How to increase the position of the monthly KD golden cross + weekly positive line reverse + daily line standing on the 5-day line?

This crypto strategy combines monthly KD golden cross, weekly positive reversal, and daily 5-day SMA support for high-probability bullish entries across timeframes.

Jul 30, 2025 at 10:28 am

Understanding the Technical Indicators in the Strategy

The strategy mentioned in the title combines three critical technical indicators: the monthly KD golden cross, the weekly positive line reversal, and the daily price standing on the 5-day moving average. Each of these components plays a specific role in identifying high-probability bullish setups in the cryptocurrency market. The KD indicator, also known as the Stochastic Oscillator, measures momentum by comparing a cryptocurrency’s closing price to its price range over a specific period. A golden cross on the monthly chart occurs when the %K line crosses above the %D line in the oversold region, typically below 20, signaling a potential long-term reversal.

The weekly positive line reversal refers to a shift from negative momentum to positive momentum on the weekly KD chart. This often happens when the %K line moves from below %D to crossing above it after a prolonged downtrend. This shift suggests that weekly sentiment is turning bullish. On the daily chart, the requirement that the price stands on the 5-day moving average indicates short-term strength and support. This alignment across multiple timeframes—monthly, weekly, and daily—creates a confluence of bullish signals that traders can use to increase their position with higher confidence.

Setting Up the Trading Platform for Multi-Timeframe Analysis

To effectively monitor and act on this strategy, traders must configure their trading platforms to display all three timeframes simultaneously. Platforms like TradingView, Binance Futures, or Bybit allow users to open multiple chart windows or use a multi-chart layout. Begin by opening three separate chart panels: one for the monthly, one for the weekly, and one for the daily timeframe. Ensure that the KD indicator is applied to each chart with standard settings (typically 9,3,3). Adjust the layout so all three charts are visible at once.

Next, set up price alerts for key events. For the monthly KD golden cross, create an alert that triggers when the %K line crosses above the %D line below the 20 level. For the weekly positive line reversal, set an alert when the weekly %K crosses above %D after both lines have been in the oversold zone. On the daily chart, configure an alert when the closing price remains above the 5-day simple moving average (SMA) for two consecutive candles. These alerts ensure you don’t miss critical entry conditions.

Verifying the Monthly KD Golden Cross

Before increasing any position, confirm the validity of the monthly KD golden cross. This is a rare event and requires careful verification. Navigate to the monthly chart and observe the KD indicator. The cross must occur when both %K and %D are below 20, indicating the asset was deeply oversold. A cross above 20 is less reliable. Ensure the cross is confirmed by a full candle closing, not just an intra-month spike.

Check the volume profile on the monthly chart. A genuine reversal often coincides with rising volume, suggesting institutional or large-scale participation. Also, examine the broader market context. If the overall cryptocurrency market is in a bear market, a single golden cross may not be sufficient. However, if Bitcoin or Ethereum shows similar signals, the probability of a sustained rally increases. Only proceed if the monthly KD golden cross is supported by volume and market alignment.

Confirming the Weekly Positive Line Reversal

After the monthly signal is confirmed, shift focus to the weekly KD chart. Look for the %K line to have been below %D for several weeks, indicating sustained bearish momentum. The reversal occurs when %K crosses above %D, ideally from below 30. This suggests that short-term selling pressure is weakening and buyers are stepping in.

Use the following checklist to validate the reversal:

• The weekly close must be above the previous week’s high.
• The %K line should not re-cross below %D within the next two weeks.
• The RSI on the weekly chart should be rising from below 50.
• There should be no major resistance levels immediately above the current price.

If all these conditions are met, the weekly positive line reversal adds strong confirmation to the monthly signal. This multi-week momentum shift increases the reliability of the setup.

Validating Daily 5-Day Line Support

The final and most immediate condition is the daily price action relative to the 5-day SMA. After the higher timeframe signals are in place, monitor the daily chart closely. The price must close above the 5-day moving average for at least two consecutive days. This shows that short-term traders are supporting the price and that bullish momentum is building.

Additionally, observe the following:

• The 5-day SMA should be sloping upward.
• Daily volume should be above the 20-day average.
• There should be no long upper wicks indicating rejection at resistance.
• The daily KD should not be in overbought territory (above 80) to avoid exhaustion.

When the price pulls back to test the 5-day SMA and bounces, it confirms the line as dynamic support. This is an ideal moment to increase position size, as the risk of a false breakout is reduced.

Executing the Position Increase

Once all three conditions are satisfied, initiate the position increase using a tiered approach:

• Allocate 40% of the intended increase when the monthly KD golden cross is confirmed.
• Add another 40% when the weekly positive line reversal is validated.
• Deploy the final 20% when the daily price holds above the 5-day SMA with strong volume.

Use limit orders slightly below the current market price to avoid slippage. Set stop-loss orders below the recent monthly low or below the 5-day SMA if volatility increases. Avoid using leverage until the daily trend is firmly established. Reassess the position weekly to ensure all indicators remain aligned.

Frequently Asked Questions

What if the monthly KD golden cross occurs but the weekly KD doesn’t show a reversal?

Wait for the weekly confirmation. A monthly signal without weekly support may result in a false breakout. Patience is essential. Monitor the weekly chart for the %K to rise toward %D. Entry should be delayed until alignment occurs.

Can this strategy be applied to altcoins?

Yes, but only to altcoins with sufficient trading volume and historical data. Low-cap coins may show erratic KD signals due to manipulation. Focus on major altcoins like Solana, Cardano, or Polkadot for more reliable readings.

How do I adjust the KD settings for different cryptocurrencies?

The standard 9,3,3 setting works for most assets. However, for highly volatile coins, consider using a longer period like 14,3,3 to reduce noise. Backtest the settings on historical data to ensure consistency.

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

Yes. The power of this strategy lies in the confluence of multiple timeframes. Acting on a single signal increases risk. Missing a trade is better than entering prematurely and facing a sharp reversal.