Recap Unit 1

Strategy Recap.
Application of the techniques.
www.nictrades.com @NicTrades
On today's Recap...
We will practice and apply the tools learned on Unit 1 (Moving averages, Trend lines, CCI
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oscillator and Heikin Ashi) as our trend trading strategy. We’ll do examples using trading-
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view’s chart but if you use other platforms like MT4 or Pro-Realtime, you will find all
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these tools as well.
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In order to swing trade we need to develop some skills like; being able to draw trendli-
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nes and know how to use moving averages, CCI oscillator and Heikin Ashi candles to re-
cognize trends, supports and resistances.
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So... Let’s recap how to add this tools to our chart!
Strategy Recap
Application of the techniques. Setting Up Moving Averages.
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Step 1. On the top menu of your chart, click on “Indicators”.
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Step 3. Add an exponential moving average by typing “EMA” on the
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search box and right clicking once on the ticket to add it to our chart.
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Step 4. Now, below the market’s ticket,
you should be able to see 3 moving ave-
rages added to your chart but because
we use 3 different periods for each one
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(200 and 50 for MA and 20 for EMA) we
Step 2. Next, search for “Moving Average” by typing “MA” on need to set up each moving average first
the search box that pops out. We use two simple moving ave- before using them. To do this click in the
rages and one exponential so click twice on the ticket to add “settings” icon on each indicator and set
two of them. each moving average as the following...
Strategy Recap
Step 5. Right click on settings and under inputs Step 6. Go back to the chart and click on the settings
change the length to 200 and under style change the icon of the second “MA” indicator and under inputs
default color to green. change its length to 50 and its color to blue.
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200 Moving Average Set up (MA) 50 Moving Average Set up (MA)
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Sep 7. Finally click on EMA’s settings and under inputs
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rchange the length to 20 and its color to pink.
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20 Moving Average Set up (EMA)
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Strategy Recap
Pine Editor Code For Having The 3 Ma's that Only
Take Up One Indicator Spot On Tradingview.
There is an alternative way to set this three moving averages on your chart by using a script code
for Tradingview’s pine editor. This will be useful if you are using a free version of Tradingview
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and want to release some space in order to have other indicators like RSI, MACD and CCI added
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to your chart. Find the code on the facebook group by following this steps:
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Step 1. Click “See more” on “What’s On the Step 2. Then click on “LINK TO WELCOME ABOARD
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Radar” .
PACKAGE” and click on the attached pdf.
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Ps: Don’t forget to watch Lashawn

Turner’s videos on the group for more
Tradingview updates!
Strategy Recap
Step 3. Go to page 8 and click on the link Step 5. Go to page 3 and copy this script.
“Setting up your Tranding View”:
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https://www.facebook.com/groups/nic-
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trades/341509722997225/.
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Step 4. Open the pdf file “Setting Up

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study("20/50/200 MAs", overlay=true)

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Tradingview like Nicola’s”. ema20 = ema(close, 20)

plot(ema20, color=red, linewidth=2)
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sma50 = sma(close, 50)
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plot(sma50, color=blue, linewidth=2)

sma200 = sma(close, 200)
plot(sma200, color=green, linewidth=2)
Strategy Recap
Step 6. Return to tradingview. and on the bottom of the Step 7. Click on ”Blank Indicator Script” . Step 8. Erase content and...
chart click on “Pine Editor” .
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44) 46)
45)
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Step 9. Paste the script. Step 10. Then click on “Save” and to display Your chart should now look like this.
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the moving averages on the chart click on
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“Add to chart” .
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Strategy Recap
Application of the techniques. Recap of Moving Average Strategy.
When using moving averages on our

chart we’re looking for trend moves
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But when we are below the 200 and to enter a trade as close as its be-
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MA we are expecting to get a
ginning and ride the trend until the
sell signal because we are still in
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a dowtrend. So if you are buying trend ends.
countertrend, your first target
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should always be the 200 MA. Our goal, when we are trading is to
ictr a d e enter our trade as close as possible to
the 200 MA as we can and, when we
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are in an uptrend, to buy pullbacks to
We can be buyers
the 20 MA.
below the 200 MA
But because using moving averages
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(when 20 crosses
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above 50) and by solely is not enough to get good en-

doing this we’d be
tranding counter- tries we will need some extra tools to
trend. help us measure them better.
Strategy Recap
Application of the techniques. Setting Up CCi Oscillator.
If you are not using tradingview you can always use the CCI indicator available in your platform of preference by clicking
on indicators’s icon (1) then, from the dropdown list select “Comomodity Channel Index” (2). Remember to set up the indi-
cator to the 14 moving average by clicking on CCI fomat (3) and setting 14 on “Length” tab (4).
1) 3)
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4)
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2)
.
If you are using tradingview, you can use “FX Sniper: T3-CCI”. wich is a variation of the CCI. Follow this steps to add it:
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Step 1. Click on indicators’s icon top bar menu (5) Step 3. And to set up the indicator to the 14 moving average
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click on T3-CCI fomat (8) and set the CCI_Period to 14 (9).

