 What's going on guys welcome back to Bitcoin Daily for another video in today's video. We have a special one for you guys. So we've had a lot of requests about trading strategies. You guys want to know you know what different type of trading strategies there are and what we use and stuff like that. So even though trading strategies are always changed and they're always you know dependent on the scenario and situation today we have a special one. It's a momentum trading strategy. This type of strategy is very good for when you're following the trend and when the prices are going in an uptrend or downtrend doesn't matter you just need the momentum and go with the trend. So that's what we're going to cover today. Please guys make sure to hit that subscribe button. We're at 2100 we passed that today we want to hit 2200 by the end of this week and continue up and that's pretty much it guys make sure to like the video hit the notification bell and let's jump into it. Trading can be highly volatile. So it is very important to have an excellent strategy to secure consistent profits. Most beginners have many options most which are adopted from forex and stock trading but momentum trading is one of the best trading styles thus far for volatile markets. That's why we use them so much in crypto. This strategy reflects expression trend is your friend perfectly well. While there is no strategy without risk momentum trading gives traders more control and fewer potential failure points. Momentum trading is a strategy or trading style in which traders assess the strength of a current trend to open position in its direction. The primary rationale behind momentum traders moves is that if there is enough force driving a price move then it will continue to move in the same direction for a while. The first task of a momentum trader whether you're trading crypto or stocks is to assess a trend's strength before opening a position. The strategy involves analysis of three key metrics to understand the momentum of a trend. These are volume volatility and time frame. The volume suggests how many traders have opened positions in the direction of the trend in a given period based on a number of assets traded. However sometimes the trading volume can be manipulated by wells that means financially capable traders can buy or sell large amounts of the asset. Volatility is another important aspect of the price that is closely monitored by momentum traders. They prefer volatile markets like stock option trading or cryptocurrencies for the short-term ups and downs. Finally momentum trading is closely related to the time frame selected by a trader since a trend is making sense only within a specific time frame. For example, Bitcoin can increase on the hourly chart but that may be a temporary swing as it declines. If the trend on several time frames coincides then this considers as a stronger momentum. So we're going to go over some of the best momentum indicators to find these trades right? So for momentum traders technical analysis is critical because it helps traders define the forex stock or crypto market trend and analyze its momentum. Here are some essential technical indicators to find momentum with greater precision. Average Directional Index The average directional index or ADX is probably the simplest and most popular indicator to determine the strength of a trend. The purpose of ADX is to evaluate momentum for better judgment in an asset. Basically ADX is an oscillator and its calculations are sophisticated but effective for price trend analysis. ADX reflects the strength of a price trend on a graph which goes between 0 and 100. When ADX dips below 30 it suggests that the price is moving sideways. As ADX breaks above 30 it means that the price is trending. Ultimately the higher the ADX goes the stronger is the trend in a particular direction. However make sure that you know that the ADX doesn't show whether a trend is bullish or bearish as the indicator is focusing on momentum alone. Moving averages are the oldest and most common technical indicators out there. They have been popular for decades to analyze all kinds of assets and it's for good reason. Moving averages cut the price action's noise to smooth the volatility that confuses traders and displays the general trend. Traders use moving averages to calculate the average of price movement over a given period. For momentum traders moving averages are important because it can show whether a trend continues its direction or tends to go sideways. It is visually apparent as the moving averages follow the price action. Traders would generally use two moving averages with different periods. When the shorter moving average crosses the longer moving average then the existing trend may be reversing and momentum traders will be interested in closing out positions. The relative strength index is one of the most popular oscillators which acts as a momentum indicator. It calculates the size and magnitude of the latest price changes. The RSI line is on a separated chart below the price action and goes between 0 and 100. If the RSI goes below 30 it shows an oversold level suggesting that the current downtrend might reverse. On the flip side, if the RSI goes above 70 the market enters an overbought level meaning that the current uptrend is losing momentum and might gradually turn into a downtrend or move horizontally. Thus momentum traders should be on alert whenever the RSI is above 70 or below 30 as the bullish or bearish sentiment is reaching over saturation and the trend is changing. Moving average convergence divergence or MACD is a bit more sophisticated. It behaves like both a momentum and trend following indicator. The MACD merges two exponential moving averages and its results is calculated by subtracting the 26th period EMA from the 12th period EMA. However the two lines displayed on the MACD chart are not the two EMAs used by the indicator instead one of the lines is the MACD line and another one is the signal line which can determine changes in price momentum and provide buy or sell signals. There is also a histogram which represents the difference between the MACD line and the signal line. When the two lines depart from each other momentum is considered more substantial and traders can rest assured that the current trend would continue. There are many momentum strategies that involve several technical indicators or chart patterns to provide buy or sell signals. Here I will show you one of the simplest and still reliable strategies that you can test on your own trading platform. For this you will need to set an exponential moving average with period 19 and the ADX indicator. Here are the buy conditions. Check whether the ADX is at 30 or above. It shows that the price is trending. Next check whether the EMA is pointing upwards. It suggests an uptrend. Next wait for a candlestick to close fully above the EMA and enter a long position. Then you can exit the market manually when the price crosses the EMA. Don't forget to check the volume from time to time. Higher volumes suggest strong momentum thus signaling a more accurate indicator to buy. On the contrary if you intend to go short with this strategy you should meet the following conditions. First check whether the ADX is at 30 or above. Note that the ADX shows a trend strength rather than the direction. Next check whether the EMA is pointing downwards because it suggests a bearish trend. And last enter the market after the first candlestick that closes below the EMA with its full body and shadows. Momentum trading is an excellent style for beginners because of its simplicity. Here are some benefits of this approach. Momentum trading can be profitable since it follows a trend. It can work with any timeframe and suits both day traders and swing traders. Momentum trading allows cryptocurrency traders to leverage high volatility. Obviously there is no trading strategy without its risk. Momentum trading is very dependent on the trend and sometimes traders can be taken by surprise by unexpected trend reversals. It's important to note that technical analysis indicators cannot always anticipate reversals since they analyze past prices. Also prices can move up and down without any prior clues due to unexpected events. So you should always consider those things. To succeed with momentum trading you have to apply proper risk management techniques and stick to the strategy that you choose. All in all momentum trading is one of those universal strategies that are suitable for both beginners and professionals. Momentum trading is backed by a lot of technical indicators that were designed precisely to determine the strength of a trend. The great thing about this style is that it can do a great job with any timeframe higher than 30 minutes. This strategy can be implemented by both day traders and swing traders. Thanks for watching guys. Peace and love.