This strategy is called "The 4 V's", it is made up of 2 indicators available on Binance and can help you predict movements.

  • It has a fairly high success rate and is very intuitive if you are just starting to analyze charts.

  • No knowledge of price structure, fibo plotting or smart money analysis required.

  • It can help you in low time frames, where it is more appropriate.

What indicators do we use?

  • Being a basic strategy, we will only use 2 indicators, the MacD and the RSI, in addition to the price.

Both in their default configuration and the graph seen in Japanese candles.

What are the 4 Vs?

The 4 V's are the clues we will look for to determine the direction of the price.

Let's illustrate them using $LTC in 1H time frame.

  • First V, when the price starts to turn around.

  • Second V, when the RSI changes direction.

  • Third V, when the MacD moving average (which tells us the strength and direction of the price) turns.

  • The fourth V is the most visual, it is the "mountain" of the MacD. When it begins to recede, it forms a parabola.

How do we use it?

  • The first thing is to identify the general trend, as seen on larger charts. If the trend is bearish, we will look for shorts, if it is bullish, we will look for longs. We do not operate against the trend.

  • It works both ways, but if we trade with the trend, our movement will be greater.

  • What we need is to confirm at least 3 of the 4 V's. For example, in the chart you can see how when touching 68.55 the price leaves a wick (first V), the RSI curves downwards (second V) and the MacD as well (3 and 4 V). Then the movement is a fall, until another 4 V's are formed in the opposite direction (those indicated).

  • The strategy consists of: Identifying the 3-4 V's, trading the movement and closing it when they form in the opposite direction. Marking entry and exit points in short operations.

Considerations:

  • It is a very simple strategy, so its success rate is moderate. It is acceptable, but not 100%

  • We operate with indicators, which respond to past movements. These indicators are susceptible to misinterpreting price manipulations, reducing accuracy.

  • It is a beginner's guide, useful for taking our first steps. It teaches us how to interact with indicators, interpret them and gain experience.

  • Before using it, backtest it on your chosen asset. It may happen that this strategy is well suited for coins with smaller caps like LTC, or memes like Pepe or Dogs. First, analyze how useful it is for your asset.

  • It can complement other strategies and indicators.

  • Please operate with caution and do not put your capital at risk.

  • Remember that the cryptocurrency market is very volatile and no strategy is 100% correct.

If I got this far, I thank you for your time. Comments are always welcome, as long as they are respectful.

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