How to combine trading indicators

trading indicators

6 min reading

There are myriads trading indicators in the crypto world… But how to use them in practice? How to combine them and apply them to strategies? Discover in this article.

How to combine trading indicators?

Introduction

Traders may now use a variety of stock indicators to properly examine the cryptocurrency market and receive the appropriate signals. Cryptocurrency trading also entails the use of indicators to determine when to enter and quite a deal for optimum profit. To trade cryptocurrencies more efficiently on the exchange, it is sufficient to understand and combine no more than 2-3 technical analysis tools. This will produce a better outcome than manipulating a large number of various indicators without knowing their purpose. In this article, you will discover how to combine two or more indicators trading on different strategies.

Why trading indicators are important

As a rule, professional traders analyze the present condition of the market and the prospects of price fluctuations (trend) of a certain trading instrument. Fundamental and technical issues are inextricably linked, yet the techniques of effect on prices differ. As a result, a cryptocurrency examination comprises at least two distinct dimensions: fundamental and technical. Thus, trading indicators have already demonstrated their worth in the currency and stock markets.

First of all, technical indicators advise traders on when it is best to begin or cancel a position. People apply many sorts of technical indicators for various trading approaches. Some techniques are useful for long-term investments, while others are suitable for scalping or day trading. Based on the strategy chosen, the trader uses indicators that most effectively assist in evaluating existing trends and forecasting price movement.

What is Scalping?

Scalping is a trading strategy that focuses on the advantage of small price swings in cryptocurrency trading. The trader launches a large number of short deals to profit a few points. There is no time for complete and exhaustive market research or long timelines – it is important to act immediately. That is why scalpers employ indicators to hasten up decision-making. They allow you to appraise the issue quickly and respond without excessive contemplation. Besides, scalping is not the easiest method for inexperienced crypto traders, but it may provide good rewards with reasonable risk management.

Indicators in Scalping

Scalpers frequently use indicator combinations that supplement one another. Traders must identify at least two key parameters: support/resistance levels and trend. Using support and resistance levels, you can determine when it is the perfect moment to begin and exit trades. When the price touches the lower limit, it is a buy indicator, and when the price bounces off the higher barrier, it is a sell signal.

The combination of indicators with a trailing signal, such as Moving Average or Bollinger Bands, with leading indicators, such as Stochastic or RSI, is quite popular. You can find all the detailed information about mentioned trading indicators on Bit4you Academy.

Furthermore, Moving Averages crossings can suggest shifts in both local and global trends. The Volume indicator will also aid in the formation of the market picture by indicating a bearish and bullish trend. For example, if the indicator shows a red one but the chart shows a green one, it suggests that the bears’ dominance is waning and the price is ready for a breakthrough.

Of course, you can use technical indicators in scalping, but their signals should be seen as a range of possible transactions. Profitable scalping is only feasible with the use of trading techniques that combine other technical tools.

What is Swing Trading?

Swing trading, along with day trading and position trading, is one of the most popular trading strategies. For novices, this type of trading is preferred since it moves at a much slower pace than day trading, allowing the trader to spend more time monitoring each position and determining the optimum entry point. Swing trading positions are kept for an extended period and might be open for days or even weeks.

A swing trading indicator is a technical analysis tool that is based on historical data and performs mathematical calculations to determine various elements of price movement. A swing trading indicator is any technical analysis indicator that appears on the chart to assess market dynamics. Technical analysis indicators assist traders in determining if a trend is bullish or bearish and how it will behave in the future.

Indicators in Swing trading

Tendency, momentum, and volume are the three most essential forms of indicators for swing trading. (Read about them here in our Academy section). However, technical analysis elements may differ, but all of them, such as the Moving Average indicator or MACD, should help to detect the trend. Using the Moving Average (MA), you can detect an uptrend’s support level and a downtrend’s resistance level. In addition, use Fibonacci Levels to set price goals and spot retracements.

The crossing of the fast and slow MA lines below the MACD zero level will be a buy signal. Simultaneously, the fast-moving average must cross the slow MA from bottom to top indicates a price reversal to growth. A downward crossover of the slow MA indicates a sell signal. However, this crossover does not have to be above the MACD zero level.

What is Trend Trading?

The direction in which the price of crypto-assets swings is referred to as the trend. The downward trend is commonly referred to as the bear market since it is denoted by a red column on charts and descends to the bottom. The rising tendency, known as a bull market, indicates that the price of cryptocurrencies rises.

Indicators in Trend Trading

Moving averages, MACD, and Stochastic RSI are three of the most used trend indicators. During an upswing, the price climbs in a narrow channel in a staircase and may slightly exceed its boundaries. And, on average, each local minimum is higher than the one before it. In a downtrend, a breakdown of the resistance level is the time to start trading. A breakthrough, on the other hand, can occasionally be deceptive. If the price instantly reverses after the breakthrough and returns to its previous position, this might indicate a false breakout. At this moment, it is better to wait for the trend to become evident.

