These days, the use of tools or indicators of technical analysis (TA) has become part of the daily trading paradigm. Even for daily cryptocurrency trading, these indicators can help to integrate analysis, leading to a greater likelihood of successful profits.
Cryptocurrency Day Trading
Day trading is about maximizing the price fluctuations in the assets that occur in one day trading. For a volatile asset class like cryptocurrency, this leads to the potential for significant gains and devastating losses.
SimpleFX WebTrader offers operators the opportunity to gain from the volatility of cryptocurrencies like Bitcoin. With day trading, it can be argued that the fate of traders is in his hands unlike "hodling" – buy and hold cryptocurrency for a period, in anticipation of a significant price increase.
In 2018, many hodlers, especially those who bought during the culmination of cryptomania would have seen their holdings decline dramatically, as the prices of cryptocurrencies have dropped significantly throughout the year. Considering that, history is not so for day traders who only deal with the performance of a currency in the one-day trade.
In simple terms, TA is a way of knowing when to buy / sell decisions based on market trends (indicators). It requires pouring on graphs and statistics trying to predict what the cryptocurrency price trajectory will be; towards the top or the bottom. Regarding the daily trading of cryptocurrencies, the following are some of the best technical analysis indicators seen on SimpleFX WebTrader.
RSI stands for the Relative Strength Index and is a momentum indicator which means that it measures the speed of price changes. Therefore, CSR provides information on whether a particular cryptocurrency is oversold or overbought. The main hypothesis that when a cryptocurrency is oversold, its price increases and vice versa.
Typically, RSI can be used to locate upper and lower parts, as well as divergence points. In other words, the points of divergence are the points where the top and bottom of the RSI differ from those of the upper and lower parts of the price.
RSI has a formula that is expressed below:
RSI = 100- (100 / (1 + RS)),
Where RS = Average Gain / Average Loss
RSI below 30 indicates "oversold", which means that the price should increase.
RSI above 70 means "overbought" which means that the price should decrease.
The Moving Average Convergence Divergence or "Mack-Dee" uses the interface between two moving averages (MA) and a "trigger line". The two Mas are used to draw a "main line", and the position of the intersection between the two lines indicates if it is the right time to buy or sell the cryptocurrency.
If the main line intersects the trigger line from below, it is seen as a purchase signal for the cryptocurrency. If the opposite is the case, then it is interpreted as a sales signal for the cryptocurrency.
The TA volume instrument indicates the amount of cryptocurrency that has been exchanged during a specific period. It is one of the indicators with the most competition with price action – the price movement of cryptocurrency
Short-term trading is regularly based on price action to make decisions subjective without having to interpret graphs and statistics. What the volume TA tool is useful in as it can easily integrate the trader's interpretation of the current price action.
The stochastic oscillator is similar to RSI as it is between 0 and 100 and also indicates if the cryptocurrency is oversold / overbought. However, while RSI considers the rate of change in prices, the stochastic oscillator examines the support and resistance levels of cryptocurrencies during trading.
When the stochastic oscillator moves above 80, the cryptocurrency is overbought, indicating an imminent price decrease When the stochastic oscillator moves below 20, the cryptocurrency is oversold and the price should increase.
At first glance, a chart of cryptocurrency prices only indicates in which direction the value is moving, up or down. For traders, this is not enough because you need to know the relative price movement – higher / lower highs / lows.
Bollinger bands are essentially price channels tracked both above and below the price of a cryptocurrency. Properly done, Bollinger bands can capture up to 90% of virtual currency prices.
The basic rule of thumb for the bbands is the price of cryptocurrency that approaches the lower band means "buy signal" while the price approaching the upper band is a "sales signal".
Advantages of SFX WebTrader
In addition to the ease of access and use of these indicators, the SimpleFX WebTrader platform, recently restarted, faster and more intuitive, also offers other benefits that include the following:
- Easy to use . The user interface is not clumsy or clustered. It boasts a series of features designed to simplify the web trading process. The platform also offers deposits and direct cryptographic payments.
- The platform also has a robust API that allows operators to manage their positions effectively, allowing them to read tools, exchanges and prices quickly and easily. The secure API manager also allows experienced users to easily integrate external automated trading or analysis solutions.
- SimpleFX WebTrader is optimized for all devices that offer useful graphics, trend lines, Fibonacci tools, etc.
- Traders can also use leverage up to 1: 500 which means they can trade with positions that are 500 times larger than their deposits. Therefore, if a trader chooses to use the 1: 500 leverage option, if he deposits $ 1,000 on his account on SFX, he can trade with $ 500,000. This allows the possibility of higher profits.
With SimpleFX WebTrader, daily cryptanalysis trading can be a breeze with its rich user interface and the assortment of important TA indicators.
What do you think about SimpleFX WebTrader and its catalog of useful TA tools? Please let us know the comments section below.