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Dash Cryptocurrency Trading Strategy – Spike and Ledge Pattern
The Dash cryptocurrency trading strategy is an eloquent method and a very effective trading technique that incorporates a reversal chart pattern. Professional trader, Linda Raschke popularized the Spike and Ledge reversal pattern. This chart pattern can reward us with big profits instantly.
Our team at Trading Strategy Guides is working hard to put together the most comprehensive PDF guide to different cryptocurrency strategies. Previously, we covered the least understood coins the Ethereum Classic strategy, also known as the little brother of the Ethereum.
Dash coin is another cryptocurrency that offers a high level of privacy. However, despite falling behind the world’s biggest privacy coin Monero, privacy coin Dash has significant potential.
This reversal strategy will help you identify a change in behavior in the Dash cryptocurrency price, and it will make it possible for you to ride the trend right from the beginning of the move. You can also trade with the fractal trading strategy.
Moving forward, we’re going to discuss what is privacy coin Dash, and how to buy Dash with our cryptocurrency strategy.
What is Privacy Coin Dash?
In this section, we will be going over the essential features of privacy coin Dash.
Dash coin formerly known as the Darkcoin is a digital currency that it’s based on the Bitcoin code. Privacy coin Dash is one of the oldest privacy cryptocurrency that was launched back in January 2014, then in March 2015 was rebranded as the Dash coin which means digital cash.
Cryptocurrency Dash is a blockchain platform that focuses on features like anonymity, transaction speed, and decentralized governance.
Dash is also compatible with all existing merchant, exchanges and wallet software that’s previously been written for Bitcoin. Transactions that go through the Dash blockchain are confirmed within an average of 1.3 seconds.
At the time we wrote this Dash coin review, this privacy coin is the world’s 14th most valued cryptocurrency with the total market cap of around $2.5 billion.
Now, before we go any further, we always recommend taking a piece of paper and a pen and note down the rules of the Dash cryptocurrency trading strategy. For this demonstration, we’re going to look at the buy side.
Dash Cryptocurrency Trading Strategy
During this section, we’re going to show you how the Spike and Ledge reversal pattern works and how to buy Dash coin. We’re also going to share some trading tips about this reversal strategy so you can take a trade just as the cryptocurrency price is ready to rally.
You have to keep in mind that this reversal chart pattern is extremely volatile that is characterized by violent price movements at the end of a bear market.
That’s what technical traders know as a climax bottom.
For reference, please see the Dash chart below:
From time to time, a cryptocurrency will overextend so much that it bottoms out in a burst of euphoric selling and then pops out into a long, deep rally. The way we profit from this chart pattern is to buy into weakness.
Without further ado, this is the step by step guide to trading Ethereum Classic using the best reversal pattern. You can also read Trend Line Drawing with Fractals.
Step #1: Dash cryptocurrency price needs to show a steady decline that suddenly accelerates to the downside.
Look for the Dash cryptocurrency price to show a steady decline that suddenly spikes downwards. When this reversal pattern is complete, it will resemble a cup with a sharp bottom.
This sharp acceleration usually is the last stage of a bear cryptocurrency market, and it’s followed by a sharp reversal if all the trading criteria for a valid Spike and Ledge are met.
In technical analysis, professional traders also refer to this last spike as being an exhaustion reversal bar that has a high probability of signaling a reversal in the Dash price.
Now, before we can trade successfully, we need to understand that this key climax reversal bar needs to follow specific trading rules.
More specifically, this exhaustion reversal bar needs to follow three rules, which we’re going to highlight next.
Step #2: The exhaustion reversal bar needs to be bigger than the previous bar
Relatively speaking the exhaustion bar, which should be the last bar within the downtrend, needs to be bigger than the previous bars. However, this is not mandatory.
Ideally, the bigger the climax bar is in comparison with the other bars within the bearish trend, the more profitable the reversal pattern becomes.
Let’s move forward, and outline the next essential feature of the Spike and Ledge pattern.
Step #3: The climax bar needs to develop at a key support level or after breaking a key swing low
We can’t stress enough the importance of location in trading.
Many times you’ll notice that a chart pattern will fail, but that’s not because that price pattern has stopped working. It’s often the case that you don’t have the patience for these patterns to develop at the right location.
In order for the Dash cryptocurrency trading strategy to work we need to wait for the exhaustion bar to show up at the right location.
Last trading rule of the climax bar is outlined below:
Step #4: The exhaustion bar develops after several bearish impulsive bars
We need to make sure that the exhaustion bar occurs after several bearish impulsive bars.
These impulsive bearish bars will make the appearance of a bearish trend that will trap many sellers once the tide turns. And that’s how retail traders trade the markets, but to trade profitably, you need to trade against the retail mindset.
Let’s turn our focus on the “ledge” component of the Spike and Ledge pattern.
Step #5: After the downward spike, wait for the market to enter into a short period of consolidation or channeling.
Usually, after the Dash cryptocurrency price had that last spike down the market will take a pause to digest the recent move, and it will start moving into a short period of consolidation or channeling.
Simply, draw two parallel lines to contain this price range.
Now, this is what we refer to as being the “Ledge.”
The Spike and Ledge reversal pattern satisfies all trading conditions outlined above which mean that we can move forward and describe how to buy Dash coin.
Step #6: Buy Dash coin when we break above the Ledge
A long trade is entered on the breakout of the Ledge.
This is an easy entry method, but in order to avoid the short-term noise and the usual false breakouts, we need also to wait for the breakout candle to close above the Ledge.
The next important thing we need to establish for the Dash trading strategy is where to place our protective stop loss.
See below …
Step #7: Place your protective Stop Loss below the Exhaustion bar
The initial protective stop loss is placed on the other side of the reversal pattern.
You hide your stop loss below the exhaustion bar.
Last but not least, we also need to define where we take profits when trading privacy coin Dash.
Step #8: Your Take Profit needs to be two or three times bigger than your risk aka your stop loss.
As a general rule, you do want your take profit to be bigger than your stop loss. This is very important to your long-term survival in this business.
However, you can achieve your profit target goals by using your preferred strategy when it comes to exit the market. We encourage you to experiment different exit strategies and see which one yields better results.
Note** the above was an example of a BUY trade using our favorite Dash strategy. Use the same rules for a SELL trade – but in reverse. In the figure below, you can see an actual SELL trade example.
Conclusion - Dash Cryptocurrency Strategy
Cryptocurrency Dash remains an alternative privacy coin with big potential and our team at TSG has formulated an easy trading strategy that will help you minimize losses and maximize profits.
If you’re interested in owning a cryptocurrency that works like real money, then you probably need to have a closer look at Dash. Dash might be more expensive than the other privacy coins at the current price of $470, but the high price also shows that it has value. We also have training on how to trade with the Gartley Pattern.
If you’re an experienced trader, you can look for more clues into the price to increase the profitability of the Spike and Ledge reversal pattern. Use your imagination and share with us what type of results you get.
Thank you for reading!
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