DOUBLE DEATH CROSS STRATEGY WTI CRUDE STOCK

Apply these SMA Indicators on your chart - 50 - 100 - 200
Step #1: Wait for the 50-day EMA to cross below the 100-day EMA. The two moving averages also need to converge with the price action.
If we get the crossover of the 50-day MA (blue line) and 100-day MA (orange line) at the same time the price is testing those moving averages, that’s the best-case situation for a trade because we can define the risk.
The rule you need to keep in mind is that when the MAs converge with the price you have to get ready for the ride because it is going to get BUMPY!
Step #2: Multiple entry strategy: Sell 1 when we close below 50-day MA and 100-day MA. Sell 2 when we break and close below 200-day MA.
Using multiple entries to improve your average entry price can be the best way to approach the death cross signal. Scaling in to a position is our preferred trading method when looking to capture large price move in a currency pair.
The fact that the price was near the death cross signal, it created a tension in the market that eventually will lead to a sharp move to the downside.
We pull the trigger on the first half of the trade once we close below the 50-day and 100-day moving averages.
If at the moment when the death cross developed we’re already trading slightly below the two moving averages, sell at the market the moment we close below.
The second half of our position is entered once we break and close below the 200-day moving average.
Note* it’s important to remember that the success of the death cross signal relays on this simple trade secret that price and the two moving averages needs to converge.
Keep it simple stupid is not just a simple aphorism, but it’s an old truth that can make the difference between losing and making money trading.
This brings us to the next important thing that we need to establish for our long-term trading strategy, which is where to place our protective stop loss.
Step #3: Hide your protective Stop Loss above 50-day MA and 100-day MA
The most important thing we need to define when trading is our risk. If you want to be a profitable trader you really need a limited risk. This is the type of death cross trades that we want to pull the trigger on.
If the price were to move back above those moving averages, we can safely assume this is yet another false trade signal. In this trade case scenario, we’re risking a little and our reward is potentially much bigger.
So, the best place to hide your protective stop loss is above the 50-day MA and 100-day MA.
Step #4: Two-step process for the take profit strategy: Mark on your chart the high of the candle when the 50-day MA crossed below 200-day EMA. Take profit when this high is broken.
Our take profit strategy might seem a little bit complex, but once we break down the steps you need to follow it will make more sense why we’ve chosen this approach.
The first thing you have to do is to remember what we said in the beginning of the article which is that when the price doesn’t converge with the two MAs this is a death cross false signal.
In our example below, we can observe this type of price action.
Now all you have to do is to mark the high of the candle when the death cross happened and take profit as soon as the high gets broken.
Note** the above was an example of a SELL trade using the death cross strategy. Use the same rules for a BUY trade – but in reverse, in which case we have the golden cross trading strategy.