Cryptocurrency Exchange
Cryptocurrency exchange, also known as the Digital exchange, allows traders to trade with cryptocurrencies or digital currencies. Now talking about the trading aspect, technical analysis plays a significant part.
How do we analyze the current market, decide whether to BUY or SELL trade, and determine the trend of the need of a particular crypto- To get an insight on all these questions, these indicators should probably be known to an extent?
Indicators
Indicators are technical systems that allow a trader to quickly calculate the price, trend, volume, and reaction of an asset. Every indicator is built on their formulae as per their founder's perspective, which a trader needs not necessarily know. Majorly all indicators are supported by the Cryptocurrency Exchange Platforms.
Top 5 Indicators
Here are the leading 5 indicators that traders may use:-
1. RSI - Relative Strenght Index
2. Bollinger Bands
3. EMA - Exponential Moving Average
4. MACD
5. Parabolic SAR
However, detailed research is to do on these indicators before a trader can start using them in their analysis in real-time.
Indicators SetUp
1. RSI -Relative Strenght Index
Length - 14
upper limit - 70
LowerLimit - 30
When can a BUY be triggered?
A Buy trade can be triggered when the RSI crosses the lower limit upwards (from below).
When can a SELL be triggered?
A Sell trade can be triggered when the RSI crosses the upper limit downwards (from above).
2. Bollinger bands
Length-20
Mult - 2
When can a BUY be triggered?
When the candlesticks cross the lower line from below, a Buy trade can be triggered.
When can a SELL be triggered?
When the candlesticks cross the upper line from above, a Sell trade can be triggered.
3. EMA - Exponential Moving Average
Length - May vary based on the data requirements of the trader. Most commonly used are 8,21, and 50.
Usually, the EMAs are used in combination with other indicators. (ex) In combination of an 8 EMA and 21 EMA, a BUY can be triggered when lower EMA crosses over the higher EMA from below, vice versa when the higher EMA crosses over, the lower EMA from above a SELL can be triggered.
4. MACD
FastLength - 12
SlowLength -26
When can a BUY be triggered?
When the MACD line crosses over the signal line from below, a buy trade can be triggered.
When can a SELL be triggered?
When the MACD line crosses the signal line from above, a Sell trade can be triggered.
5. Parabolic SAR
Default Settings.
It can be used generally in combination with other indicators. These are usually represented in the form of circles.
When can a BUY be triggered?
When the first circle formed is below the candlesticks, then a Buy trade can be triggered.
When can a SELL be triggered?
When the first circle formed is above the candlesticks then a Sell trade can be triggered.
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