When trading with the 20-day moving average, it is important to closely adhere to the core logic of "the moving average determines the direction, the Candlestick provides signals, and the Position controls risk." The specific operational details are as follows:
Moving Average Direction: First, look at the slope of the 20-day moving average—when it is sloping upwards, the overall direction is bullish, only take long positions; when it is sloping downwards, the direction is bearish, only take short positions; when it is flat, it is considered a sideways pause and no action should be taken. The moving average direction on the 4-hour chart is more stable and is more suitable for beginners to prioritize as a reference.
Candlestick signals: To go long, wait for the price to stabilize above the moving average, with two consecutive Candlestick closing prices above the moving average, and the second Candlestick not dropping below the moving average, which is considered a valid signal; to go short, the price must drop below the moving average, with two consecutive Candlestick closing prices below it, and not rebound back above the moving average. A single Candlestick breakout does not count, to avoid false signals.
Position control risk: When the trend is clear (the slope of the moving average is steep and the price is far from the moving average), you can establish a position of 50-70%; when the trend is flat (the slope of the moving average is small and the price is close to the moving average), only establish a position of 20-30% in spot. For Ethereum contracts, set the stop loss 20-30 points outside the extreme value of the entry candlestick, suitable for short-term trades on 15-minute or hourly charts; stop losses on 5-minute charts can be smaller. Take profit based on previous highs and lows or moving average reversals—if a long position breaks below the moving average and does not recover, liquidate immediately; the same applies to short positions.
Remember: Do not open positions against the direction of the moving average, do not enter when the Candlestick signals are unclear, and do not over-leverage on a single direction. Simple logic + strict execution of ten Position management is necessary to ensure each trade is well-founded.
This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.
When trading with the 20-day moving average, it is important to closely adhere to the core logic of "the moving average determines the direction, the Candlestick provides signals, and the Position controls risk." The specific operational details are as follows:
Moving Average Direction: First, look at the slope of the 20-day moving average—when it is sloping upwards, the overall direction is bullish, only take long positions; when it is sloping downwards, the direction is bearish, only take short positions; when it is flat, it is considered a sideways pause and no action should be taken. The moving average direction on the 4-hour chart is more stable and is more suitable for beginners to prioritize as a reference.
Candlestick signals: To go long, wait for the price to stabilize above the moving average, with two consecutive Candlestick closing prices above the moving average, and the second Candlestick not dropping below the moving average, which is considered a valid signal; to go short, the price must drop below the moving average, with two consecutive Candlestick closing prices below it, and not rebound back above the moving average. A single Candlestick breakout does not count, to avoid false signals.
Position control risk: When the trend is clear (the slope of the moving average is steep and the price is far from the moving average), you can establish a position of 50-70%; when the trend is flat (the slope of the moving average is small and the price is close to the moving average), only establish a position of 20-30% in spot. For Ethereum contracts, set the stop loss 20-30 points outside the extreme value of the entry candlestick, suitable for short-term trades on 15-minute or hourly charts; stop losses on 5-minute charts can be smaller. Take profit based on previous highs and lows or moving average reversals—if a long position breaks below the moving average and does not recover, liquidate immediately; the same applies to short positions.
Remember: Do not open positions against the direction of the moving average, do not enter when the Candlestick signals are unclear, and do not over-leverage on a single direction. Simple logic + strict execution of ten Position management is necessary to ensure each trade is well-founded.