How to buy the monthly KD low position golden cross + weekly line Yang line with large volume + daily line breaking through the 60-day line?

A monthly KD golden cross, confirmed by a high-volume weekly Yang candle and a daily close above the 60-day MA, signals a high-probability long entry.

Jul 29, 2025 at 09:08 pm

Understanding the KD Indicator and the Golden Cross in Monthly Charts

The KD indicator is a momentum oscillator widely used in technical analysis within the cryptocurrency market. It consists of two lines: the %K line (fast line) and the %D line (slow line), both ranging between 0 and 100. When the %K line crosses above the %D line in the oversold region (typically below 20), it forms what is known as a "golden cross". In the context of a monthly chart, this signal carries significant weight due to the longer time frame, indicating a potential long-term reversal from a downtrend to an uptrend.

A monthly KD low position golden cross suggests that after a prolonged bearish phase, buying momentum is starting to dominate. Traders look for this setup to identify early-stage accumulation before a major price move. The reliability of this signal increases when confirmed by volume and other time frame indicators. It's essential to ensure that the cross occurs below the 20 level to qualify as a true low-position signal, reducing false positives.

Confirming the Signal with Weekly Chart: Large Volume Yang Line

After identifying the monthly golden cross, confirmation from the weekly chart strengthens the trade setup. A Yang line refers to a bullish candlestick — one where the closing price is higher than the opening price. When this occurs on the weekly chart with large trading volume, it indicates strong institutional or whale participation, which adds credibility to the reversal signal.

To verify this condition:

• Switch to the weekly time frame on your trading platform (e.g., TradingView, Binance, or Bybit).
• Identify the most recent completed weekly candle.
• Check if the candle is green (Yang) and significantly larger in body than previous candles.
• Compare its volume to the average volume of the past 5–10 weeks. If it's at least 1.5 times higher, it qualifies as large volume.

This combination suggests that after a long consolidation or downtrend, buyers are stepping in decisively. The large volume confirms demand, reducing the likelihood of a fake breakout.

Entry Trigger: Daily Chart Breaks the 60-Day Moving Average

Even with strong monthly and weekly signals, timing the entry is crucial. The daily chart breaking through the 60-day moving average (MA) acts as the final trigger for initiating a position. The 60-day MA represents the average price over the past three months and is a key dynamic resistance level.

To set up this condition:

• Open the daily chart of the cryptocurrency asset.
• Apply the 60-day simple moving average (SMA).
• Wait for the price to close above the 60-day SMA with a full daily candle.
• Ensure the breakout candle has above-average volume to confirm strength.

A close above the 60-day MA indicates that short-term momentum has shifted in favor of bulls. It often marks the transition from a sideways or bearish phase into a new uptrend. This is the point where traders may consider entering a long position.

Step-by-Step Execution on a Trading Platform

To execute this multi-timeframe strategy, follow these steps on a typical crypto exchange:

• Log in to your account on a platform that supports advanced charting and technical indicators (e.g., Binance, Bybit, or KuCoin).
• Select the cryptocurrency pair you're analyzing (e.g., BTC/USDT).
• Navigate to the monthly chart and add the KD indicator (Stochastic Oscillator) with default settings (14,3,3).
• Look for the %K line crossing above the %D line below level 20.
• Switch to the weekly chart, confirm the latest candle is a large green candle with volume significantly above average.
• Move to the daily chart, apply the 60-day SMA, and wait for a daily close above this line.
• Once all conditions are met, place a market or limit buy order.
• Set a stop-loss just below the recent swing low on the daily chart to manage risk.
• Consider using a trailing stop to protect profits as the price rises.

Ensure your exchange allows margin or spot trading depending on your strategy. Enable price alerts for the 60-day MA breakout to avoid missing the entry.

Risk Management and Position Sizing

Even with a high-probability setup, risk must be controlled. Allocate only a portion of your portfolio — for example, 2% to 5% per trade — to limit exposure. The multi-timeframe alignment reduces risk, but crypto markets are volatile and unpredictable.

Use stop-loss orders to define your maximum loss. Place the stop below the recent consolidation zone or the lowest point of the last few weeks on the daily chart. Avoid placing the stop too tight, as normal volatility could trigger premature exits.

Position size should be calculated based on your stop-loss distance. For instance, if you're willing to risk $100 on a trade and your stop is 10% below entry, your position size should not exceed $1,000. This ensures consistent risk management across trades.

Monitoring and Adjusting the Trade

After entering the trade, continuous monitoring is necessary. Watch for bearish reversal patterns on the daily chart, such as shooting stars or dark cloud cover. A drop below the 60-day MA after entry may indicate weakness and warrant partial profit-taking or tightening the stop.

Use volume analysis to assess continuation. If subsequent green candles maintain high volume, the trend is healthy. Declining volume on up days may suggest fading momentum.

Reassess the KD indicator on the weekly chart every few days. If it enters the overbought zone (above 80), be cautious of short-term pullbacks, though this doesn’t necessarily mean exiting if the monthly trend remains bullish.

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Frequently Asked Questions

What if the daily candle only wicks above the 60-day MA but closes below it?

A wick above without a close above does not qualify as a valid breakout. The daily close must be above the 60-day MA to confirm buyer control. Wait for a full candle close above the line before acting.

Can this strategy be applied to altcoins?

Yes, but ensure the altcoin has sufficient trading volume and historical data. Low-liquidity coins may generate false signals due to manipulation or thin order books. Focus on top 50 cryptocurrencies by market cap for better reliability.

How do I set up KD indicators on different time frames simultaneously?

Most platforms like TradingView allow multi-chart layouts. Open three chart windows: one for monthly, one for weekly, and one for daily. Apply the Stochastic Oscillator to each. Use alerts to notify you when the %K crosses %D on the monthly chart.

Is it necessary to wait for all three conditions to align exactly?

Yes. Acting before all conditions are met increases the risk of false signals. The power of this strategy lies in the confluence of monthly, weekly, and daily confirmations. Patience ensures higher-quality entries.