Lots of you asked like what are the most effective indicators? ” or “what is the most accurate technical analysis?” “what is the most effective trading method?”. Now in this episode, I will answer all those questions.
Actually, the most effective, the most accurate, or the most effective indicator depends on your trading style, level of knowledge and execution. So, here I want to discuss the most popular technical analysis indicators among traders.
Keep in mind that, out there are lots of indicators out there. But what is discussed in this video is the most popular and widely available in almost all exchangers.
So what are the indicators?
As we have already discussed in indodax academy eps 4, Moving Average is an indicator that displays the average price movement in a period. It can be called an indicator of a million traders because of its simplicity. If you want to calculate the average price movement within 50 days or so-called MA50.
To bring up the Moving Average indicator on the crypto asset chart, you can log in to your account at indodax.com, then click marketplace. Then click on any crypto asset that you want to see, and we click on the advanced chart. Then click the indicator, many indicators will appear here, but we will use the moving average indicator. Then a blue line will appear that shows the moving average line. To change the Moving Average period, you can click format, then just write 5 for MA 5 days, 20 for MA 20 days or 50 for MA 50 days.
How to use this indicator is to look at the price position compared to the MA50. If the price chart crosses the MA50 and above is considered a buy signal. On the other hand, if the price chart cuts MA50 down it is considered a sell signal.
Relative Strength Index (RSI)
This indicator is used to calculate the ratio between the attractiveness of rising and falling prices, the value ranges from 0-100. With RSI you can find out whether a price is overbought or oversold. In principle, the use of RSI is very easy. If the RSI has a very high value (above 70) it means that the market is overbought so there is a potential to go down, it’s time to sell. Conversely, if the RSI has a very low value (under 30) it means that the market is oversold (oversold) so there is a potential to rise, it’s time to buy.
MACD or Moving Average Convergence/Divergence
This serves to show the trend that is happening and can also provide buy or sell signals. Inside MACD there are two lines that you will encounter, namely Signal Line and MACD Line. If the MACD value is positive (above zero), it means the market is bullish, it is recommended to buy. Meanwhile, if the MACD value is negative (below zero), it means the market is bearish, it is recommended to sell.
Stochastic is an indicator that shows the location of the last closing price compared to the lowest / highest price range during a certain time period. There are three types of Stochastic Oscillators: Fast, Slow, and Full. Usually there are two lines in the Stochastic, namely% K and% D. Buy and sell signals can be seen from the% K and% D lines. If% K cuts% D up, it means a buy signal. Meanwhile, if% K cuts% D down it means a sell signal.
Now that’s the 4 most popular technical analysis indicator among traders. Don’t forget that each trader has different preferences for each indicator used, it all depends on your own choice.