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How to analyze the action of the cryptocurrency price using trendy lines and indicators
Cryptocurrencies have been a popular investment vehicle for many years, while the value of bitcoins has reached its high values in 2017. However, the cryptocurrency market is known for its volatility and unpredictability, therefore it is difficult to predict prices movements . One of the effective ways to analyze prices in cryptoms is the use of trendy lines and indicators. In this article, we will examine how to apply these technical analysis tools to improve your understanding of cryptocurrency markets.
What are the trend lines?
The trend lines are graphic representations that connect two or more points in the graph and show the direction of prices over time. They can be horizontal (based on medium reversion) or vertical (according to the moment) and help identify the general trend on the market. In markets with cryptoms, trendy lines are particularly useful for identifying twists and turns and confirming departures.
Which indicators can be used?
There are several indicators that can be used to analyze price events in cryptoms:
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- medium diameters : average prices in a particular period of time showing trends and help to exterminate volatility.
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- Macd (divergence of the convergence of the sliding diameter) : oscillator, which portrays the difference between two movement indicators, identifies trends and potential interruption.
How to use trendy lines and indicators
Follow the following steps to analyze the action of the cryptocurrency price using trendy lines and indicators:
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3 ** Lines of graphic tendencies: Draw the horizontal and vertical trend lines on the graph, using the same color scheme for both lines to simplify the resolution.
- Set the indicators : select the favorite indicators and set it on a graph with specific parameters (e.g. RSI levels or Macd signals).
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* Trendy direction : Show a clear trend line or a reduction tendency?
* STEPS
: Are there symptoms of twists and turns or potential departures based on RSI, MacD or Bollinger bands?
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Advantages of trendy lines and indicators
The use of trendy lines and indicators can provide traders and investors several advantages:
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- Increase in trust : with trendy lines and indicators, you will have a better understanding of the general management and market dynamics.
- Reduced risk : Trendy lines can help identify potential perversions and departures, reducing the risk of significant losses.
Conclusion
Cryptoms are intrinsically unstable, so it is difficult to predict price movements. Using trendy lines and indicators, it is possible to better understand the dynamics of the market and make more informed company decisions. Make sure to always set realistic expectations and adapt your strategies based on your analysis. With practice and patience, you will become the ability to apply these technical analysis tools to improve your encryption operations.
