The first condition that Cardano requires to satisfy is to trade above the 200-day moving average.
When price trades above the 200-day moving average we know we have a strong premise for a to be put in place.
The more time Cardano price spends above the 200-day moving average and the biggest the distance between the price and the 200-day moving average the stronger the trend is.
Step #2: needs to be above average and twice as much compared with previous bars needs to come in
We need to look for instances when the bars are above the average (the red moving average). But this is not all; we also need the buying to be twice as much as previous bars.
In our Cardano chart we can note five instances where the was not just above average, but it was also double as the previous bars. In this case, we’re dealing with five possible buying levels.
Wait for trading situations where the buying is increasing considerably. This really shows institutional buying that has the power to move the coin price.
Step #3: After has increased, buy at the opening of the next candle
When to buy Cardano is quite intuitive if you have followed this cryptocurrency step-by-step guide.
The moment we see institutional buying presence we want to be sure we’re not left out. In this regard, after the has increased, we buy at the opening of the next candle preceding the big candle.
Usually, you’ll be buying right after the first candle that often is the starting point of a new trend. Don’t be afraid to buy on the way up as this will pay handsomely in the long run.
Step #4: Place protective Stop Loss below the 200-day moving average
Hide your protective stop loss below the 200-day moving average.
A market that has a strong should not drop below the most powerful moving average aka the 200-day moving average. By hiding your stop loss below the 200 moving average, we’re minimizing risk as much as possible.
Note* as the trend progresses you can also trail your stop loss below the 200-day MA.
Step #5: Take Profit when we break and close below the 200-day Moving Average
The 200-day moving average can serve us as a significant trigger for our exit strategy.
When we break below the 200 moving average, that’s the first sign that the trend is about to change the tide. When these happen make sure you take profits.
Note** the above was an example of a BUY trade using the Cardano trading strategy. Use the same rules for a SELL trade – but in reverse.