How to use technical indicators to fly in cryptocurrency
Swing Trading is a popular investment strategy where technical indicators and chart model are used to make encryption and sales. Although technical analysis can be used as an independent indicator, it is important to understand how other tools are used, for example B. Cryptocurrency specially specified indicators can be combined to improve their trading.
What are the technical indicators?
Technical indicators are numerical values that indicate the result of various chart models and trends for financial equipment such as cryptocurrencies. They help investors identify potential purchase or sales signals, predict price changes and make reasoned investment decisions. Frequent technical indicators used in the cryptocurrency trade include:
- Average values (MA): Average safety price for a certain period of time.
- Relative Strength Index (RSI): Measure price and change in price and overshoot to determine conditions.
- Bollinger gangs: a volatility-based indicator that represents two average values to be transmitted with extra standard deviation.
- MacD (Sliding Average Conference Differences): Close the difference between two movements to be transplanted, indicating the relationship between purchasing and sales pressure.
How to use technical indicators to fly in cryptocurrency
Follow the following steps to effectively use technical indicators in pregnancy in cryptocurrency:
- Choose cryptocurrency : Choose a specific cryptocurrency that interests you in the shop such as Bitcoin (BTC), Ethereum (ETH) or Litecoin (LTC).
- Set diagram : Create the chart with the following settings:
* Schedule: 1 hour or 4 hour chart
* Candlefoot: Close, Open, High, Low
* Indicators: Select popular indicators for each period and for each detailed level.
- Identify trend patterns : Find the trend lines such as:
* Diagram pattern (eg head and shoulder, reversing head and shoulder)
* Line breaks or differ
* Average over or below
- Define Over Table/Over -Required : Use your indicators to determine when safety is overloaded (over 80) or oversized (less than 20).
- Set STOP-Without and OTA-WINNING levels : Set STOP loss and profit-based levels based on the risk management strategy.
- Adjust the location size : Adjust your location to take into account potential prices.
Example: Use RSI as a flying trade indicator
Relative strength index (RSI) is a popular technical indicator used to measure oversized or oversized conditions in cryptocurrency such as BTC and ETH. Here’s an example:
And schedule RSI (14) | RSI (28) |
And — | — | — |
And BTC (1 -Hour diagram) 30 | 70 |
And BTC (4 hour diagram) 40 | 60 |
In this example, RSI values show that BTC has been shown at the age of 70 and exceeded at the age of 40. This indicates that you should sell or wait for a break for more than $ 6,000 in the US before buying.
Additional tips and aspects
- Stay in the latest department : Keep your technical indicator up to date.
- Avoid excessive emphasis on indicators : No -Over technology indicators; You are just a tool in the investor’s tool series.
- Focus on trading volume : Follow trading to determine demand and possible support or resistance.
- Use multiple indicators : Combine different indicators such as: B. Moving averages and Bollinger strips for more comprehensive analysis.
Research
Technical indicators can be a valuable tool for trading cryptocurrencies such as Bitcoin and Ethereum. With the combination with other tools, such as diagram models and market mood analysis, you can develop the best -based strategy to produce a profitable business.
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