Trading requires tools for success
Including the indicators provided by Binance for free to all users
Which measure and read candle movements and give you the results
The top three indicators :-
1 - Relative Strength Index (RSI)
The RSI indicator moves between 0 and 100
The indicator is considered in the overbought area when above 70, and in the oversold area when below 30.
Positive divergence appears during the downtrend when the price continues to decline while the RSI starts to rise
This indicates weakness in selling momentum, which may suggest a potential reversal in direction or at least a temporary upward correction.
Negative divergence appears during the uptrend when the price continues to rise while the RSI starts to decline
The higher the RSI value, the more significant and stronger this divergence becomes.
2 - Moving Averages
This chart displays Japanese candles with 10, 20, and 50 moving averages + RSI indicator
A buy signal appears when the price breaks above the moving averages and the RSI exceeds 55
Profits are taken when the price closes below the moving averages
RSI is also used to identify oversold and overbought areas
Moving averages
The chart displays a buy setup
The price is moving above 3 moving averages (think of them as smooth lines representing recent trends),
This indicates that the market is in an upward condition
The RSI indicator, which measures momentum, is above the 55 level, confirming strong buying power.
Moving averages
Sell Confirmation
The price is moving below 3 moving averages, indicating a downtrend
RSI is below level 45, indicating that sellers are in control
For beginners: When both indicators show weakness, it is a signal worth considering for selling.
Moving averages
This chart confirms a selling pattern using the RSI and moving averages
The RSI reached the overbought area, and at the same time, a negative crossover occurred between the 20 and 50-period moving averages, indicating a potential reversal in direction
The convergence of these signals gives us a clear confirmation for selling.
3- MACD Indicator
Signal Line: The MACD line is drawn alongside a 9-day moving average of the same line
The histogram: Represents the difference between these two lines (MACD and Signal Line)
Traders use the MACD histogram to predict changes in market momentum.
MACD Indicator
When the MACD line crosses above the signal line, it is considered the start of a new trend
Falling below the signal line indicates a selling wave.
While rising above it indicates the entry of a buying wave.
MACD Indicator
Divergence occurs in MACD when the asset price begins to move in a direction different from the MACD indicator
This indicates a potential reversal in the current trend
We can observe this divergence either in the MACD histogram or in the MACD line itself.
The GBPUSD pair price is rising, but at the same time, the MACD indicator shows a decline
This is what we call MACD Divergence
When divergence appears on the MACD chart, it may be a potential signal for an upcoming buying or selling opportunity