10 Trading Setups- As a starting point for developing your own strategy
Hey guys, here is an article about 10 trading templates using technical analysis. I will put the summary here. If you like to read the full review, you can find it here:
The way to achieve long-term profitability is through putting a bit of work upfront, understanding the markets, and honing your trading plan accordingly. Nevertheless, most traders tend to avoid constructing a trading strategy until the market turns on them.
Trading setups – aka picking the spot where you enter and exit the market – tend to get all the focus online, while proper risk management is overlooked and understudied. So, these are trading setups but without the proper risk management and position sizing, it won't take us anywhere but to constant losses.
As an important note: Each of these templates is meant to be a starting point in your trading journey and together are the most used basic setups involving technical indicators. Those templates should not be used on their own in a vacuum. In general, trading using technical indicators as a sole entry or exit signal is not the best approach. You should observe the current market structure before using these setups! But, they can be a good starting point for developing your own trading setup.
1. Lower Bollinger Band® cross – LONG
This setup opens a long (buy) position when the price closes below the lower band of the Bollinger Band® and exits when the price closes above the upper band. Bollinger Bands® is set at 2 standard deviations from the 20-day SMA.
This setup does not work well in trending markets, but profits in ranging markets. Therefore, you should implement a trend filter before you consider using this template. For higher hit rate substitute the exit conditions of an Upper Bollinger band® cross for SMA(20) – the middle line.
2. Upper Bollinger Band® cross – SHORT
This setup is the reversed setup of the previous Long template. It opens a short (sell) position when the price closes above the upper band of the Bollinger Band® and exits when the price closes below the lower band. Bollinger Bands® is set at 2 standard deviations from the 20-day SMA.
Just like the previous setup, this also does not work well in trending markets, but profits in ranging markets.
3. Uptrend with EMA, PSAR, MACD – LONG
This setup opens a long (buy) position when the price is above EMA(21), Parabolic SAR, and when the MACD line is above the Signal line all on a 1-hour timeframe. Parabolic SAR and MACD indicators both have default settings.
This setup tends to profit in uptrending market conditions and should be avoided in ranging markets. You can change the timeframe to fit your preferences.
4. Downtrend with EMA, PSAR, MACD – SHORT
This setup opens a short (sell) position when the price is below EMA(21), Parabolic SAR, and when the MACD line is below the Signal line all on a 1-hour timeframe. Parabolic SAR and MACD indicators both have default settings.
This setup tends to profit in downtrending market conditions and should be avoided in ranging markets. You can change the timeframe to fit your preferences.
You can find the rest of the review of the article on blog.cleo.finance.
5. Moving average Golden Cross – LONG
6. Moving average Death Cross – SHORT
7. Upturn in momentum with RSI, SMA – LONG
8. Downturn in momentum with RSI, SMA – SHORT
9. Upward Momentum – LONG
10. Downward Momentum – SHORT
Don’t forget – You can find all these conditions on cleo.finance and they are all free to use. You can modify the conditions, periods of the indicators, their timeframe or even the asset they are evaluated on, add other conditions, and generally play around within the platform to find out something you want to use in your trading.
The way to achieve long-term profitability is through putting a bit of work upfront, understanding the markets, and honing your trading plan accordingly. Nevertheless, most traders tend to avoid constructing a trading strategy until the market turns on them.
Trading setups – aka picking the spot where you enter and exit the market – tend to get all the focus online, while proper risk management is overlooked and understudied. So, these are trading setups but without the proper risk management and position sizing, it won't take us anywhere but to constant losses.
As an important note: Each of these templates is meant to be a starting point in your trading journey and together are the most used basic setups involving technical indicators. Those templates should not be used on their own in a vacuum. In general, trading using technical indicators as a sole entry or exit signal is not the best approach. You should observe the current market structure before using these setups! But, they can be a good starting point for developing your own trading setup.
1. Lower Bollinger Band® cross – LONG
This setup opens a long (buy) position when the price closes below the lower band of the Bollinger Band® and exits when the price closes above the upper band. Bollinger Bands® is set at 2 standard deviations from the 20-day SMA.
This setup does not work well in trending markets, but profits in ranging markets. Therefore, you should implement a trend filter before you consider using this template. For higher hit rate substitute the exit conditions of an Upper Bollinger band® cross for SMA(20) – the middle line.
2. Upper Bollinger Band® cross – SHORT
This setup is the reversed setup of the previous Long template. It opens a short (sell) position when the price closes above the upper band of the Bollinger Band® and exits when the price closes below the lower band. Bollinger Bands® is set at 2 standard deviations from the 20-day SMA.
Just like the previous setup, this also does not work well in trending markets, but profits in ranging markets.
3. Uptrend with EMA, PSAR, MACD – LONG
This setup opens a long (buy) position when the price is above EMA(21), Parabolic SAR, and when the MACD line is above the Signal line all on a 1-hour timeframe. Parabolic SAR and MACD indicators both have default settings.
This setup tends to profit in uptrending market conditions and should be avoided in ranging markets. You can change the timeframe to fit your preferences.
4. Downtrend with EMA, PSAR, MACD – SHORT
This setup opens a short (sell) position when the price is below EMA(21), Parabolic SAR, and when the MACD line is below the Signal line all on a 1-hour timeframe. Parabolic SAR and MACD indicators both have default settings.
This setup tends to profit in downtrending market conditions and should be avoided in ranging markets. You can change the timeframe to fit your preferences.
You can find the rest of the review of the article on blog.cleo.finance.
5. Moving average Golden Cross – LONG
6. Moving average Death Cross – SHORT
7. Upturn in momentum with RSI, SMA – LONG
8. Downturn in momentum with RSI, SMA – SHORT
9. Upward Momentum – LONG
10. Downward Momentum – SHORT
Don’t forget – You can find all these conditions on cleo.finance and they are all free to use. You can modify the conditions, periods of the indicators, their timeframe or even the asset they are evaluated on, add other conditions, and generally play around within the platform to find out something you want to use in your trading.