How to combine indicators on bit4you?

Important to note that you can easily apply indicators on bit4you trading terminals. For this, you need to log in to your account and click on Markets. After choosing the particular asset, switch from Simple chart to TradingView. By the way, you also can move to advanced mode. Then, choose a technical indicator from the drop-down list “Indicators”. It will display on the chart. We recommend using no more than two or three at once.

However, some traders believe that technical indicators are not as effective as they should be. So, let us remind you that technical indicators are not meant to accurately predict potential price movement, but they may assist you in making the best decision based on an in-depth market study.

Conclusions

Cryptocurrency trading also necessitates the use of indicators to identify when to enter and exit a trade to maximize profit. Technical indicators do not completely predict upcoming price movement, but they may help you make the best decision based on comprehensive trend analysis.
The combination of indicators with a trailing signal, such as Moving Average or Bollinger Bands, with leading indicators, such as Stochastic or RSI, is quite popular for scalping.
Tendency, momentum, and volume are the three most essential forms of indicators for swing trading.

5 min reading

candles in trading

Imagining how to read candles in order to have perfect anticipation on a chart? This article is for you!

October 22, 2021December 6, 2021

4 types of indicators

3 min reading

Have you ever known about tendency, momentum, volume, and volatility? It is time to find out!

4 types of indicators: tendency, momentum, volume, and volatility

Price moves in the cryptocurrency market, like those in any other market, are not random; rather, they frequently reflect long-term and short-term trends. Cryptocurrency traders apply technical analysis to try to identify and react to these trends. Traders, relying on technical indicators, place more emphasis on coin price changes than on fundamental factors. However, fundamental aspects also have a huge impact on price rates. While a variety of factors might influence the value of a cryptocurrency, technologists pay close attention to supply and demand.

What are technical indicators?

Indicators relating to financial instruments are displayed using technical indicators. Usually, they are based on price, volume, on-chain data, open positions, social indicators, or any other metric. Using technical indicators, traders choose the right moment to enter the market and make a profitable deal. Important to note, that there is no tool to guarantee a 100% profit since indicators are just helping tools. Moreover, with the help of technical indicators, traders can forecast the price movements or understand the current market situation. For now, there are available 4 types of technical indicators such as trend, momentum, volume, and volatility indicators.

Trend

Trend indicators allow you to predict the emergence of a trend and its direction. It is important to know which way the price is moving at any particular time. In the crypto market, trends are local and global. Global patterns are appropriate for medium- to long-term trading. The key goal is to recognize an uptrend when traders observe a series of higher highs, and a downtrend when they see a series of lower lows. Also, if the indicator shows that the price is above the indicated average, it is a good sign for a bull market; if the indicator shows that the price is below the stated average, it is a negative sign for a bear market. Moreover, trends include such well-known indicators as Moving Averages (Simple AM and Exponential AM), MACD, KAMA, etc. This isn’t a complete list of trend indicators. We always specify which group this or that indicator belongs to in our Academy articles.

Momentum

Momentum indicators assess and demonstrate the extent of price tendencies. What exactly is market momentum? In non-scientific terminology, it is a measure of the pace at which prices change. Momentum analyzes the rate of price rising or falling. As a result, they are typically used in the short-term analysis by traders looking to capitalize on volatility surges. The trader’s purpose is to enter the market when momentum is high and leave when it is low. When volatility is low, prices tend to stay in a limited range. When volatility rises, price frequently makes a large momentum surge outside of the range. The momentum indicator is the gathered category of such indicators as RSI, Stochastic, Stochastic RSI, MACD (this one describes both trend and momentum), etc.

Volume

Trading volume is also significant in determining trends. Significant trend developments are typically accompanied by large trading volumes, while weak trend developments are typically accompanied by low trading volumes. When a crypto-asset declines in value, the first thing to do is examine the volumes that accompanied the decline. Long-term uptrends are typically characterized by high increase volumes and low drop volumes. It is also critical that volume growth maintains its speed. When trade volume falls while crypto-asset prices rise, the uptrend is likely to terminate, and vice versa. Indicators of volumes include OBV, Price Volume Trend, Volumes, etc.

Volatility

Volatility indicators measure the range and speed of price movement based on an average directional value. In other words, they illustrate how quickly and in which direction price is moving in comparison to the average chart. This type of indicator is useful when you need to evaluate the volatility of an asset while prices are moving in either direction and give a range of price points based on the risk of breaking those points. As you may already know, the cryptocurrency market is extremely volatile, so volatility indicators will be quite efficient. Therefore, this category includes Average True Range, Bollinger Bands, Historical Volatility, etc.

