Cryptocurrency is the latest trend in the technological field. It has a vast potential to influence the global market. Today, there are many cryptocurrency exchange platforms available, allowing people to buy and sell using these virtual currencies. Experienced investors make use of crypto technical indicators while trading. Technical indicators hold an essential position while trading with cryptocurrency. In this blog, we will see some best technical indicators, that will give you a boost in your trading profits.
What Are Technical Indicators
Technical indicators are some overlays and additions on cryptocurrency prediction charts, giving extra information through mathematical calculations on price and volume. There are four common types of indicators.
- Volatility – This indicator informs you about change in price in a given time. It is the most crucial indicator in the cryptocurrency market.
- Momentum -This indicator tells you the strength of the trend. It can also determine whether a reversal can occur.
- Volume – This indicator informs you about any change in trading volume, like the number of Bitcoins sold and brought over time.
- Trend – Trend indicator guides with the direction cryptocurrency market is moving on. A Trend indicator is also called oscillator.
List Of Best Technical Indicators
These are volatility indicators, containing a simple moving average, with two lines plotted at two standard deviations which can appear on any side of centrally moving average line. The outer lines than creates the band. Crypto market is quite when this band gets narrow. When a band gets wide, it will indicate a booming market.
Relative Strength Index (RSI)
It is a momentum indicator where plotting is done on a separate scale. The Relative Strength Index has a range from 0 to 100, indicating overbought and oversold conditions in the cryptocurrency market.
Ichimoku Kinko Hyo
It is also known as Ichimoku Cloud. This indicator is a group of lines plotted on a chart. This indicator’s primary goal is to predict future price momentum, and it also focuses on areas of resistance and future support.
Parabolic Stop and Reverse (SAR)
Parabolic Stop and Reverse is a trend indicator, which displays several dots above or below the price, indicating price movement’s potential direction.
Moving Average Convergence Divergence (MACD)
Moving Average Convergence Divergence is a trend indicator and it consisting a slow line, a fast line and a histogram. This indicator’s inputs are a slower-moving average (MA-slow), a faster-moving average (MA-fast), and a number signifying the period for another moving average (MA-period).
Average Directional Index (ADX)
ADX is a trend indicator, ranging from 0 to 100, giving you the signal of trend strength. ADX below 20 indicates a weak trend, while above 50 indicates a strong trend.
The stochastic indicator comes in the category of momentum indicator. Much similar to the RSI, it is used to determine the overbuying and overselling of an asset. The stochastic indicator is created by plotting two lines on separate charts. You can avoid fakeouts with the help of the Stochastic indicator.
In conclusion, we have seen some of the best technical indicators available today to give a boost to your trading profits. Basic knowledge of these technical indicators is crucial for any cryptocurrency investor to know how the crypto market works. There exist four types of technical indicators targeting different aspects of the crypto market like volatility, strength, volume and direction the market is moving on. Investors can make their investment strategy by using the combinations of these technical indicators to eliminate fakeouts and improving their position in the cryptocurrency market. Finally, investors can use these best tradingview indicators to increase their chance of earning more profits from cryptocurrency trading.