Top 10 Indicators Every Crypto Trader Should Know
The best strategy in crypto trading is the usage of crypto trading indicators or technical indicators. Let me know about crypto trading. Every trader in the market makes use of different techniques and strategies to increase profits. The evolution in the crypto industry is due to advanced inclusions in it.
Technical analysis is one of the well used methods to analyze the crypto market. There are hundreds of strategies and indicators to get enough yield from crypto trading.
Here are the top 10 crypto trading indicators that will be helpful for those who want to become a pro in crypto trading.
- Moving average
- Exponential moving average
- Moving average convergence divergence
- Relative Strength Index
- Stochastic oscillator
- Fibonacci retracement
- Bollinger bands
- Ichimoku cloud
- Average directional index
This indicator is used to identify the direction of the price trend. For getting a single trade line, price points are divided by some data points. We can see the future patterns by studying the support and resistance levels and history of the market.
Exponential Moving Average (EMA)
The Exponential Moving Average places greater weights and shows complete significance on data points. Based on crossover and divergence, this indicator is used to generate buy and sell signals. Investors use different EMA lengths like 10-day and 200-day. Higher the influence of EMA, the higher the smoothing factor.
Moving Average Convergence Divergence (MACD)
It is a momentum-based indicator. It is used to identify the oversold condition. Without boundaries, it appears as two lines on the chart. Momentum is decreasing with convergence and it is increasing with diverging. If MACD increases above the signal line, it is called bullish crossover. If MACD decreases below the signal line, it is called bearish crossover.
Relative Strength Index (RSI)
It is also a momentum-based indicator that measures speed and change of price. Its value ranges from 0 to 100. By considering whether it is overbought or oversold, this strategy is used to evaluate the asset. There is a bullish sign if the RSI value is above the reference level 30. If the RSI value is below the reference level 70, the bearish sign is indicated.
It is a final trading momentum indicator. It is used to follow the speed of the price. It indicates a sell signal if the reading value is above 80 (overbought limit). If the reading shows a value below 20, it indicates a buy signal (oversold limit).
It is a mostly used indicator of all Fibonacci trading tools. It is used to draw support lines and resistance levels and helps to set the target prices and either open or close their positions while indicating. It can indicate an upward and downward trend.
Bollinger bands are widely used momentum-based indicators. It is mostly used to predict long price movements. To show volatility, bandwidth varies (i.e.,) increase or decrease. If the bands are narrower, lower the perceived volatility. Wider the bands, the higher the perceived volatility.
Ichimoku means a one-look equilibrium chart. It is a set of technical analysis tools that are combined with the comprehensive indicator. It is used for various purposes like showing updated support, resistance levels, and forecasting future levels. Indicator forms a cloud that traders can easily find the support points, resistance level and predict the updated trend.
Average Directional Index (ADX)
It is one of the trend-based indicators. When a trend is upward (i.e) reading is above 25, it is a +ve directional indicator. When a trend is downward(i.e)reading is below 25, it is a -ve directional indicator. This trend indicates the strength of a trend. Based on trend strength, investors can move on to the where to bet, whether it is in the short or long asset.
It is also a popular trend-based indicator developed by Tushar Chande. It is very helpful in identifying the strength of a trend. The Aroon up line is measured on a scale from 0 to 100. If the scale ranges from 70 to 100, it’s called the Aroon up line. If the scale ranges from 0 to 30, it is called the Aroondown line.
The above technical indicators are popular indicators. So, every individual who is involved in crypto trading should know about these 10 crypto trading technical indicators. It will give you high profits if you have knowledge about these indicators.