5 IMPORTANT INDICATORS FOR BEGINNERS for KUCOIN:BTCUSDT by CRYPTOMOJO_TA — TradingView

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Moving average

A moving average is a technical indicator that combines price points of an instrument over a specified time frame, and divides by the number of data points, to give you a single trend line. It is popular with traders because it can help determine the direction of the current trend, while reducing the impact of random price spikes.

A moving average will enable you to examine the levels of support and resistance, by analyzing the past movement of an asset’s price. It is a measure of change that tracks the past price action of an asset, assessing the history of market movements to determine possible future patterns. A moving average is primarily a lagging indicator, making it one of the most popular tools for technical analysis.

Calculating an MA requires a certain amount of data, which can be a large amount depending on the length of the moving average. For example, a ten-day MA will require ten days of data, while a one-year MA will require 365 days of value. A 200-day period is a very commonly used time frame for MA.

The indicator is described as ‘moving’ because the introduction of new numbers will replace old data points and ‘move’ the line on the chart.

Bollinger Bands

Bollinger bands are typically plotted as three lines:

An upper band A middle line A lower band The middle line of the indicator is a simple moving average (SMA).

Most charting programs default to a 20 period, which is fine for most traders, but you can experiment with different moving average lengths after you have some experience applying Bollinger Bands.

By default, the upper and lower bands represent two standard deviations above and below the mean (moving average).

If you are crazy because you are not familiar with standard deviations.

Don’t be afraid.

The concept of standard deviation (SD) is just a measure of how spread out numbers are.

If the upper and lower bands are 1 standard deviation, this means that about 68% of the price movements that have occurred recently are CONTAINED within these bands.

If the upper and lower bands are 2 standard deviations, this means that about 95% of the price movements that have occurred recently are CONTAINED within these bands.

Relative Strength Index (RSI)

RSI is considered overbought when above 70 and oversold when below 30. These traditional levels can also be adjusted if necessary to better match the security. For example, if a security repeatedly reaches the overbought level of 70, you may want to adjust this level to 80. Note: During strong trends, the RSI can remain overbought or oversold for long periods of time.

RSI also often forms chart patterns that may not show on the underlying price chart, such as double tops and bottoms and trend lines. Also look for support or resistance on the RSI. In an uptrend or bull market, the RSI tends to stay in the 40 to 90 range with the 40-50 zone serving as support. During a downtrend or bear market, the RSI tends to stay between the 10 to 60 range with the 50-60 zone acting as resistance. These ranges will vary depending on the RSI settings and the strength of the security’s or market’s underlying trend. If underlying prices make a new high or low that is not confirmed by the RSI, this divergence may indicate a price reversal. If the RSI makes a lower high and then follows with a downward move below a previous low, a Top Swing Failure has occurred. If the RSI makes a higher low and then follows with an upward move above a previous high, a Bottom Swing Failure has occurred.

MACD (moving average convergence divergence)

Moving average convergence divergence, or MACD, is one of the most popular tools or momentum indicators used in technical analysis. It was developed by Gerald Appel in the late 1970s. This indicator is used to understand the momentum and its directional strength by calculating the difference between two time period intervals, which is a collection of historical time series. In MACD, ‘moving averages’ of two separate time intervals are used (usually done on historical closing prices of a security), and a momentum oscillator line is arrived at by taking the difference of the two moving averages, also referred to as ‘divergence’ . The simple rule for taking the two moving averages is that one should be of shorter period and the other of longer period. Generally, exponential moving averages (EMA) are considered for this purpose.

Description: The main points for a MACD indicator are:

a) Time period or interval – which the user can define. The commonly used periods are:

Short-term intervals – 3, 5, 7, 9, 11, 12, 14, 15-day intervals, but 9-day and 12-day durations are more popular

Long-term intervals – 21, 26, 30, 45, 50, 90, 200 day intervals; 26-day and 50-day intervals are more popular

b) Momentum oscillator line or divergence or MACD line – which can be a simple plot of ‘divergence’ or difference between two interval moving averages

c) Signal line – which is exponential moving average of divergence data, e.g. 9-day EMA

d) Normally a combination of 12-day and 26-day EMA of prices and 9-day EMA of divergence data is used, but these values ​​can be changed depending on the trading objective and factors

e) The above data is then plotted on a graph, where the X-axis is for time and Y-axis is price, to get MACD line, signal line and histogram for the difference between the MACD and signal line, which is shown below the X axis

Volume

Volume, or trading volume, is the number of units traded in a market during a given time. It is a measurement of the number of individual units of an asset that changed hands during that period.

Every transaction involves a buyer and a seller. When they reach an agreement at a specific price, the transaction is recorded by the facilitating exchange. This data is then used to calculate the trading volume.

Trading volume can be denominated in any trading asset, such as stocks, bonds, fiat currencies or cryptocurrencies. For example, if Alice Bob sells 5 BNB for 20 USD each, the volume of that transaction could be either 100 USD, or 5 BNB, depending on what the trade volume is denominated in. This also means that for a share, for example, the trading volume refers to the number of individual shares traded during the measured period. So if 100 shares are traded on one trading day, the daily volume of the stock is 100 shares.

Traders tend to use the volume indicator as an attempt to gain a better understanding of the strength of a given trend. If volatility in price is accompanied by high trading volume, the price movement can be said to have more validity. Conversely, if a price movement is accompanied by low trading volume, it may indicate weakness of the underlying trend.

Price levels with historically high volume can also give traders an indication of where the best entry and exit points may be located for a particular trade setup.

Typically, a rising market should see increasing volume, indicating continued buyer interest to keep prices higher. Increasing volume in a downtrend may indicate increasing selling pressure.

Reversals, exhaustion moves, and sharp changes in price direction are often accompanied by high volume increases, as these tend to be the times when the highest number of buyers and sellers are active in the market.

Volume indicators often also include a moving average, which measures the volume of the candles in a given time period and produces an average. This gives traders an additional tool to gauge the strength of the current market trend.

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