To be successful in the cryptocurrency business you need to use the correct tools. There are several different cryptocurrency indicators that you can use – But which one is the best? If you would like to know which indicator that are best for short- or long term trading you should read this article.
The most important part of using a cryptocurrency indicator is the understand the signals that it gives. There could be a positive or negative signal coming from the indicator. This is one of the reasons why it is critical to understand how to use an indicator.
If this is the first time you read about cryptocurrency indicators we highly recommend that you read more about them. Read different texts and different aspects of the indicators.
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Intraday Cryptocurrency Indicators
Two indicators that are the best intraday indicators are both volume and news. News travels fast and if you hear some interesting news early that could result in some really good trading. What the news is about is not necessary relevant. It could be anything from a company news or a huge new trade.
“To be able to day trade cryptocurrency effectively you need to be on top of the news in the crypto community.”
When putting news plus volume together the probability that the news is real gets higher. If you for example hear about a news story that would increase the worth of your coin and that the worth actually goes up followed by bigger volume you should keep your eyes open.
It can feel impossible to hear about new and exciting news fast. Therefor it is important to position oneself in the market. We recommend that you follow knowledgeable people on social media, especially Twitter.
When talking about momentum indicators there are three that we like particularly – RSI, MACD and volume.
Relative Strength Index (RSI): RSI is an indicator that help traders with swing traders or day trades. RSI calculate ranges which doesn’t make it a tool to use for long-term trades.
MACD: When you find the market a bit choppy MACD is the indicator to use. MACD gives great signals when to buy and when to sell.
When using RSI or MACD volume is critical. Always include volume when analysing cryptocurrency. In this way, you will get a stronger reading.
We have mentioned volume quite a bit in this text. This is because volume is an important indicator for cryptocurrencies. As a trader, you can use volume for short- and long-term trading.
Volume is also an indicator that shows both build-ups or slowdowns in the cryptocurrency market. Volume is by any traders their number one indicator.
Time is an important aspect when analysing cryptocurrency indicators. As a buyer, it is easy to only pay attention to one time frame. This is not the right way to go. One should always analyse crypto charts buy looking at it through different time frames.
You will always find the biggest trends and patterns when looking in the biggest time frame. If you for example would like to find a setup on a chart for 30 minutes you should start by zooming out and analyse the data in a time frame of 10 hours or even an entire day. When you have analysed the data, you can zoom in one again.
Step by step:
- Start by looking at the bigger picture. This is a great way for identifying general direction by.
- Zoom in on the specific trends that you can identify.
- Identify the setup you like and trends within the setup.
- Now you can zoom out to the timeframe you prefer.
We hope this article have given you some new perspective on cryptocurrency indicators. After reading this maybe you will use indicators in some new ways and with some new perspective. You should try them out, taking it slow and really getting to know the different indicators separately.
As we wrote in the beginning of the article we recommend that if you are new in the trading business you need to read more articles. It is important to really gather a lot of facts and as many perspectives as possible.