How to buy the monthly MACD bar line enlargement + weekly RSI oversold rebound + daily line limit breaking through the previous high?

This crypto trading strategy combines monthly MACD expansion, weekly RSI rebound from oversold, and daily breakout above prior high for high-probability bullish entries.

Jul 30, 2025 at 01:36 pm

Understanding the Trading Strategy Components

The strategy mentioned in the title combines three technical indicators across different timeframes: the monthly MACD bar line enlargement, weekly RSI oversold rebound, and daily price breaking through the previous high. Each of these components plays a critical role in identifying high-probability bullish reversal setups in the cryptocurrency market. The MACD (Moving Average Convergence Divergence) on the monthly chart helps detect long-term momentum shifts. When the MACD histogram bars begin to expand, it signals that bullish momentum is accelerating after a consolidation or downtrend phase. This expansion is visually confirmed when the bars grow taller above the zero line or transition from shrinking to growing while below zero, indicating a potential reversal.

The weekly RSI (Relative Strength Index) is used to identify oversold conditions. When the RSI drops below 30 on the weekly timeframe, the asset is considered oversold, suggesting that selling pressure may be exhausted. A rebound from this level, especially accompanied by volume support, increases the likelihood of a sustainable upward move. The final component, the daily candle closing above the previous swing high, acts as a breakout confirmation. This price action suggests that resistance has been overcome and new buyers are entering the market. Combining these three signals increases the reliability of the entry point.

Setting Up the TradingView Chart for Analysis

To effectively monitor this strategy, traders must configure their TradingView chart with the correct indicators and timeframes. Open a new chart and load the cryptocurrency pair of interest, such as BTC/USDT. Add three separate chart panels: one for the monthly, one for the weekly, and one for the daily timeframe. On the monthly chart, apply the MACD indicator with default settings (12, 26, 9). Focus on the histogram — look for a shift from shrinking to expanding bars. This visual cue indicates increasing momentum. Ensure the histogram is clearly visible and consider adjusting the chart style to emphasize the bar size.

On the weekly chart, add the RSI indicator with a period of 14. Set the overbought level at 70 and the oversold level at 30. Monitor for instances where the RSI line dips below 30 and then begins to rise, confirming a rebound. Use horizontal lines to mark the oversold threshold for visual clarity. On the daily chart, enable candlestick patterns and draw a horizontal line at the most recent swing high. This line will serve as the breakout level. Enable price alerts for when the closing price exceeds this level to avoid missing the signal.

Step-by-Step Entry Trigger Checklist

Before placing a buy order, all three conditions must be satisfied simultaneously. Verify the following:

• The monthly MACD histogram bars are visibly enlarging, indicating strengthening bullish momentum.
• The weekly RSI has rebounded from below 30, confirming oversold exhaustion.
• The daily candle has closed above the previous swing high, validating breakout strength.

Use a checklist format to avoid emotional decisions. If any condition is missing, do not enter. For example, if the MACD is expanding and RSI rebounded, but the price hasn’t broken the high, wait for confirmation. Traders can use TradingView’s alert system to set up notifications for each condition. Create an alert for MACD bar expansion by scripting a condition where the current histogram value is greater than the previous one. Set another alert when RSI crosses above 30 after being below it. A third alert can trigger when the daily close exceeds the defined resistance level.

Executing the Buy Order on a Cryptocurrency Exchange

Once all conditions are met, proceed to execute the trade on a supported exchange such as Binance, Bybit, or KuCoin. Log into your account and navigate to the spot or futures trading interface, depending on your strategy. Search for the cryptocurrency pair that triggered the signal. Click on the "Buy" section. Choose "Market Order" for immediate execution or "Limit Order" slightly above the breakout candle’s close to ensure fill during volatility. Enter the desired quantity based on your risk management rules — never risk more than 1-2% of your portfolio on a single trade.

Confirm the order details carefully. Ensure that the trading pair, order type, price, and quantity are correct. After submission, check the order history to confirm execution. Immediately after buying, set a stop-loss order below the recent swing low on the daily chart to limit downside risk. For example, if the breakout occurred at $30,000 and the recent low was $28,500, place the stop-loss at $28,400. This protects against false breakouts.

Monitoring Post-Entry Price Action and Position Management

After entering the trade, continuous monitoring is essential. Return to the TradingView chart and observe how price behaves after the breakout. Look for strong bullish candles and increasing volume on the daily chart, which validate the move. If the price pulls back but holds above the breakout level, it confirms strength. Avoid exiting prematurely based on short-term noise. Use the weekly RSI to ensure it remains above 50, indicating ongoing bullish momentum. If the monthly MACD begins to flatten or contract, it may signal weakening momentum, prompting a review of the position.

Consider using a trailing stop-loss to lock in profits as the price rises. Most exchanges allow setting a trailing stop in the order menu. Define a percentage or price distance — for example, 10% below the highest price reached. This allows the position to run while protecting gains. Do not close the entire position at once unless a clear reversal pattern forms. Partial profit-taking can be done at predefined targets, such as 1.5x or 2x the distance from entry to stop-loss.

Backtesting the Strategy for Historical Accuracy

To assess the reliability of this multi-timeframe strategy, conduct a manual backtest using historical data. Select a cryptocurrency with at least two years of price history, such as Bitcoin or Ethereum. Scroll through the monthly chart and identify past instances where the MACD histogram began expanding after a downtrend. For each occurrence, check the weekly chart to see if RSI was below 30 and subsequently rebounded. Then, examine the daily chart to determine if a breakout above the prior high followed. Record each case where all three conditions aligned and note the price movement over the next 30 to 90 days.

Use a spreadsheet to log entries, exits, and outcomes. Calculate the win rate and average return per trade. This process helps determine whether the strategy performs consistently across market cycles. Adjust the RSI threshold or MACD settings cautiously if needed, but avoid over-optimization. Backtesting builds confidence and highlights potential weaknesses before risking real capital.

Frequently Asked Questions

Q: Can this strategy be applied to altcoins, or is it only suitable for Bitcoin?
Yes, this strategy can be applied to major altcoins such as Ethereum, Binance Coin, or Solana, provided they have sufficient historical data and liquidity. However, altcoins may exhibit higher volatility, so stricter risk management is advised.

Q: What if the weekly RSI rebounds but the monthly MACD hasn’t started expanding yet?

In this case, the signal is incomplete. The absence of monthly MACD bar line enlargement means long-term momentum isn’t confirmed. Wait for the MACD to show expansion before considering entry.

Q: How do I identify the "previous high" on the daily chart accurately?

The previous high is the highest price point before the current upward move. Use TradingView’s "High" marker tool or manually inspect candle wicks. Ensure it’s a clear swing high, not an isolated spike.

Q: Is it necessary to monitor all three timeframes in real time?

While real-time monitoring helps, setting up price and indicator alerts on TradingView allows automated notifications. This reduces the need for constant screen watching while ensuring timely responses.