market analysis

Regardless of the strategy chosen by the user, working on the stock exchange always follows the usual algorithm: before opening a transaction, the trader assesses the probability of reversal or continuity, determines the moment of entry, and only then orders.

The outcome of the work depends on the accuracy of the pre-market research. It is necessary to understand how the exchange rate changes. In addition to the basic analysis, which includes the study of political and economic news, a trader performs the technical analysis.

It is based on the study of the history of cryptocurrency quotes. The dynamics of the exchange rate are believed to be cyclical and the growth and decline of demand are naturally repetitive.

Indicators or special mathematical formulas help a trader to predict price movements. All major indicators are calculated automatically on the trading platform. For the convenience of traders, they are located directly on or adjacent to the course chart.

What are the indicators and signs to pay attention to first?

Currently, with the development of the financial sector, the number of instruments, including the crypto market, is growing, says Artem Deev, Head of Analytics at AMarkets. In his opinion, it is better for any trader, regardless of professional level, to start and use the following classic tools regularly:

Sales volume (volume)

The volume reflects the level of interest of investors in the market, showing the number of transactions for a specific period of time. The volume chart contains the green and red “candles”: the first indicates a decrease in market volume, the second an increase. By analyzing the volume index with the price chart, you can confirm or reject the trend and predict a sharp price change: as the price chart rises and as the volume increases, an increase in volume indicates a price drop as the volume rises. A low market.

Moving averages

The moving average (MA) analyzes the average price over a period of time. The MA chart is superimposed on the current price movement chart, giving a relative idea of ​​the price trends. If the current price of a cryptocurrency remains above the moving average for a long time, we can assume its further growth. If the actual price is lower than the moving average, this is a signal to reduce.

Exponential moving averages

EMA is a general type of movement that prioritizes the latest data to help determine the direction of the trend more accurately. That is, it helps to predict the medium term.

Moving average convergent deflection (MACD)

MACD is a moving average convergence-divergence index. Positive MACD shows an increase. The inclination of the curve to the upper signal line means a good time to buy, it is called a bullish crossover. Negative MACD indicates a decline.

Relative Strength Index (RSI)

The relative strength index indicates whether the market is overbuying or over-selling. Encryption indicates its weakness or strength through a previous change in the price of the currency. These differences indicate whether the asset has been over-purchased or over-sold.

Fibonacci levels

Fibonacci levels help predict entry and exit points, telling the seller of opportunities to sell or buy an asset.

From simple tools to professional

Need to understand indicators and what they show and what trademarks they generate. After that, all indicators will be easier for the trader, confident BitRiver financial analyst Vladislav Antonov. According to him, the trader first sorts through all the indicators he likes, and chooses three of them, on the basis of which the trading system is written.

Analysts advise not to use more than three indicators, as conflicting signals will not allow you to enter the market. He explains that the simpler the system, the cheaper it is.

To analyze the market, you can use the chart display in tic-tac-toe form or in clusters, says the expert. He explained that price bars can be built according to volume.

Traders often rely on the moving average, said Andrey Podolyan, CEO of the Cryptorg platform. The expert also noted indicators such as RSI, and MACD, which can be used to determine high buy/sell levels, as well as divergence and convergence indices that indicate the end of market volatility and volatility.

Podolyan noted that there are many self-written indexes. He explained that exchange and broker trading terminals are now strongly integrated with the TradingView service (trading tool), so anything can be displayed on the chart.

Stock market impact

Andrey Podolyan, CEO of the Cryptorg Platform, says that market principles apply to the highest levels of liquidity, such as the stock/currency market. He said many traders working in standard markets are already actively trading cryptocurrencies and, accordingly, are following those rules.

According to the expert, inter-market analysis is required for cryptocurrency trading as it requires an integrated approach.

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