Since blockchain technology was integrated into financial systems, money markets have seen a surge in cryptocurrency trading. Today, exchanges allow crypto traders to profit from lucrative ventures using crypto buy and sell signals. This article will discuss the top seven crypto trading indicators to get the most out of the crypto market.
Best Crypto Indicators TradingView
If you are new to cryptocurrency trading, indicators are simply calculations that help traders discern possible market trends and likely price changes in crypto assets. Let's see the best indicators to make the best buy-sell transactions in cryptocurrencies.
Moving averages
Many crypto traders favor this indicator because of its simplicity, which does not detract from its effectiveness. With moving averages, crypto is analyzed by measuring its average over defined periods of time. This strategy eliminates complex details and highlights trends. It helps in understanding possible directions of market trends and predicting price movements on Trading View. You need to know the three types of moving averages to make your choice. These are simple moving averages, exponential moving averages, and weighted moving averages.
Simple Moving Averages (SMA): These are analyzed by observing the price at which cryptocurrencies close over a period of time, usually 50 or 200 days.
Exponential moving averages (EMA): These are similar to SMA but assign greater value to more recent price statistics, with the previous price or period decreasing exponentially in weight. Unlike the SMA, it gives equal importance to all prices.
Weighted moving averages (WMA): Here, greater value is given to recent prices while older prices or periods are given less weight. The difference between WMA and EMA is that previous prices or periods decrease exponentially in EMA. You can easily calculate different types of moving averages using defined formulas.
Bollinger Bands
Although this indicator was invented in the 1980s, long before crypto trading, it provides crypto trading advice today. Bollinger Bands help crypto traders on TradingView calculate SMA volatility and subsequently determine which cryptocurrency is overbought or oversold by examining its position, whether it is in the range or still in the market .
Let's describe how it works. Two lines are observed: the simple moving average (indicates the trend) and the line showing the standard deviation (indicates volatility). The price movement is analyzed by looking at the volatility, known by the disparity between the lines. The greater the difference, the more volatile the asset; the closer the difference, the less volatile the asset.
Ichimoku Cloud
This is an advanced level analysis with five levels of calculations. Its advantage is that it offers you much more than just price trends; it also shows you the strength of the trend and which market positions are likely to experience support or resistance.
It is calculated by solving five lines: the conversion line, the baseline, the main duration A, the main duration B, and the delayed duration. After the calculations you can know if the trend is up if the price is above the cloud value and when the price is below the cloud value the trend is down. However, for safer trading decisions, it is generally advised not to use the Ichimoku cloud alone but in conjunction with other indicators.
Relative Strength Index (RSI)
This is another frequently used TradingView crypto indicator. The Relative Strength Index is used to measure the trading strength of a cryptocurrency by examining its short-term momentum. With the RSI, short-term dynamics are analyzed by considering the speed and movement of assets. This crypto buying and selling indicator can predict market waves in the short to medium term.
RSI is calculated as a percentage and usually shown as a line passing through two static lines. When the RSI line is about to rise, it indicates that the cryptocurrency has been oversold, and when it is about to fall, it indicates that it is overbought. In numerical analysis, an RSI below 30% indicates that prices are likely to rise in the short term, and above 70% indicates that prices are likely to fall.
Stochastic oscillator
This cryptographic indicator was first proposed by George Lane a few years after World War II. The Stochastic Oscillator shows you the momentum of a cryptocurrency's closing low and high prices analyzed over a period of time. Most traders use a 14 day time frame. The calculation analyzes the behavior of two moving average lines and the oscillator value for a given period. When these lines cross, traders may see a movement in price momentum. Many traders do not use the Stochastic Oscillator as their sole indicator; it is typically used in conjunction with other crypto indicators such as Relative Strength Index, Aroon Indicator, and On-Balance Volume, among others.