3 most useful indicators for trading altcoins
In our blog we share some useful tips on how to trade altcoins. Perhaps, you have already implemented some of them in your cryptocurrency trading strategy and even made some profits.
Trade altcoins at BestRate.org
This article is going to contain some cryptocurrency trading advice as well. The platform where we are going to look for the signs is www.tradingview.com. Now we’re going to share some tips on how to use this powerful tool to make more profits in the cryptocurrency area.
When you analyse the price of this or the other altcoin, it will be very useful to pay attention to the following 3 indicators: MACD, Stochastic and RSI.
You can find these indicators with your click on the corresponding button at the top tool menu:
Once you switch them on, you’ll be able to see them below your graphic. Let’s dig into details and find out how these indicators can help you.
Trading tip: never rely on only 1 signal. Always look for at least 3 of them. If all the indicators described below signal you to buy or to sell, then this is the best time to do it.
MACD
MACD stands for Moving Average Convergence/Divergence Oscillator.
What it shows: the trends in the cryptocurrency market. Its slope shows the direction of the trend, whether it goes upward or downward.
The blue line (MACD) shows the difference between 12 Day Exponential Moving Average and 26 Day EMA.
The orange line (Signal line) shows the average of MACD over the last 9 days.
The histogram (red bars) shows the difference between these two.
When to buy: MACD line cuts the signal line in the uptrend.
When to sell: MACD line cuts the signal line in the downtrend.
The trend is going to end: MACD line is different from the price line.
Stochastic oscillator
This indicator shows whether the cryptocurrency is overbought or oversold at the moment. If the digital coin is overbought, the price goes down. If it is oversold, the price moves up.
This indicator can be especially useful when the price action graph is in the flat condition and there are no spikes.
When to buy: the line is below 20, the market is oversold, the price is going to move up soon.
When to sell: the line is over 80, the market is overbought, the price is going to move down soon.
RSI
This abbreviation stands for he Relative Strength Index. It also helps to understand whether a cryptocoin is oversold or overbought and thus predict trend reversals.
It’s calculated by this formula:
RSI = 100–100 / (1 + RS),
where RS is the [Average gain of up periods during the specified time frame] divided by [Average loss of down periods during the specified time frame].
When to buy: the line is below 30, the market is oversold, the price is going to move up soon.
When to sell: the line is over 70, the market is overbought, the price is going to move down soon.
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