Use of technical analysis for crypto -trading: Beginner’s guide
Cryptomic trafficking has been becoming increasingly popular in recent years, and many investors are plunging into the world of digital names. However, for those who are traded with cryptomes, market navigation and informed decisions may be verified. One of the strategy that can help traders as you succeed is to use technical analysis.
In this article, we will examine how to apply technical analysis techniques to crypto markets, specifically aimed at how to use charts and indicators to predict price movements.
** What is technical analysis?
Technical analysis is a method of analysis of graph formulas to predict future prices. It is based on the idea that it complies with performance, can be used to inform current and future prices. This approach is contrary to the basic analysis that focuses on analyzing the basic economic or market conditions of assets.
Choose the right chart
There are several types of graphs to choose from technical analysis. The most commonly used crypto -trading carts are:
* Trend lines : These lines are drawn based on historical prices data and aims to identify the areas of support or resistance.
Sliding diameters : These calculations are used current and previous asset prices and can be used to identify trends, departures and twists.
* RSI (relative force index)
: This indicator measures a change in the price of the time of time compared to its movement movement. It is used to identify excessive or sold conditions.
Common indicators for crypto -trading
As for technical analysis, there are several indicators that can be useful for crypto -trading:
Stochanský oscillator : This indicator suddenly two sliding diameters against each other and provides the purchase signal when the percentage difference was made 80.
Bollinger bands : These bands consist of a sliding diameter and two standard deviations brought above and below it, which provide the level of support and resistance.
* MACD (divergence of gliding diameter convergence) : This indicator suddenly two sliding diameters against each other, with a MacD line and a signal line. It is used to identify trends, losses and twists.
Use of technical analysis to trade with the day of cryptocurrency
Now that we dealt with the basics of technical analysis, let’s examine how to apply these techniques in the cryptocurrency markets:
* Identify trends : Look for long -term prices trends such as a clear rise or downtrend. You can use indicators as a stochatic oscillator and Bollinger strips to identify support and resistance levels.
* Set the support and resistance : Identify support and resistance areas based on previous price shares and market conditions. Use samples of graphs such as head and shoulders, triangles or wedges to define diploma discounts.
Use indicators to predict pricing movements : Select the correct indicator for your business strategy and use them to predict prices movements. For example, if you are using a MacD line with a signal line above an uprend, this may indicate a potential reversal.
* Set up stops and profitable organizations : Set up stop stopping based on key graph documents or support zones/resistance zones and set the levels of profitable organizations when the price reaches a specific level.
Example of a business strategy
Here is an example of a business strategy that uses technical analysis to trade cryptocurrencies:
- Select the cryptocurrency market (eg Bitcoin, Ethereum).
- Identify the trend by finding a clear uptrend or downtrend.
- Set your graph with relevant indicators and patterns (stochastic oscillator, Bollinger Bands, Line MacD).
- Find the support/resistance level based on previous prices and market conditions.
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