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8)
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Step 2. From the dropdown list search (6)

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9)
and select FX Smiper: T3-CCI (7)
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6)
7)
Strategy Recap
Application of the techniques. Recap of CCI Oscillator Strategy.
We use the CCI oscillator to know how far away the price is from the 14 moving average.
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w w. n ictr a d e ...And when is below it
the price will turn red.
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When price is above the 14
MA the CCI will turn green...
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When the price crosses the 14 MA, CCI will cross its center line. This crossing is our trigger to buy or sell. We are loo-
king to buy when cci crosses from the red zone to the green zone and we sell when it crosses from red to green.
Strategy Recap
Setting Up Heikin-Ashi
Candlesticks.
Heikin Ashi candlesticks work like a “Moving Average” of candlesticks that help Step 2. Because Tradingview does not support by default
us to smooth the price action of a market. We will often switch between “regular” Heikin Ashi candles, you will need to custom their color set-
tings first. To change their default colors (black and white)
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and Heikin Ashi candles because sometimes Heikin Ashi could experience a lag
in the price action displayed when the market moves too fast, but it’s precisely you can double (right) click over your Heikin Ashi candles on
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this intrinsic delay that often prevents us from being deceived by false reversal your chart and then under “Style” (3) set the colors for bullish
signals and trade setups. (green) (4) and bearish candles (red) (5).
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You should be able to switch between regular to Heikin Ashi candlesticks on any
.
trading platform. To turn on Heikin Ahi candlesticks on tradingview you need to:
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5) 3)
Step 1. Click on
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4)
the candle icon
from the tool bar 1)
(1) then click on
“Heikin Ashi” (2).
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Now that we have all set up

2) let’s do some examples...
Strategy Recap Example Nº 1.
How Does a Sell Signal Looks?
When selling (shorting) on a In this daily (time frame) chart of
1) downtrend, put your stop above
Euro/Dollar from November of
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Stop loss the closing price of the candle
that broke the MA resistance. 2016, we went below the 200 MA
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Trigger to sell on a long position. (1) and each time it bounced went
See how even when we sell at the
2) rejected from the moving average
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low of the day we still sell at a
better price than the following (sell signals) ().
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days.
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In a downtrend our strategy is to sell See how after a rally of green cand-
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pullbacks to the moving averages. les that turned red, when we con-
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nected the lows using a trend line,
price finally broke down the trend
line and our CCI crossed the zero
line and turned red? Well, this price
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Click on the Trend Line tool on action is how a sell signal looks in
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the vertical menu to draw trend our trading system.
lines on your chart.
Before Selling, Wait For The CCI To Get .
Sometimes we don’t get sell signals on our CCI but in our Heikin Ashi candles, although some people would not wait
for the CCI signal to sell , in our strategy if you dont get a new low the price is considered to be consolidating and you
should “sit on your hands”* and wait for the consolidation to play out.
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Price went above the 50 ma (our back stop), then we got a bullish
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cross that made the price to come back and retested our MA, then
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found support and continued higher up to the 200 MA.
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We went below the 20 ma here but
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we didn’t get a CCI cross; instead we
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got a couple of inside days that gave Stop Loss
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us time to look for the candle that
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turned red and went lower.
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In a countertrend, before buying, we drawn a trendline and wait to see if the price breaks out above
it. If it does it, our entry will be just above the 20 EMA, our target to return to the 200 MA and our stop
loss will be below the candle that crosses the 20 MA.
“Sit on your hands” means waiting, with no open position, for a

market (that is consolidating price action) to define its trend.
!
Strategy Recap
Example Nº 3.
How To Trade In A Counter Trend?
We are trading counter trend If we buy when price is below the 200/50/20 moving average and this means that we are assuming
that the current trend will reverse which create more chances to get a false signal on the way to do it, so to avoid critical losses of
mental capital and big frustration, it’s recommended to place a stop always when you’re trading counter trend and take out all of
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your position when your stop gets triggered.
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On the other hand, when trading within a trend with the moving averages of our side there you can take half of your position out
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when your stop gets triggered and wait for the price to come back and bottom or to see if it finds support.
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If we were expecting a bullish reversal,
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we would’ve waited until the price
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found it’s support above the 200 MA.

