What are the best technical indicators for day trading?

the best technical indicators

October 4, 2020

Reading Time: 4 minutes

With over 6000 cryptocurrencies accumulating a whopping $366 trillion in market capitalisation, The crypto market is rapidly emerging, considering the market being a little over a decade old.  The emergence of the industry and the infamous volatile Crypto market has attracted several investors and traders to shift to crypto trading, especially when governments, banks, financial institutions, and transaction giants are integrating the technology into their services.

The Cryptocurrency market’s notoriously volatile market has played a crucial role in providing opportunities to traders and it has surged into the spotlight for millions of day traders in recent years.

Interestingly, Day Traders have accumulated billions in profit through crypto trading; Today there is an array of diverse indicators available in the world of trading. Day traders use common conventional trading strategies to take advantage of varying price fluctuations.

The compatibility of various conventional methods has allowed seasoned traders to transition into the platform; However, the aggressive movements of the cryptocurrency market constitutes to trends that only experienced and seasoned traders can pick out. This is because Cryptocurrency market indicators are no different and what works in other markets should work exceptionally well in the Cryptocurrency market.

While most traders or upcoming investors are led to believe that the cryptocurrency market movements are random, that’s not the case. Cryptocurrencies inherit similar tenets as traditional assets such as Dow’s theory. Cryptocurrency markets and their price movements are dependent on several factors, including reputation, manipulation, volume, news, emotions, and more. There isn’t much to day trading secrets. While 95% of day traders lose money and fail, we’ll show you how to approach cryptocurrencies with indicators and develop an eye for quick profit opportunities.

These indicators establish a sound trade thesis. Therefore, trading cryptocurrencies requires a set of solid fundamentals tailored with a deeper understanding of how the market works.

In this article, we’ll be discussing some of the best technical indicators that we utilize in our crypto trading strategies to provide some of the more profitable calls to our valued users. We’ll dissent why we use Technical indicators, and how we utilize them.

How to do successful day trading

Successful day traders have developed unique strategies that fit into their level of expertise. Behind every successful day traders is years of dedicated and extensive experience that constitute to both their success and failures.

The behind how to do successful day trading is research. Developing a deeper understanding of the market rooted with years of experience, and command over fundamentals are essential. Day traders actively utilize various forms of technical analysis to generate innovative and profitable trade ideas.

One day trading secret is the extensive use of Technical indicators. Technical indicators are established on an infrastructure of computational algorithms and statistical models that illustrates trends in raw market data.

Day traders utilize the intrinsic details found in illustrations of raw market data into their trading strategies and decision making. Consequently, Technical indicators allow day traders to make data-driven, calculated, and precise decisions by thoroughly assessing illustrations displayed by these models and algorithms. Indicators are pivotal in determining assets, especially in aggressively volatile markets when one wrong move could be very grim.

There are several types of Technical indicators, categorized amongst the following:

  1. Trend assessing indicators
  2. Momentum Indicators
  3. Volatility indicators

The indicators mentioned above are categorized with respect to their functionality, features, and utilization in correspondence to the nature of the market or trade. Trend assessing indicators are utilized by traders to measure the strength of trends displayed by assets. Momentum indicators evaluate the strength of price movements with respect to their history. And volatility indicators illustrate the potential volatility of an asset.

Here are some of the best indicators’ day traders use to develop their understanding of the market.

Moving Average

Moving Averages is the most commonly utilized technical indictor by day traders and crypto traders. Moving averages serves as a Trend assessing indicator; it evaluates the strength of the trends displayed by assets. The aggressive market movements found in Crypto markets illustrate various trends over a day; therefore, technical indicators such as Moving averages can accurately assess closing prices and exponential averages in an interval. Day traders make several traders during the day; hence Moving averages are quite useful when calculating averages and closing prices in a short period.

Moving Average Convergence Divergence

The MACD or Moving Average Convergence Divergence technical indicator is a more sophisticated version of the Moving Average technical indicator. The MACD is tailored with trend assessing traits and oscillators. The MACD indicator is quite powerful when comparing two moving averages. Moreover, The MACD indicator evaluated trends in aggressive markets by illustrating price movements with Histograms.

Relative Strength Index

The Relative Strength Index or RSI is the most popular day trading technical indicator. The RSI technical indicator allows traders to analyze price changes to evaluate if the asset is overbought or oversold. RSI plays a pivotal role in assessing assets and predicting market corrections and price resistances.

Bollinger Bands

Bollinger Bands are established on top of the classic Moving average technical indicator;  however, Bollinger bands are used to evaluate market volatility. The Bollinger band illustrated simple moving average and their standard deviations. The Standard deviation calculated the volatility illustrated by assets. In Bollinger bands, as volatility increases the Standard deviation bands diverge and vice versa. Traders utilize Bollinger bands in their trading strategies when trading cryptocurrencies. One notable example is the Bollinger squeeze.

Conclusion

Technical indicators integrate raw market data over an interval to illustrate trends accurately illustrate trends. Technical indicators play a crucial role in assessing market trends and predicting market directions so traders can make optimal decisions.

A well-defined trading strategy utilizes multiple technical indicators, computational models, and algorithms to provide profitable insight. We use some of the best and commonly used technical indicators to deliver profitable crypto trading signals to our valued ParadiseVIP members.

1 Comment

  1. ONLY Swing

    I soooo can’t wait for the article on Swing trading. @MyCryptoParadise do you have strategies for swing trades too?? I get to anxious staying in the market to watch every single dip or rise. A signal that can take care of this once or twice a week is so going to be helpful.

    Reply

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