A cryptocurrency is basically a digital currency that uses cryptography to protect the processes of creating units, carrying out transactions, and confirming ownership exchanges. One of the most widely used cryptocurrency exchanges, KuCoin is a straightforward and secure platform. It is a straightforward trading platform for digital assets like Ripple (XRP) and Algorand price. KuCoin is well-known for its token launch and spotlight IEO platform. The KuCoin exchange’s lending of cryptocurrency is yet another unique feature which has great crypto prices today. This article will talk about technical analysis, which is a way to predict the direction of an asset’s price based on the asset’s volume and past market price. There are some very useful indicators for technical analysis that you can use to your advantage to increase your chances of success.
How Do Indicators Work?
Traders make use of indicators to predict the direction of the market. They can be used to illustrate patterns of price behavior. After that, plans can be made to take advantage of these patterns. Additionally, they keep track of any news or changes in other markets that could impact the price.
Which Indicators Are Most Useful For Technical Analysis?
Moving Average Convergence Divergence (MACD), like the Relative Strength Index (RSI) also, Bollinger Bands, and On Balance Volume (OBV), which we’ll discuss in this article, are among the most useful technical indicators for trading.
The MACD recipe is utilized to show the pattern following energy. How do you figure it out?
A 26-period exponential moving average (EMA) – 12-period exponential moving average (at closing prices). If the MACD is positive, this likewise indicates upward momentum. A bullish cross, also known as a “bullish cross,” occurs when the MACD slopes upward toward crossing the signal line (as shown below). A negative MACD indicates negative momentum on the downside. A bearish cross occurs when the MACD descends, crosses the signal line, and deviates below it. This can be interpreted as an opportunity to sell.
The RSI is a price indicator that can be used to determine whether an asset has been overbought or oversold by looking at recent price changes. How do you figure it out?
Normally, 14 periods are used, but the trader can choose how many to use. RSI = 100 – 100 / (1 + RS) RS = no. Average of periods with higher closing prices and lower closing prices
In most cases, the asset has been oversold if its value exceeds 30. On the other hand, an asset has been overbought if its value is greater than 70.
By allowing the widths of the upper and lower bands to change in tandem with price fluctuations, the Bollinger Bands indicator can determine an asset’s price movement within a band. An asset’s price may reverse if it moves outside the upper and lower bands.
An indicator called OBV uses an asset’s volume flow to forecast price movements and assess how strong buy or sell signals are. Middle Band – Simpily Moving Average more than 20 days (SMA) Upper Band – SMA more than 20 days + (Standard deviation of price over 20 days x 2) It is utilized as a cumulative indicator, which entails:
- The day’s volume is added to the OBV total if an asset’s price closes higher.
- However, the day’s volume is subtracted from the OBV total if an asset’s price closes lower.
- There are no calculations made if it is the same.
The basic idea is that if there is a greater high (unless there is a resistance zone), there is positive volume pressure and a good chance that the price will rise. A lower high do the opposite unless it (hits a support zone). This indicates that there is negative volume pressure and a good chance that an asset’s price will fall.
These are just some of the best indicators available for technical analysis; there are many more. It’s always a good idea to try as many strategies as possible to see which ones are generally working best for you. What works the best for one trader may not work for others. While KuCoin also have a great demand of crypto indicators as it is one the best leading crypto exchangers nowadays.