Best chart indicators for cryptocurrency

A bullish candlestick has a higher closing price than its opening price, while a bearish candlestick has a higher opening price than its closing price. When read correctly, candlestick crypto charts can help you see patterns in market trends so that you can predict possible future outcomes. Learning to recognize these levels can help the trader with successful entries and exits. MT4 Support When the level of demand rises to match the supply of a crypto currency or other security, then the price of the asset in a downward trend will stop falling.

This level is known as support and will be tested several times by traders. If the support level does not break after several tests, then traders are more comfortable to enter long trades. Sometimes, however, the support level will be breached and prices will move lower. When this happens, prices will continue lower until a new support level is found. The prior support level often becomes a new resistance level.

Resistance Resistance levels are made when supply matches demand. In an uptrend, prices will rise until they reach a level where demand no longer outpaces supply. As prices get to this level, more traders are willing to sell.

There is more supply than demand, creating a ceiling over prices. These levels will often get tested multiple times. Successful tests of these levels often mean that traders are now more comfortable shorting the security.

Sometimes, however, prices will break through resistance and continue higher. When this happens, prices will continue rising until they find a new level of resistance. As with support, the old resistance level will often become new support levels. Identifying Trends All markets move in trends. There are three main trends. Markets can move upward in an uptrend, downward in a downtrend, or sideways in a channel or consolidation. The trend can be plotted on a chart. The convention is to draw an uptrend line under price, linking the lows.

Some traders will use a moving average to identify the trend in lieu of drawing trend lines. Downward Trends Downtrends are identified when price makes a series of lower lows and lower highs. The trend line is drawn above price by linking the price highs. It is also acceptable to use moving averages in lieu of drawing trend lines. Consolidation Trends Sometimes during an uptrend or a downtrend, the market will oscillate sideways within a narrow band.

These are often dull markets and are sometimes called consolidation trends. Different trading rules apply to these types of markets. Understanding Technical Indicators Traders use many technical indicators to gain greater insight into a trend. There are indicators that are plotted over price, like Bollinger Bands , and those that are plotted in panels above or below price, like the moving average convergence divergence MACD and the relative strength index RSI.

There are also indicators that use volume, like the on-balance volume OBV indicator. Therefore, they should only ever be used in conjunction with price. Confirmation should always come from price. It was developed in the late s by Gerald Appel. This indicator is plotted with two lines: The MACD line, which is the difference between the day exponential moving average EMA subtracted from the day exponential moving average The signal line, which is the nine-day EMA of the MACD The two lines fluctuate around a center line, which is at zero.

There is no upper and lower limit to the indicator. The most common use of the MACD is for signal line crossovers. The signal line trails the MACD line. When the MACD line turns up and crosses the signal line, that is bullish. When the MACD turns down and crosses the signal line, it is bearish. This indicator was developed by J. Welles Wilder. The RSI is bounded and fluctuates between zero and It is a momentum oscillator that measures the speed of price movements.

Default settings are 70 and When the oscillator is above 70, the security is considered overbought. When the RSI drops below 30, the security is considered oversold. They were created by John Bollinger. Volatility is based on the standard deviation. The interpretation of price action depends on the trading environment. In bullish conditions, it is often more profitable to trade in the direction of a price breakout.

In bearish markets, short in the direction of the breakout. The idea behind Bollinger Bands is that prices eventually will return to the mean. Periods of high volatility eventually will become periods of low volatility. It measures buying and selling pressure using volume rather than price. Granville surmised through his observations that volume precedes price. The OBV, therefore, is a running total of cumulative volume.

When the volume on up days outpaces volume on down days, the OBV rises. When the volume on down days outpaces the volume on up days, the OBV falls. TradingView TradingView is a popular site where crypto companies and investors can find live trading charts for crypto.

A free version and a premium version are available on the website. Coinigy The features available on Coinigy help investors to understand market sentiment. It offers a free plan as well as a few paid options. Cryptowatch A popular crypto charting and trading terminal is Cryptowatch. It is owned by the Kraken exchange. The tool allows you to analyze market movements and make trades on major crypto exchanges.

The service is free. When multiple MAs come into contact, the result is a crossover. A crossover is a sign of major volatility in the future. We refer to positive crosses as a Golden Cross and negative crosses as a Death Cross. The example above shows a golden cross that occurred after the day MA crossed the day MA. Each MA is assigned a number.

For example, the day MA has an input of candles. Higher MAs are more suitable for long-term trading, while shorter MAs are better for short-term and intraday trading — usually between 7 and Ichimoku Cloud Ichimoku cloud represents a complex trading style and indicator system originating from Japan in the late 60s. This collection of indicators shows momentum, trend direction, support, and resistance levels.

Ichimoku cloud bears a resemblance to MAs.

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Cryptowatch is absolutely free to use for charting, however, the premium plan includes a variety of benefits such as the ability to trade intuitively through the platform either by using your mobile phone or desktop computer by connecting up to 8 exchange simultaneously. Note that users can trade for free through the Cryptowatch interface by connecting it to the Kraken Pro Account. This is extremely useful in case you are living in the united states since Kraken is also US Customer Friendly exchange with margin features.

BitcoinWisdom BitcoinWisdom is totally free cryptocurrency charting website, that includes all the key exchanges such as Bitmex , Deribit , Kraken , Binance and Coinbase Pro. This platform filled an important purpose back in the day by providing one of the first useable Bitcoin charts for traders. Nowadays BitcoinWisdom is still used by many OG:s and often most beginners also find themselves looking into them, and no wonder since these charts are very userfriendly and easy to use.

Start using BitcoinWisdom for free! How to analyze the cryptocurrency charts? Learning to do technical analysis on cryptocurrency charts is no one night wonder, like everything in life, it takes some work and effort to understand all tools, features, and key elements on the cryptocurrency price charts. A good example of this is how newbies often try to learn all the different indicators, completely forgetting that indicators always follow price, which is what they should be focusing on.

As we can see above, there are of course multiple cryptocurrency charting solutions. However, we must say, to this day nothing has come even close to what TradingView offers, and that is also why we choose it as our favorite choice for analyzing Bitcoin and other cryptocurrencies. The best indicators for cryptocurrency trading help make sense of price action, and help you predict where the price will likely head in the future.

In this article we will talk about my favorite indicators I use on a daily basis to day trade and swing trade cryptocurrencies. They are a crucial component of successful strategies based off technical analysis. There are no holy grail indicators that guarantee a trade will be a winner. I am not going to BS you. These indicators provide confirmation of a trade thesis.

They are not black and white buy and sell signals. New traders in our trading chatroom sometimes struggle because they become too over-reliant on technical indicators. Moving Averages Moving averages are my favorite indicator for cryptocurrency trading out of all the ones I will mention on this list. There are two types of moving averages we trade with: Simple moving averages and exponential moving averages. Simple moving averages are simply the average price of a coin over a certain time period.

For example, a 20 SMA on the daily chart frame will be a line on the chart representing the average price of the prior 20 days. An exponential moving average is the same, except that it gives more weight to recent price action, so it will more closely follow the current trading price. You will see examples of three different moving averages I use on the charts below. Moving averages are useful for all traders and investors of cryptos. Whether you are a day trader , swing trader, or long term investor, moving averages can provide significant value to you.

It is also useful for identifying trends on the lower time frames for day trades, such as on the 15 minute and 1-hour candlestick charts.