Must-see for beginners! These three indicators can help you save 90% on tuition fees (a painful summary)
Don't use technical analysis to mess around! Just focus on these three indicators: RSI, MACD, MA! If used well, you can avoid 80% of the pitfalls. Today, I will teach you step by step how to be the harvester instead of the chives!
First: RSI
What exactly is RSI?
It's like calculating the "stamina" of a price! Over 70 means it has risen too much and needs to rest, below 30 means it has fallen too far and is due for a rebound, 50 is the dividing line!
Here's how to use it without crashing:
• See RSI > 70? Don't chase the rise! Prepare to run away!
• RSI < 30? Don't cut losses! It's time to buy the dip!
• RSI crosses above 50? Quickly hold on to the main uptrend!
Second: MACD
What does MACD look at?
Look at the "golden cross and death cross" of the fast and slow lines! When the fast line (12-day moving average) crosses above the slow line (26-day moving average), it's a golden cross, a buy signal; when it crosses below, it's a death cross, time to run!
• Golden cross appears + histogram turns red = go all in!
• Death cross appears + histogram turns green = clear out and run!
• Notice MACD diverging from the price? A reversal is coming! For example, if the price makes a new high but the MACD histogram shortens, that's a top divergence, and a crash is coming!
Don't use ultra-short cycles like 1 minute or 5 minutes! They are all false signals! At least look at 1-hour or longer K-lines!
Third: MA (Moving Average)
How to use the MA line?
The 50-day moving average is a medium-term trend line, and the 200-day is the dividing line between bull and bear markets! Go long when the price is above the line, and short when below!
Here's how to use it without being timid:
• 50-day line crosses above the 200-day line = golden cross, go all in!
• 50-day line crosses below the 200-day line = death cross, clear out and run!
• For short-term, use the combination of 9-day EMA + 21-day EMA, a pullback is a buying point!
In a volatile market, the MA line is just a lagging indicator! It must be used in conjunction with RSI or MACD!
Buy signal:
Price above the 50-day moving average, RSI below 30 and turning upwards, MACD shows a golden cross.
If all three conditions are met, go all in to buy the dip!
Sell signal:
Price below the 50-day moving average, RSI above 70 and turning downwards, MACD shows a death cross.
If two signals appear, clear out, don’t hesitate!
All indicators are lagging! Real experts only look at price action! But these three indicators are enough to help you beat 80% of the chives! Now click ❤️ to save, and use it for evening reviews!