How to use technical indicators for an effective trade in cryptocurrencies **
The world of cryptocurrencies has exploded in recent years, the prices for the decline of a decrease and the decrease in the hat. As a dealer, it may be overwhelming to navigate this fast market without knowing how he can make good decisions. An important tool that can help you use the power of technical indicators is specific commercial strategies for cryptocurrency. In this article, we will deal with the world of technical indicators and examine how you can use it for an effective exchange of cryptocurrencies.
What are the technical indicators?
Technical indicators are mathematical calculations used to analyze price movements and predictions on future prices. They are based on historical data such as price levels, previous trends and models and can be used to identify potential purchase or sale options. There are many types of technical indicators, but we will focus on the most common trade in the cryptocurrency trade.
Why use technical indicators in the cryptocurrency trade?
Cryptocurrencies have unique features that make them particularly suitable for the analysis of technical indicators. For example:
* High volatility
: The prices of cryptocurrencies can fluctuate wildly, which facilitates the identification of short-term trends and models.
* Limited data points
: compared to other financial markets, the cryptocurrency trade has a relatively low number of data points accessible to the public which can make the analysis of price movements more difficult.
* Complexity : Cryptocurrencies contain complex technology and regulatory environments that can influence market dynamics.
popular technical indicators for trading of cryptocurrencies
Here are some popular technical indicators used in cryptocurrency trading:
- Mobile average values (MA) : The sliding average is a simple indicator that uses previous prices to calculate an average price level. It is often used to identify trends and epidemics.
- Relative resistance index (RSI) : RSI measures the size of the last price changes to determine excessive or oversized conditions. It is often used in the trading of cryptocurrencies to measure the mood of the market.
- Bollinger Ligaments : Bollinger ligaments are an indicator based on volatility which uses two standard deviations as a strip width. They are often used to identify the reversions and epidemics of trends.
- Stochastic oscillator : the stochastic oscillator measures the relationship between the price and the relative force and gives an overview of the conditions of over -rachat or occurrence.
How to use technical indicators for an effective cryptocurrency exchange
To effectively use technical indicators in trading of cryptocurrencies:
- Select a renowned library of indicators : Find and choose a reliable indicator library that offers high -quality diagrams and technical analysis tools.
- Configure warning messages and notifications : Configure warnings based on indicator signals such as trend outputs or reversions.
- Use technical indicators in conjunction with other trading strategies : Combine technical indicators with basic analyzes, news and feelings to create a complete trading plan.
- Practice and refine your skills : Test and refine your commercial strategy using historical data and real -time market conditions.
Sample strategy: Use mobile average values
Here is an example of how you can use mobile average values in trading of cryptocurrencies:
- Select the indicator: Use a popular indicator of the sliding average (MA) such as the MA of 50 periods or the MA of 200 periods.
- ** Configure the diagram: Draw the indicator in your diagram and define a threshold to identify epidemics above or below the price level.
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