Best Practices for Trading the EasyCrypto Buy/Sell Signal Indicator and EasyCrypto Oscillator with Linear Regression Channel.
Channels are an important component of technical analysis. If you like entering and closing trades in a short period of time, then this article will definitely suit you best.
Friendly Reminder: If you do not have previous technical analysis experience, it is highly recommended you follow our Trading signal bots for entry and stoploss update through our discord server.
What is Linear Regression Channel?
Linear Regression Channel is a three-line technical indicator, which outlines the high, the low, and the middle of a trend. The indicator easily allows you to see where the current trend is going, perfect for traders to find optimal entry points during price tendencies on the chart. It also tell you where price is in relationship to the regression line and whether there is overbought / oversold conditions. Combine Linear Regression Channel indicator with EasyCrypto Buy/Sell Signal Indicator and EasyCrypto Oscillator to refine your trading approach.
Upper Channel Line: A line that runs parallel to the Linear Regression Line and marks the tops of a trend.
Lower Channel Line: This line runs parallel to the Linear Regression Line and marks the bottoms of a trend.
Median Channel Line: The median line is the base of the Linear Regression Channel indicator. It draws the midpoint of the trend. The upper and lower lines are evenly distanced from this middle line.
How to add Regression Line Channel?
- Log into Tradingview and choose your currency pair ex. BTCUSD
- Click on indicators icon at the top navigation, select 'Invite-Only Scripts' on the side menu
- Search for this : Linear Regression
- Add it as an indicator
- Click on the little icons to configure the settings you need
Things to keep in mind:
- Do not enter a long trade when Oscillator is at the top (Overbought) with a sell signal on higher timeframe on a bullish price trend because a pullback is imminent and vice versa for a short trade.
- If Osciallator is at the bottom (Oversold) and EasyCrypto Buy/Sell indicator signaled a 'Buy' on higher timeframes, a bullish impulse is upcoming. To enter a trade, you must check lower timeframes 15m to 1h to look for possible entry.
- Avoid opening a long trade on a bearish price trend ( regression channel going down ) if the Buy signal candle is at the Median Channel Line.
Entering a Trade
To enter a long trade, you should long only when EasyCrypto Buy/Sell indicator signaled a 'Buy' and the candle touches the bottom of the lower line indicator, and Oscillator is at the bottom. Opening a short trade works the same way, but in reverse fashion.
You can use the same technique when entering a trade in all timeframes.
This is the 4h chart of the LTC/USD pair for June 4-11, 2019. The image shows a bullish Linear Regression Channel. Each time that the price interacts with the upper or the lower line, we should expect to see a potential turning point on the chart.
Take a look at the circled points on the chart. EasyCrypto Buy/Sell indicator signaled a 'Buy' and the Oscillator is at the bottom, you open a long. Then we should place a stop loss order right below the new low. The price increases through the median line, creates a swing in the median area and then expands to the upper level of the indicator. This is where you should look to close your trade if you are swing trading.
Note that you need to follow the stoploss update through the trading signal bots in discord. If you are manually trading your favorite pair, then you can follow the above strategy.
There are diverse ways to use the oscillator. For example you can use it to find divergence.
This is the 4h chart of the XAUUSD pair for June 2019. The image shows a bullish Linear Regression Channel. The price has been going up but Oscillator starting to go down.