One of the four major strategies for short-term trading (essential for earning oil)
Those who are skilled in ultra-short-term cryptocurrency trading (typically holding positions for a few minutes to a few hours) have a core need to capture short-term fluctuations, quickly identify turning points, and control risks. Common technical indicators focus on "high sensitivity and timely signals," mainly including the following categories:
1. Core momentum/turning point indicators (quickly grasp buy and sell signals)
- Stochastic Indicator (KDJ): One of the most commonly used indicators for ultra-short-term trading, more sensitive than RSI, can quickly reflect the switching of short-term bullish and bearish forces. Typically, a K-line golden cross with the D-line (golden cross below 20 is more reliable in the oversold zone) serves as a short-term buy signal, while a K-line death cross with the D-line (death cross above 80 is more reliable in the overbought zone) serves as a sell signal, suitable for capturing small fluctuations within a few minutes to half an hour.
- MACD (shortened parameter version): The default parameters (12,26,9) are relatively slow, and for ultra-short-term trading, it is often adjusted to (6,13,5), allowing the golden cross/death cross signals of the fast line (DIF) and the slow line (DEA) to occur more frequently. Key attention is given to the "shortening of MACD histogram" (negative histogram shortening) or "shortening of positive histogram," combined with slight price reversals, to anticipate short-term turning points in advance.
2. Volatility/range indicators (defining short-term trading range)
- Bollinger Bands (BOLL, shortened cycle): Commonly used 15-minute or 30-minute cycles in ultra-short-term trading, and often adjusting parameters to (10,2) (default is 20,2), making the bands narrower and more responsive. When the price touches the lower band (with slightly increased trading volume), the probability of a short-term rebound is high; when it touches the upper band (with decreased trading volume), the probability of a short-term pullback is high, suitable for "selling high and buying low within the range."
- ATR (Average True Range, short cycle): Calculated using 5-minute or 15-minute cycles, the core function is not to determine direction but to quickly set stop-loss/stop-profit levels. Ultra-short-term trading typically sets stop-loss at "1 times ATR" (e.g., below the buying price at 1 times ATR) to avoid being easily stopped out during volatile periods, while setting take-profit at "1-1.5 times ATR" to ensure quick profit-taking.
