Understanding of the crypto trade with RSI and MACD: Analysis of technical indicators
The world of crypto trading is becoming increasingly popular, which is due to an increase in decentralized exchange (Dexs) and the increasing demand for digital assets. However, the navigation of this complex market can be discouraging, especially for beginners. In this article, we immerse yourself in the use of RSI and MACD technology indicators in cryptom trading and examine their strengths and weaknesses.
What are RSI and MacD?
Before analysis, quickly examine what the RSI (relative force index) and MacD (divergence of the convergence of the sliding diameter):
* RSI
: Current indicator that measures the speed and change of prices over time. It oscillates between 0 and 100, with high values displaying the credit conditions and low values on the conditions sold.
* MACD
: RSI expansion, in which two sliding diameter are used to smooth the noise and increase the signal.
How do RSI and MACD work in crypto trading?
In markets with cryptoms, RSI can also be used as indicators to identify potential purchases or sales signals. Here is a brief overview:
* RSI : If RSI falls under 30, this can indicate that the cryptocurrency has a quick increase in pricing (the disease). On the contrary, if RSI increases over 70, this can signal a reduction in price volatility.
* MACD : Line MacD can help identify the performance of upward trend or downward trend. Bullic intersection line above the signal line can mark a potential purchase signal, while crossing the bear can suggest a sales signal under the signal line.
Key functions and considerations
When using RSI and MacD when trading cryptocurrencies:
* Change of parameters : Both indicators have adjustable parameters to celebrate their performance. For example, the settings of EMA (exponential sliding diameter) and signal lines can significantly influence their efficiency.
* Zeit frame : RSI and MACD work best with a longer time frame (e.g. 14-day or 50-day-MA). Shorter time frames do not have to provide precise signals with high volatility cryptoms in markets.
* Overlapping indicators : The use of several technical indicators such as RSI and MACD can lead to an overlapping signal. This can be advantageous to identify trends, but also increases the risk of incorrect signals.
case studies: Use RSI and MACD
To illustrate your effectiveness, analysis is hypothetical example:
Suppose we act with Bitcoins (BTC) with an average price range of 25,000 to 30,000 US dollars. We use RSI to identify potential purchases and sale of signals and MACD to navigate in this trend.
Example 1: Buy a signal
- RSI falls under 20 and rises over 70
- MacD crosses over the signal line
In this scenario we can enter a purchase position for $ 26,000. While the price continues to rise, our MACD line would probably go through the signal line, which indicates that this trend will probably be continued upwards.
Example 2: Sales signal
- RSI falls under 20 and rises over 70
- MacD flows under the signal line
In this case, we can enter a sales position for $ 25,000. Since the price continues to drop, our MACD line would probably go under the signal line, which indicates that the trend will probably be continued down.
Diploma
The trade in RSI and MACD cryptocurrencies can be a powerful instrument to identify trends and potential shopping or sales signals. By adapting the parameters, with a longer time frame and in view of the overlapping indicators, retailers can increase their chances of success in this fast development market. However, it is necessary to remember that not a single indicator is a reliable and well -informed business strategy that should always be combined with a basic risk management analysis and techniques.
