Trading indicators are part of trader’s arsenal to maximize trading profits. They assist traders in determining the price direction of the crypto and other financial markets. Technical indicators can help you in the short-term and long-term price analysis.
So, if you are in search of the best crypto trading indicators, this post is for you.
In this guide, we’ll explain some of the best crypto indicators and how they can help you trade effectively.
1. Relative Strength Index (RSI)
The first on the list is popular among many traders. It computes an asset’s gains and losses over a specified period.
The RSI is divided into two levels: 30 and 70. When the RSI reaches 30, it indicates that the market is oversold and you should go long.
On the other hand, when the RSI reaches 70, the market is overbought, and you can enter short positions.
2. Moving Average Convergence Divergence (MACD)
The MACD is admired by traders all over the world for its flexibility and simplicity. It is used as a trend or momentum indicator.
It depicts the difference between two moving averages, applying the current MACD and the exponential moving average (EMA).
3. Bollinger Bands
Bollinger bands can help you decide whether prices are high or low in relation to one another. Bollinger Bands are made up of three lines: An upper and lower band, as well as a simple moving average (middle band).
The higher prices get to the upper band, the more overbought the market becomes, and when the prices get closer to the lower band, the more oversold the market becomes.
So, there you have it. These three indicators are some of the best for the crypto market.