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cryptocurrency: technical analysis for beginners: Optimism (OP) and commercial index guide
As the first decentralized digital currency in the world, Bitcoin is a revolutionary of how we think of money and trade. With its volatility, unpredictability and rapid growth, cryptocurrency trade can be exciting and intimidating. In this article, we will deepen the basic concepts of a beginner technical analysis, focusing on optimism (OP) indicators and key trade indicators.
What is technical analysis?
Technical analysis is a method of analyzing financial data to predict price movements. This includes a chart, tred and model test to identify potential purchase or sale signals. This approach differs from the fundamental analysis, which focuses on the true value of the active and the underlying economic factors.
Optimism Indicator (OP): Guide for beginners
Optimism Indicator (OP) is a popular technical analysis tool used to measure the trend strength. This indicator, developed by Peter S. Goodmens in 2002, is based on a simple but powerful concept:
“Optimism = (1-Momento in the short term) + (short-term pulse x strength)”
Simply put, optimism measures how much impulse still exists in short -term security trends while explaining its durability. When the OP indicator falls below 0%, this indicates that the trend has lost the impulse and may change.
How to use Optimism Indicator (OP):
- Select the technical indicator: Select the appropriate technical indicator, such as a stochastic oscillator or the relative resistance index.
- Calculate the short -term moment: Calculate the short -term pulse by dividing the current price with a simple mobile average (SMA) in 3 periods.
3
Strongly combine: Add the short -term calculated moment to the value of its strength.
- Apply OP rule: If the optimism indicator falls below a certain threshold, this is a purchase signal.
Commercial Indicators: Guide to Beginners
Now that the Optimism Indicator (OP) is dominated, we will immersed in the main trade indicators used in cryptocurrency trade:
- Stochastic oscillator (period 14):
* Buy when stochastic %K exceeds 20 and stochastic d %d %is less than 20.
* Sell when stochastic %K is below 20 and %of the stochastic D is greater than 80.
- RSI (relative force index) (period 14):
* Buy when RSI % fall to the lowest bollinger bar and RSI % is greater than 70.
* Sell when RSI % increase to its upper bollinger and rsi % for the band less than 30.
- Bollinger Stranes:
* Buy when the price is broken through a lower lane, indicating a possible investment.
* Sell when the price is broken through the upper lane, indicating the continuation of the trend.
Combining Winning Strategy Indicators
To create a comprehensive commercial plan:
1
Use the indicator combination: Combine optimism (OP) with stochastic oscillator indicators and RSI indicators to identify potential purchase or sales signals.
- Adjust the parameters: Customize the indicator parameters such as windows and threshold dimensions to adjust to their conversation strategy.
3
Set stop losses and take profit levels: To protect investment, determine a clear loss and profit.
Conclusion:
Trade in cryptocurrency can be an exciting but challenging inexpressive. Dominating technical analysis using optimism (OP) indicators and key trade indicators, such as Stochastic oscillator, RSI and Bollinger bands, will be on the way to the winner’s strategy. Remember that technical analysis is just a tool among many traders used to make deliberate decision -making.
Remember:
- Always create real expectations for your deals.
- Change and customize your strategy as market conditions change.
- Never invest more than you can afford to lose.