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Description
Rise/Fall Strategy
1. Setup
- Timeframe: 5-minute chart
- Indicators:
- 5-period Simple Moving Average (SMA)
- 20-period Simple Moving Average (SMA)
- 14-period Relative Strength Index (RSI)
2. Entry Signals
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Buy ("Rise") Signal:
- The 5-period SMA crosses above the 20-period SMA.
- The RSI is above 50.
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Sell ("Fall") Signal:
- The 5-period SMA crosses below the 20-period SMA.
- The RSI is below 50.
3. Exit Signals
- Expiration: Set a fixed expiration time (e.g., 5 minutes) that matches your trading timeframe.
- Stop-Loss: If applicable, set a stop-loss to limit potential losses.
4. Risk Management
- Position Sizing: Risk only 1-2% of your account per trade. For a $10 account, this means risking $0.10 to $0.20 per trade.
- Number of Trades: Limit the number of trades per day to avoid overtrading.
Steps to Implement the Strategy
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Identify the Trend:
- Open a 5-minute chart of the asset you want to trade.
- Apply the 5-period and 20-period SMAs.
- Apply the 14-period RSI.
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Look for Crossovers:
- Monitor the moving averages for crossover signals.
- Confirm the crossover with the RSI indicator.
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Place a Trade:
- Buy ("Rise") Trade: When the 5-period SMA crosses above the 20-period SMA and the RSI is above 50.
- Sell ("Fall") Trade: When the 5-period SMA crosses below the 20-period SMA and the RSI is below 50.
- Set the trade amount to $0.10 to $0.20.
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Set Expiration:
- Choose a 5-minute expiration for the trade to match the timeframe of your analysis.
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Monitor and Exit:
- Allow the trade to expire naturally.
- Monitor the trade and be ready to intervene if necessary (e.g., closing the trade early if it moves significantly against you).
Example Trade
Buy ("Rise") Trade
- Account Size: $10
- Risk Per Trade: $0.10 (1% of account)
- Trade Signal: 5-period SMA crosses above the 20-period SMA, RSI is at 55
- Trade Execution: Place a "Rise" trade with $0.10
- Expiration: 5 minutes
Sell ("Fall") Trade
- Account Size: $10
- Risk Per Trade: $0.10 (1% of account)
- Trade Signal: 5-period SMA crosses below the 20-period SMA, RSI is at 45
- Trade Execution: Place a "Fall" trade with $0.10
- Expiration: 5 minutes
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