Created by the Brazilian analyst Odir Aguiar (Didi), it consists of plotting the simple moving averages of 3, 8 and 20 periods on a chart of any interval to observe the reversal points.
The method works better with high volume and good liquidity of assets.
Logic of the algorithm:
- Plots the moving averages in the oscillator chart (short series: SMA3-SMA8, long series: SMA20-SMA8)
- Seeks for the first signal: when the short series crosses the long series
- Seeks for the first confirmation: when the short series crosses over the zero line
- Seeks for the second confirmation: when the long series crossed under the zero line
- Fires if the scenario remains stable and the short line points up and the long line points down
- Pre-configured for the candle of 1h (do not go below 30m)
- For an additional confirmation, combine it with a volume increase indicator.