Apr 14, · On Balance Volume (OBV): This is one of the best indicators for day trading bitcoin. It is used to basically analyze the total money flow in and out of an instrument. The OVB uses a combination of volume and price activity. This tells you the total amount of money going in and out of the market/5(48). The best bitcoin indicators are RSI, moving averages, Ichimoku clouds, Fibonacci (it's a tool though), volume, momentum, basically, whatever helps you park the car better, but you can do it all without if you know how to drive. And Blockchain Whispers followers are not pussies - .
Best indicators for bitcoin tradingTop 5 Best Bitcoin Indicators You Can Use to Trade Digital Assets - Bitcoin Market Journal
Once you have a short-term MA and a long-term MA switched on your chart, watch out for the crossovers. This is what they mean: If the short MA crosses above the long MA, then this is a bullish trading signal. But, when the short MA falls below the long MA, then this is a bearish trading signal.
See the bearish cross in the chart below and the tremendous price drop that follows. EMAs are used over regular MAs to improve sensitivity to trend changes and price momentum. The signal line, by default, is a 9-period EMA when the signal line is combined with the MACD line, where the two lines converge, diverge and cross forms the basis for many trading signals. The zero line is the level where the MACD line is at zero. The histogram shows the distance of the MACD line from the signal line.
When two oscillating lines crossover, the two common trading signals you can generate using the MACD include: bullish — where the MACD crosses over the signal line or bearish — where the signal line crosses over the MACD line.
And since these crossovers happen quite often, you could experience a lot of false positives. Therefore, you are better off combining these signals with others to generate better trading decisions. If the MACD line and signal line rise together, then this is considered a bullish sign and represents increasing positive momentum.
You can use MACD to find areas of price divergence, thereby offering a trading signal. A bullish divergence is found when the price prints a higher low while MACD prints a lower low, or the price prints a lower low while the MACD prints a higher low. Consequently, a bearish divergence is found when a price prints a higher high, and the MACD records a lower high or when the price prints a lower high while MACD records a higher high. The chart below shows a situation where the price prints a lower low while MACD prints a higher low, indicating a trend reversal is imminent.
The word Fibonacci comes from the Fibonacci sequence brought about by Leonardo Pisa, an 11th-century mathematician. The Fibonacci sequence is derived from a sum of the preceding two numbers, with each number roughly 1. This phenomenon extends even to trading when traders analyze price action.
This allows one to derive levels in a trend in which the price is likely to respect. This is achieved by dividing the peak to trough distance or trough to peak distance by the phi and other ratios in the sequence. Some other crucial ratios include 0. As you gain experience trading, you will realize that price reacts to these levels regularly; thus, it can offer you optimal entry and exit points. A swing high is a candlestick at the peak of a trend at any given time frame and has a lower high on its sides, whereas a swing low is the low candlestick of a trend that has a higher low on either side.
When you identify these points, you can select the Fibonacci retracement tool in your trading software and connect a swing low to swing high.
This way, you will be able to generate potential support levels, also known as retracements. By not re-entering based on assumption of oversold. Now - is the indicator never accurate? Of course not - otherwise it would be good for counter trading. But this is what people do: They when they gain, they "guess" based on an indicator the reversal, they sell very early, when it comes back to above 30 levels And do you want to know the best part?
You do not need an RSI indicator for that! Because no one wants to share with you the secret, your D Man will.. The trading is based on three things: 1 Supply 2 Demand 3 Speculation Supply and demand alone would make RSI and other bitcoin indicators the best tools in the world to trade on.
Alright, if you are set to buying a crypto indicator - my advice is - none. The best indicators out there are free. Update: This happened just a couple hours after this article was published.
It takes less than 40 seconds to get your Blockchain Whispers badge! If you don't have a Blockchain Whispers account click here If you forget your password reset it from here. Click to tweet. CaptainTony Free 0 Reply. Awesome, I was learning a lot when read this article! Thank you, D Man. Aznfyre Free 1 Reply. Good stuff. CabYellow Free 3 Reply. Nice post, totally agree! But what do you think is the best way to study price action on the charts for newbies?
D Man Premium 1 Reply. Simply watch the charts and paper trade. Best method ever. Thank you Boss! My best crypto trading ibdicator is D man ; baby! Trend trading using MAS and Fibs helps me. I only look at the RSI for a long period of divergence, not short term. Sometimes the charts seem to create a 'picture' beyond the pattern that tips the next move. While Fibonacci is not a set of complex, interdependent calculations like many other indicators, it still makes the list because of its usefulness.
The Fibonacci ratios naturally occur in nature and in human decision-making. When there is a sudden movement in price, it will often retrace, or make a move back, towards the trend. A lot of traders believe in the Fibonacci ratios. So, the levels are sometimes met partially because of the principle of self-fulfilling prophecy: People think it will happen, so they make it happen with how and when they decide to place their trades.
Volume is perhaps one of the most valuable, yet underrated bitcoin indicators. Volume shows how many people are buying or selling bitcoin.
If there is a significant price move in a particular direction it only has momentum if there are enough people behind it. The fewer traders, the less momentum. To get your complete bitcoin roadmap, subscribe to Bitcoin Market Journal today! Join the Bitcoin Market Journal newsletter and get objective coverage of bitcoin, altcoins, and ICOs from our trusted analysts.
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