When you look at charts you always have to think about the story that is happening behind those candle bars. The thing is that not always so easy to understand the language of what is behind the charts. One of the ways to decode that language is to use trading indicators. At SkyRocket trade you will find plenty of them – that’s why we like our platform to be called the most professional trading toolkit. Thanks to these indicators you will know when to buy or sell certain crypto. In this SkyRocket Basics lesson you will learn about the most basic indicators that any trader should know. Let’s get to it!
Lest start with the easiest or at least most basic indicator – Moving Average (MA). This is one of the indicators that can help you determine the trend. In other words by using MA you might find the perfect place where the levels of support and resistance are.
The technical part of moving averages is simple. It is basically a tool that is showing us average price that is constantly updated. We can set the timeframe of the average price as we wish. Moving average live will smooth the price chart but remember the shorter timeframe for MA you will set the move volatile the MA line will be.
As said before moving average can show us a place where the trend is changing, therefore enter or exit market position. The basic move withing Moving Average is enter the market when we see uptrend in the crypto asset crossing the moving average than we can expect price moving up. Same goes to the situation when coin is going down and it bounces down after the hitting MA that is going down.
When you long on the uptrend you can set a stop loss below the moving average to protect your capital. When the Moving Average rises you can set a stop loss higher. You can automatize the process by using one of tools – SkyRocket Sell.
Different strategy is using two MAs on the same chart – shorter and longer one. Usually when the short term one is crossing the longer one you can see it as a Buy signal. This bullish market situation is called Golden Cross
Otherwise, if the shorter Moving Average is one is crossing below the longer MA, it might mean that the trend is shifting. This bear signal is called Death Cross.
Before described indicators and enter/ exit positions are just tools to predict the moves of the market – always remember to use stop loss and adjust the strategy to the market.