1% make’s life changing gains because of knowledge
I’ve lost over thousands of dollars at the start before I learned indicators
Here’s how to use them for accurate market predictions.
▻ Indicators are not just tools or an extra feature, they are your eyes in the market
▻ If you don’t use indicators, your trading is just a lottery based on luck
▻ They help you build the right strategy based on facts, not intuition
▻ Next, I will go over key indicators for market predictions:
- MACD - shows trend and momentum changes in the market
- RSI - helps identify overbought and oversold assets
- Moving Average - helps understand the overall direction of the trend
▻ RSI - Relative Strength Index
▻ RSI measures the speed and change of price movements, helping to determine whether an asset is overbought or oversold.
▻ The indicator ranges from 0 to 100.
▻ When RSI > 70 - the asset is overbought, when < 30 - oversold.
▻ Key RSI levels:
▻ RSI > 50 - average gains are higher than average losses over a certain period, indicating a potential market rise.
▻ RSI < 50 - average losses outweigh average gains, the market is likely heading down.
▻ 200-day RSI > 50 - the market is likely in an uptrend, a signal to buy.
▻ RSI - Practical example:
▻ Bearish divergence: the price of $BTC on the chart reached $69,000, but RSI made a lower high - a signal to sell.
▻ Bullish divergence: when the price of $BTC dropped to $15,479, but RSI made a higher low - a signal to buy.
▻ MACD - Moving Average Convergence Divergence
▻ MACD is one of the most popular indicators for determining the direction of the trend.
▻ This indicator measures the difference between two exponential moving averages (EMA) and can show trend changes.
▻ How does MACD work?
▻ Bullish Signal: when the MACD line crosses the signal line from below upwards. This often precedes the start of a bullish trend.
▻ Bearish Signal: when the MACD line crosses the signal line from above downwards. This is a signal for a potential price drop.
▻ MACD: Practical example
▻ Bullish Divergence: Price falls to 108.26, but MACD rises - a signal to buy.
▻ Bearish Divergence: Price reaches 15.00, but MACD does not confirm a new high - a signal to sell.
▻ Moving Average (MA)
▻ Moving Average is one of the primary indicators for determining the direction of the market trend.
▻ It smooths out price fluctuations and helps see the general market direction.
▻ It has two main types: SMA (Simple Moving Average) and EMA (Exponential Moving Average).
▻ Key MA points:
▻ EMA is more sensitive to recent price movements, ideal for short-term strategies.
▻ SMA is more stable, better for long-term analysis.
▻ Practical example MA:
▻ When EMA (10) crosses SMA (50) from below upwards - it’s a buy signal.
▻ When EMA (10) crosses SMA (50) from above downwards - it’s a sell signal.
▻ How to build a strategy using indicators?
1. RSI helps determine whether an asset is overbought or oversold.
2. MACD shows trend changes and can confirm signals from RSI.
3. MA can be used to determine the overall market direction.
▻ Indicators give you the precision to work with in the market, not relying on intuition.
