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NEO Cryptocurrency Strategy – Scalping with BB and AO
Today we will review a simple scalping strategy for trading NEO coin. The NEO cryptocurrency strategy can help you accumulate small profits that can add in the long run. You can anticipate to gain consistent profits by learning this simple scalping technique that uses technical indicators.
Our team at Trading Strategy Guides is working hard to put together the most comprehensive PDF guide to different cryptocurrency strategy. Previously we have covered Status SNT Cryptocurrency Strategy, which is an innovative digital currency that offers an open source messaging platform and secondly is a mobile browser that acts as a gateway to all Ethereum applications.
Scalpers can profit enormously from the volatility presented in the cryptocurrency market.
We recommend only using the NEO trading strategy on the 5 and 15-minute time frame for best results. The same trading rules can also be applied to any market that has a reasonably high volatility that can offer you a decent profit margin.
Having the right technical tools is crucial, especially when scalping the cryptocurrency market which is extremely volatile. This is an extremely moneymaking scalping strategy that uses a combination of two very precise scalping indicators
The first technical indicator used for trading NEO coin is the Bollinge Bands indicator with which we can measure the market volatility and the strength of the trend. We’re also going to take advantage of the Awesome Oscillator indicator with which we’re going to gauge the NEO price momentum.
Your NEO price chart should look similar to the one below:
Moving forward, we’re going to explain what is cryptocurrency NEO, and last but not least we’ll share the key trading rules of this super scalping strategy that has the power to generate multiple trades per day.
What is Cryptocurrency NEO?
NEO is the first decentralized open source cryptocurrency launched in China in 2014 and rebranded in 2017. Apart from the NEO coins, this blockchain technology also has one crypto token called Gas.
Cryptocurrency NEO is considered to be the Ethereum of China and even the Ethereum killer.
NEO platform focuses on areas such as digital asset transfer, smart contracts and digital identity verification.
At the writing of this NEO review, the total market cap of this new blockchain technology is more than $3.3 billion and it’s currently ranking as the 12th most valued cryptocurrency in the world. A lot of institutional money have been pouring into this cryptocurreny which is the reason why it’s worth to trade NEO coins.
Now, before will outline a method on how to buy cryptocurrency NEO, we always recommend taking a piece of paper and a pen and note down the rules of the NEO cryptocurrency strategy.
For this demonstration, we’re going to look at the buy side.
NEO Trading Strategy
When scalping with the NEO trading strategy you need to have discipline and focus. Scalping can be very rewarding, but you need to follow some quantifiable trading rules to keep you on the right track.
The advantage of scalp trading cryptocurrencies like Bitcoin, Ethereum and NEO is firstly, less exposure to risk and secondly, it gives you more trading opportunities.
One of the most appealing ways to scalp the cryptocurrency market is by using an oscillator. However, since there are so many oscillator indicators out there, choosing the right one can be a hard task.
Like with all our scalping strategies we’re going to give you first the trading rules by going through an actual live trade example.
Step #1: Wait until the Bollinger Bands narrows and the NEO price contracts. The upper and lower band needs to be horizontal
When the Bollinger Bands are squeezing, usually the volatility is also very low. As stated by John Bollinger, the creator of the BB indicator, when the volatility is contracting this usually is followed by periods of high volatility and strong price movements.
The bandwidth of the Bollinger Band indicator is showing a direct measure of market volatility.
Note: The Bollinger Bands squeeze doesn’t give us any directional bias. It only provides a reading of the market volatility.
See the NEO chart below and notice how the Bollinger bands narrows and move almost horizontally.
Once the Bollinger Bands narrows we know that’s the beginning of a new trend.
The Bollinger Band squeeze is just the first rule of the NEO cryptocurrency strategy. Next, we’re going to outline the second rule:
Step #2: NEO price needs to break and close above the Upper Band.
In terms of identifying when a bullish trend is about to start, we look for the NEO price to break and close above the Upper Band. If the NEO price accelerates outside of the upper Bollinger band it indicates that a strong move to the upside should follow.
In this case the breakout foreshadows a big move in NEO price.
The breakout also signals that we should expect volatility expansion and trend development.
See the NEO coin technical analysis chart below:
Next, we’re going to outline what key condition needs to be satisfied when trading NEO coin and how to buy cryptocurrency NEO.
Step #3: How to Buy NEO coin: Awesome Oscillator needs to be above the zero line at least 10 candles going back
Before buying cryptocurrency NEO we need to check if the Awesome Oscillator indicator is above the zero line at least 10 candles going back. When the Awesome Oscillator is above the zero line it indicates bullish momentum.
You need to have an edge when trading NEO coin which is the reason why we use a second indicator to confirm that real institutional buying is behind this breakout. As a general rule, you should use a secondary indicator to confirm the readings of the first technical indicator.
If this condition is also satisfied, you can buy cryptocurrency NEO at the closing price after the breakout.
A common misconception that many traders have when using the Bollinger Bands indicator is that they tend to sell when the NEO price touches the upper band and they tend to buy when NEO price touches the lower band.
This brings us to the next important thing that we need to establish for our day trading cryptocurrency strategy, which is where to place your protective stop loss.
Step #4: Place Protective Stop Loss below the lower Bollinger Band
To stay on the safe side, using a stop loss is vital. The initial place to hide your protective stop loss is below the lower Bollinger Band.
Placing the stop loss below the Bollinger band is a basic chart analysis technique that can offer you a great risk to reward ratio. Because of the Bollinger band squeeze effect your risk per trade is always going to be much smaller in comparison to the potential profit.
Last but not least, we also need to define where we take profits when trading NEO coin.
Step #5: Take Profit when the Awesome Oscillator crosses below the 0 line
The Awesome Oscillator is a great technical tool to gauge the market momentum and the buying and selling pressure that goes behind the scene. And since the momentum precedes price, it’s wise to exit our positions once we see clear indication that the momentum is shifting to the other side of the market.
In this regard, we take profit once the Awesome Oscillator crosses below the 0 line which is a signal for bearish momentum.
Note** the above was an example of a BUY trade using the best NEO cryptocurrency 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 – NEO Cryptocurrency Strategy
Using the NEO trading strategy will let you double-check your trade signals. Combining a momentum oscillator with the Bollinger Bands indicator can help you anticipate those quick bursts in price that every trader wants to catch.
Since trading is a personal journey it’s up to you to find if this strategy fits your personality and if you can accomplish your trading goals. The key point is that you can incorporate the Bollinger Bands to gauge volatility in your favorite market. Here is another strategy on how to apply technical analysis step by step.
If you want to invest in NEO and add a new coin to your crypto portfolio you can safely use this scalping strategy to buy NEO.
Thank you for reading!
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