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Althought some traders would

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buy the break of the 200 MA,

we can wait for a retest of the
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When we are in counter trend we buy 20 EMA to time our entry in a
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crosses of the moving averages. better way.
Following Euro/US Dollar example, here we have a correction (counter trend) below the 200 MA where price came back below the 50 MA and
found support. Then we got a bullish cross (20 EMA above the 50 MA) to buy it again with a target to the 200 MA and stop below the candle
that broke above the 20 EMA.
Strategy Recap
Example Nº4.
Buying Pullbacks Within an Uptrend.
We can add to a long position on pullbacks to the 20 EMA after price gets above the 200 MA. For example;
when you get a bullish cross like this one (1) you get a first entry to get long and then you next entry is this
one (2) where you can add to your long position using a stop loss below the last swing low.
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We ride and uptrend as
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long as price keeps
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above the 20 EMA.
Wait for the candle to
cross the 20 EMA before
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taking the next entry.
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Is quite common to get small pullbacks that don't come back to the 20 EMA and this happens a lot in Crypto
specially when trading the 1-hour time frame, so a good way to catch this type of pullback is by applying
the strategy on a lower time frame like in the next example.
Strategy Recap
Application of the techniques. Example Nº 5.
Pullbacks on the 4-hr (240 min) Time Frame.
On an daily uptrend if we go back to a 4-hr time frame, we would see more clear pullbacks and get more en-
tries than in a daily chart but it Is quite usual that within an uptrend, at the point when Heikin Ashi turns red
and price holds above the 20 EMA for the CCI to not cross, but to touch and hold above the center line.
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Sometimes like in this example the CCI
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will narrowly touch the center line
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making this signal a valid entry if the
price comes back to the 20 EMA and go
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higher again.
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Have in mind that the time frame that you trade is determined by how much time you got to trade.
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For example; if you were a stock trader or an investor with a full time job that looks charts once per
day it’s recommended for you to trade the daily time frames.
If you work/study part time or have more time on a day to trade and check your computer, you can
trade the 4-hr time frame.
Strategy Recap
Example Nº 6.
Reversal Signals in an Uptrend.
The first warning of a reversal signal to come, will be; when
a price crosses below the 20 ema and then comes back to
the 50 MA but as long as the price holds the 50 MA, we
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should be expecting a potential next buy signal.
1)
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In this example on an hourly chart of Euro/US Dollar, after
price crossed below the 50 MA (1), we connected the highs
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with a trend line and waited for either; a wave higher
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above the trend line (bullish view) or a retest to the 200 MA
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(bearish view).
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RESISTANCES
Golden rule:
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If you are in an uptrend

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your first resistance is the

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prior high and If price

2)
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doesn’t hold above the 20

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RESISTANC
ES
3) EMA, be prepared for a
potential trend reversal.
Whenever we get a bearish cross of our
moving averages (20 EMA below the 50
MA) (2), our target will be the 200 MA (3).
15 Minutes Pullback Entry.
In a volatile market like Bitcoin very few times price will come back to the center line
and touch the 20 EMA. Here is an example of it: let’s say you bougth some here (1) and
you want to add more to your position here (2) but the price doesn’t touch the 20 EMA
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and keeps trading higher; whenever this happens you will need to go down to a 15
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min chart and try to get a clear entry (4).
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2)
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4-hr chart pullbacks
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1)
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3)15 min chart pullbacks
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In crypto, price action moves so fast that you get very few entries on an hourly time frame, this means
that we would usually go down to a 15 min time frame to catch pullbacks near the 20 EMA.
Strategy Recap
Example Nº 8.
Pullbacks and Reversals on a 15 min Chat
A common bad habit that traders have is to go

4-hr chart of Bitcoin/USD down to lower time frames to chase a break out
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Uptrend with no clear on the price that a bigger time frame still hasn’t
pullbacks to the 20 EMA. confirmed.
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It would be “ok” to look down on a 15 min chart
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the 50 MA, and 50 MA above the 200 MA), be-
cause you are waiting to get an early signal of a
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major correction.
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Memes to remember...
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If you‛re
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trying to im-
This is a sell signal with a press me,
This is a reversal signal,
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target around the 200 you have

15-min chart of Bitcoin/USD cause the price dropped
MA. failed
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It's not the

Same uptrend with clear below the 50 MA and then number of
went back and found a re-
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pullbacks to the 20 EMA. trades, sir, it's
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where you place

sistance on the 20 EMA. the sto...
You have
Trading failed.
System
U npro
fit a b l e
Trade r
By THE Daleks.
End of le sso n .

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Strategy Recap.

Application of the techniques.

Ps: Don’t forget to watch Lashawn

Step 4. Open the pdf file “Setting Up

study("20/50/200 MAs", overlay=true)

Tradingview like Nicola’s”. ema20 = ema(close, 20)

sma50 = sma(close, 50)

plot(sma50, color=blue, linewidth=2)

When using moving averages on our

above 50) and by solely is not enough to get good en-

click on T3-CCI fomat (8) and set the CCI_Period to 14 (9).

Step 2. From the dropdown list search (6)

Now that we have all set up

“Sit on your hands” means waiting, with no open position, for a

found it’s support above the 200 MA.

Althought some traders would

buy the break of the 200 MA,

When we are in counter trend we buy 20 EMA to time our entry in a

crosses of the moving averages. better way.

If you are in an uptrend

your first resistance is the

prior high and If price

doesn’t hold above the 20

A common bad habit that traders have is to go

target around the 200 you have

It's not the

where you place

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