Trend trading in the cryptocurrency market offers a strategic approach to capturing long-term price movements while filtering out the noise of daily volatility. By identifying and riding sustained market trends, traders can maximize profits through disciplined execution and smart tool usage. Platforms like Cryptohopper empower both novice and experienced traders to automate this process, applying technical indicators to detect, enter, and exit trends efficiently.
In this guide, we’ll walk you through how to build a robust trend-following strategy using MESA and MACD indicators on Cryptohopper, focusing on Cardano (ADA/USDT) as a case study. You’ll learn how to combine signals, optimize settings, and understand key principles that make trend trading effective in volatile crypto markets.
Understanding Cryptocurrency Trend Trading
Trend trading revolves around one core idea: follow the momentum. Instead of trying to predict short-term price fluctuations, trend traders aim to identify directional movement—upward (bullish) or downward (bearish)—and stay in the trade as long as the trend persists.
👉 Discover how automated trading tools can help you catch strong market trends early.
The strategy relies heavily on technical analysis, particularly trend-confirming indicators. The goal is to enter early in an emerging trend and exit only when there’s clear evidence of reversal. This requires patience and emotional discipline—qualities that algorithmic trading platforms enhance by removing human hesitation.
Core Principles of Trend Following
- Ride the trend: Once a trend is confirmed, remain in the position until momentum shows signs of weakening.
- Add positions strategically: Some traders use pyramiding techniques to increase exposure as the trend strengthens.
- Use filters: Combine multiple indicators where one acts as a filter to confirm signals from another, reducing false entries.
Building a Trend Strategy Using MESA and MACD
To create a reliable automated trading bot on Cryptohopper, we’ll integrate two powerful technical indicators:
- MESA (Mesa Adaptive Moving Average) – Acts as a trend filter
- MACD (Moving Average Convergence Divergence) – Generates entry and exit signals
Let’s break down each component and how they work together.
Step 1: Using MESA as a Trend Filter
MESA is a dynamic moving average system that adapts to market cycles. It consists of two lines:
- MAMA (Mesa Adaptive Moving Average)
- FAMA (Fast Adaptive Moving Average)
Buy Signal: When MAMA crosses above FAMA → Green cloud appears
Sell Signal: When MAMA crosses below FAMA → Red cloud appears
Because MESA is a persistent indicator, it continuously sends signals as long as the condition holds. This makes it ideal for filtering out counter-trend trades.
However, using default values may result in overly strict conditions and fewer trading opportunities. To improve responsiveness:
- Set Fast Limit = 0.1
- Set Slow Limit = 0.01
These adjustments allow the indicator to react more quickly to changing market dynamics without sacrificing reliability.
Note: Since MESA serves only as a buy-side filter, we apply it solely to the buy conditions in Cryptohopper. We don’t need it for sell signals in this setup.
Step 2: Adding MACD for Entry and Exit Signals
While MESA confirms the overall trend direction, MACD helps pinpoint optimal timing for entries and exits.
MACD operates based on histogram color changes:
- Green histogram = Buy signal
- Red histogram = Sell signal
Unlike MESA, MACD is non-persistent—it triggers only once per signal activation. This makes it perfect for generating single, actionable trade instructions.
To implement MACD in Cryptohopper:
- Add MACD twice: once for buy signals, once for sell signals
- Ensure both are set to trigger based on histogram color shifts
Additionally, set the minimum number of buy signals to 2 in your bot settings—since both MESA (filter) and MACD (trigger) must agree before opening a position.
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Timeframe Selection: Why 4-Hour Charts Work Best
We use the 4-hour timeframe for this strategy because trend-following indicators perform better over longer intervals. Shorter timeframes (like 5-minute or 15-minute charts) are prone to whipsaws and false signals due to market noise.
A 4-hour candle provides enough data density to reveal meaningful trends while smoothing out short-term volatility. This balance increases the accuracy of both MESA and MACD readings.
Performance Insights: Backtesting Results
When applied to ADA/USDT between April 2018 and February 2024, this combined strategy delivered an impressive 1,023% return—significantly outperforming a simple buy-and-hold approach, which yielded just 79% over the same period.
Assumptions:
- Full allocation to each trade
- Trading fee of 0.1% per transaction
While these results are hypothetical and based on historical data, they illustrate the potential of well-designed automated strategies. However, past performance does not guarantee future success.
Important: This strategy was tested exclusively on ADA/USDT. Results may vary across other cryptocurrencies due to differences in liquidity, volatility, and market structure.
Managing Risk: Stop-Loss vs. Letting the Trend Run
One of the most debated topics in trend trading is whether to use stop-loss orders.
Many trend followers avoid fixed stop-losses because:
- Strong trends often include sharp pullbacks (noise), which can trigger premature exits
- Prematurely closing a position may cause traders to miss extended moves
Instead of relying on stop-loss, consider letting your technical indicators decide when to exit. In this case, MACD naturally closes the trade when momentum shifts.
That said, Cryptohopper requires a take-profit (TP) level. To avoid early closure:
- Set TP very high (e.g., 5000%) so it won’t interfere with normal operation
For stop-loss:
- Disable it completely
- Alternatively, turn off trailing stop if used
This approach ensures your bot stays in winning trades as long as the trend remains intact.
👉 See how advanced risk management tools can protect your capital during market swings.
Frequently Asked Questions (FAQ)
Q: Can I use this strategy with other cryptocurrencies?
A: Yes, but always backtest first. Different assets have varying volatility and liquidity profiles. What works for ADA may not work for SOL or DOGE without adjustments.
Q: Is MESA better than traditional moving averages?
A: MESA adapts faster to price changes than simple or exponential moving averages (SMA/EMA), making it more responsive in trending markets. However, it should be used alongside confirmation tools like MACD.
Q: Why not use stop-loss in trend trading?
A: Fixed stop-loss levels can exit profitable trades too early during normal retracements. Trend traders often prefer indicator-based exits that align with momentum shifts.
Q: How often does this bot place trades?
A: Trade frequency depends on market conditions. On a 4-hour chart, expect trades every few days or weeks—not constantly. Patience is key.
Q: Can I automate this on mobile?
A: Yes, Cryptohopper offers mobile apps for iOS and Android, allowing full control over your bots anytime, anywhere.
Q: Are there risks involved in automated trading?
A: Yes. Market gaps, slippage, exchange outages, or incorrect settings can lead to unexpected outcomes. Always monitor performance and start with small allocations.
Final Thoughts
Cryptocurrency trend trading combines patience, technical insight, and automation to harness sustained price movements. By leveraging tools like Cryptohopper and indicators such as MESA and MACD, you can build systems that identify high-probability opportunities while minimizing emotional interference.
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Success doesn’t come overnight—it requires testing, refining, and adapting to evolving market conditions. With the right mindset and tools, you can confidently navigate the dynamic world of digital asset trading.
Happy trading!