the price is above the EMAs
it is important to allow the price touch the 50 EMA but do not buy at the touch, wait a little incase it decides it change direction. this is to enable a valid setup
as soon as it moves above the 50 EMA, you can place order. we can see the application on the chart below
First of all I added the 50 and 200 EMAs to enable us achieve our dynamic support
for a valid sell setup it is important that the price is below the EMAs
it is important to allow the price touch the 50 EMA but do not sell at the touch, wait a little incase it decides it change direction. this is to enable a valid setup
as soon as it moves below the 50 EMA, you can place order. we can see the application on the chart below
Trade Exit Criteria
for this question, i will be using the 50 and 100 EMAs to determine the exit strategy
I set a stop loss level below the 100 Exponential Moving Average(EMA)
I was careful to ensure that the price do not cross the stop loss to avoid an invalid setup
I took a Profit level that is equal to our stop loss level 1:1 RR
As soon as the price reaches the take profit, you can exit the trade
I set a stop loss level above the 100 Exponential Moving Average(EMA)
I was careful to ensure that the price do not cross the stop loss to avoid an invalid setup
I took a Profit level that is equal to our stop loss level 1:1 RR
As soon as the price reaches the take profit, you can exit the trade
Place 2 demo trades on crypto assets using Dynamic Support and Resistance strategy. You can use lower timeframe for these demo trades (Clear Charts and Actual Trades Needed)
Here I will be placing 2 different trades where one will be for the buy position and one for the sell position, the buy position will be done on an actual binance trade while the sell will be done on MT5
From the chart of AXS/USDT at 15mins time below, the price was above the 50 and 100EMAs, i waited for some time for the price to go way above the 50 EMA before placing trade to avoid an invalid setup. we can take a look at the trade below.
TRADE DETAILS
Buy Entry: 38.4501 USDT.
Profit Level : 45.8129 USDT.
Stop Loss: 28.2495 USDT.
From the chart of BNB/BTC at 45mins time above, the price was below the 50 and 100EMAs, i waited for some time for the price to go below the 50 EMA before placing trade to avoid an invalid setup. we can take a look at the trade above.
also the stop loss level was placed above the 100 EMA
TRADE DETAILS
Sell Entry: 0.008945 USDT.
Take Profit : 0.008942 USDT.
Stop Loss: 0.008970 USDT.
CONCLUSION
The dynamic support and resistance using the exponential moving average is a great technical indicator that aids trading in the crypto currency world easy helping the trader to gain early access into the trade
Moreso, the 50 and 100 EMAs are a great combination to determine the dynamic support and resistance, we also have great combinations that go a long way (for example the 20 and 50, 50 and 100, 50 and 200 EMAs). i really learnt a lot in this home work post and I am glad i made the attempt
best regards
@cryptokraze
Dear @kelechisamuel
Thank you for participating in Steemit Crypto Academy Season 03 and making efforts to complete the homework task. You got 7.5/10 Grade Points according to the following Scale;
Key Notes:
We appreciate your efforts in Crypto academy and look forward for your next homework tasks.
Regards
@cryptokraze
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