2 TradingView Strategies for trading crypto

Mark O'Donnellon 02/12/2022|
2 min read

Trading cryptocurrency could be highly rewarding using the right indicators and TradingView strategies. A TradingView strategy is a script that can send, modify and cancel buy and sell orders when it recognises specific conditions on the chart. In addition, strategies allow traders to carry out backtesting to expose the validity of a strategy while on TradingView charts. 

There are numerous strategy options available on TradingView. We shall consider two of such strategies in this article: The BarUpDn Strategy and the MACD Strategy.

BarUpDn Strategy

This strategy continuously checks any quick price changes in the market for the cryptocurrency pair you are monitoring before deciding to go long or short. In addition, the BarUpDn strategy uses the color of bars or candlesticks in its analysis. 

Before entering a long position using this strategy, the current candlestick or bar must be green. That is, the close of the current candlestick is larger than the open, and the opening of the current candlestick is above the close of the previous bar. For a short position, the current candlestick will be red. By this, the opening of the current red candlestick is below the close of the bar that proceeds it.

In this strategy, the moment the percentage loss exceeds the amount specified by the indicator for the day, all opened and running positions will close.

FTX token 1H, with BarUpDn Strategy

MACD Strategy

MACD stands for Moving Average Convergence Divergence. It is widely used by active day traders. MACD strategy indicator on TradingView works on three components: Two Moving averages and a histogram. The two moving averages are essentially Exponential Moving Averages (EMA’s lines). The main line is the slow line, which is the MACD, while the second is faster and is the signal line.

When the two lines come together, we call this convergence, and when they are away from each other, we call this divergence. The histogram serves the function of showing the difference between these two moving average lines. The zero line on the histogram is the point where the price of the cryptocurrency pair’s momentum is zero. The histogram grows larger when there is a rapid change in the price in the upward direction. At the same time, it shrinks when there is a deceleration in the crypto asset price.

There are three ways a crypto trader could use the MACD strategy indicator on TradingView. They are Crossovers, Histogram Reversals, and Zero Crosses. The Crossover strategy is a lagging strategy because it is based on holding until you see a price movement before opening a trading position. The Histogram Reversal is a leading strategy as it depends on general trends from historical data for trade entry and exit. Finally, the Zero Crosses approach uses the EMAs crossing the zero line as a basis for trading decisions. When the signal line crosses the zero line, it is said to be in an uptrend, and a downtrend when it is below the zero line.