I view Bitcoin as a long term hodling asset. For that reason I don't even attempt trading bitcoin. However, I like to trade stocks, options, and other crypto assets from time to time. One of the coins I have been trading the most lately has been Litecoin. I keep hearing more and more that it is better to hold Litcoin long term too, rather than trading. So while my initial plan was to trade Ltc, that account turned into a hodling account. I am still not sure how long I will hold them for though.
Among SMAs my favorite ones are 25-SMA and 50-SMA. I even have python scripts that run to make a report of which stocks crosses above or below those SMAs based on daily charts. I like the 50-SMA the most. It seems just trading based on 50-SMA could be advantageous. But I don't know. It is easier to say than actually execute based on strategies however simple they might be. There is always some other information coming in and distracting for one reason or the other.
But just looking only at 50-SMA, one can see the story of prices told over the time. Is 50-SMA really good or is it just an illusion. In any case, I often see this 50-SMA to be a support or resistance. Few days ago price of LTC went below 50-SMA on daily chart, so I figured that's it for now. Won't be selling LTC anytime soon.
The main reason I even started trading LTC is BTC. It seemed to me whenever BTC goes up, LTC and others follow and whenever BTC goes down, LTC and other follow. So I am trading LTC solely based on what I think will happen to BTC. Is it wrong kind of approach? I don't know. That's how I always look at it. I never really considered LTC on its own merits and fundaments.
Just looking at how LTC price broke below 50-SMA, my conclusion was - ok, it will continue going down.
But now I am looking at BTC. It is the first image above. The price is touching the 50-SMA line. Last time, it looks like this line did work as support and sent the price back up. Will it do the same this time? If it does I will have even higher respect for 50-SMA. :)
However, it is turns out to be a disappointment and BTC drop below that line, does it mean it is time for bears to party? I wouldn't be selling BTC anyway. But decisions need to be made about LTC.
I guess I will find out in couple of days if 50-SMA is something worth looking at when evaluating the crypto or stock charts. I might have just revealed my secret trading strategy. Don't tell anyone.
Do you use 50-SMA? What do you think?
P.S. I know nothing. I have zero knowledge or skills about investing and trading.