Trading Indicators in Crypto

There are many different types of trading indicators but for the most part they fall under the two categories of lagging and leading indicators.  Leading indicators focus on predicting the future price of a crypto currency. Leading indicators provide a signal ahead of time to predict the price and the momentum the graph will go in. Lagging indicators pay attention to what price actions used to be like from past days and months.

Trending indicators

A subset of lagging indicators, this indicator gives an objective measure of an assets price movement to give the strength of a certain trend. Trending indicators smooth out price data and are represented by a single line which helps crypto traders find the best times to enter and exit a trade

Volume indicators

Volume indicators get used to find out the strength of a trend and is used to confirm the direction that a trend is heading based off the current volume of trades. Higher volume means the prices will stick to an upwards trend and if the volume is low the trend may be heading over a cliff. 

Volatility indicators

The volatility of the crypto market is no joke and a volitility indicator can measure the rate that the given price of a crypto token changes and when the market has higher volatility due to fast price changes, crypto traders are able to use them to find the right moment to buy or sell.

Oscillator indicators

Other wise known as momentum indicators, these leading indicators are used to predict a possible trend in terms of the speed of the price movement that is yet to come. it does so by comparing the prices over time. this type of indicator moves between two limits to gauge the trends strength and momentum. Overall oscillator indicators help traders understand when a market is overbought or oversold.

MACD

MACD or the Moving Average Convergence Divergence is an indicator consisting of two different moving averages. It helps calculate the direction, length, and strength of mementum. because it uses moving averages it is a lagging indicator that follows trends.

RSI

The RSI or relative strength index consits of 3 lines, the one in the middle is the actual RSI indicator and traders can use it to estimate if an asset is overbought or oversold. the RSI goes from 0 to 100 and is calculated based of the 14 recent periods using the average of upward or downward price changes. the lower the value of the RSI indicator the more an image is oversold and the hgiher the number the more its overbought with an average being 50.

Bollinger Bands

These very popular indicators are very precise in highlighting volatility. The bollinger bands consist of three bands that overlay the candlestick chart, the middle line is the moving average of the last 20 periods, the upper band is the value of the middle lines +2* standard deviation of the price and the lower line is the value of the middle line minus 2* standard deviation. the distance between bands depends on the volatility of the price and these indicators are used to indicate if an asset is overbought or oversold and high and low points.