How to use it on bit4you

The bit4you trading platform is pleased to provide its customers with the most variety of trading indicators to facilitate cryptocurrency trading. Therefore, knowing what types of indicators are, you can easily identify the best for you and build the most convenient strategy. All necessary tools you will find in the Indicators section in the trading terminal. Reading educational articles about the indicator you are interested in, you find all the information about it and how to use it on the bit4you website.

However, traders can apply a variety of indicators, and the one they select is primarily determined by their specific trading approach. To make that decision, you must first learn more about indicators, which is what this article is about.

Conclusions

4 min reading

Moving averages

Do you want to profit from trading cryptocurrency? Then let's get acquainted with one of the technical analysis tools such as Moving Averages.

October 22, 2021December 6, 2021

OBV

4 min reading

What is an On Balance Volume indicator and how to use it on bit4you described in this article.

OBV

In 1963, Joseph Granville, a famous trading theorist and practitioner, introduced the On Balance Volume trading indicator in his book “A New Stock Market Strategy”. Nowadays this indicator is still relevant and remains one of the most popular ones. In this article you will learn about the On Balance Volume indicator, how to use it, customize it, identify signals, open and close positions.

What is an On Balance Volume indicator (OBV)

The balance volume is the simplest, elementary technical indicator that characterises the dynamics of trading volume. Its peculiarity is that the indicator does not interact with the price, as always, indicators apply, but operates directly with the trading volume, using close-out prices indirectly only. The indicator has an accumulative effect and is used in technical analysis to estimate the pressure exerted by buyers (bulls) and sellers (bears) on the market. This indicator is one of the first indicators, evaluating positive or negative financial flow, connected with trading. Subsequently, analysts began to use it extensively, to get signals based on OBV and price divergence, as well as to confirm a trend.

How to use it on bit4you?

To understand how to apply this indicator you will need a trading platform. Let’s explore it on our bit4you trading platform. First, you need to choose the asset you are looking for and a price chart for the specific timeframe will appear. The OBV does not give unambiguous signals on its own, but only confirms the signals of other indicators. The quantitative value of OBV is not as important as its directionality. Graphically, the indicator looks like a curve displaying the change in accumulated amount as described above. So how should it be used? If you need to calculate the balance volume, the first thing to do is to check today’s closing price against yesterday’s closing price. Then you can add today’s volume to yesterday’s balance volume, assuming today’s close is higher than yesterday’s. However, otherwise, you will have to subtract today’s volume from yesterday’s. You can only change nothing if today’s closing price corresponds to yesterday’s. You can only change nothing if today’s closing price corresponds to yesterday’s.The graph clearly shows how the graph of balance volume corresponds exactly to the graph of price. If the balance sheet volume increases at the same time as the price, it indicates the strength of the trend to a large extent, as it shows that there is an intensive inflow of capital into the market of this particular instrument. In case you notice a divergence in the price and balance sheet volume movements, become more sceptical of the trend and wait for the indicator to move backwards. In other words, if the price goes up and the indicator goes down, wait for the price to fall and vice versa. However, you should understand that the absolute value of the indicator does not play a significant role. It is more important the direction of the balance volume.

Formula

The formula for On Balance Volume is quite simple. For example, if today’s closing price is higher than yesterday’s closing price, OBV is equal to the sum of previous OBV and volume for the period: OBV i = OBV i-1 + Volume i;

If today’s closing price is lower than yesterday’s closing price, OBV is equal to the difference of the previous OBV and volume for the period: OBV i = OBV i-1 – Volume i;

If yesterday’s and today’s closing prices are equal, OBV is equal to the previous OBV: OBV i = OBV i-1. Where: OBV i – Volume of the current period; OBV i-1 – Volume of the previous period; VOLUME i – Volume of the current candle.

However, the Balance Volume indicator (OBV) is a fairly simple but quite informative and handy tool that allows you to get a clearer picture of where the market is heading. The main advantage of the indicator for trading is its ability to generate lead signals that you can use when building trading systems in conjunction with other indicators. Among disadvantages it is worth noting that the indicator aims mainly at the stock market and in the process of trading it can give out a great number of erroneous signals. In addition, the Balance Volume (OBV) is useful as a tool, providing information for consideration, but not for making trades with it.

Conclusions

3 min reading

4 types of indicators

Have you ever known about tendency, momentum, volume, and volatility? It is time to find out!

October 22, 2021December 6, 2021

MACD

4 min reading

Find out what MACD is and how to use it on the bit4you platform in this article.

MACD

Today traders have a multitude of tools for technical analysis at their disposal – standard and original indicators. From the choice of an indicator or its complex, using which one can unambiguously interpret the character of price chart conduct, decide when it is better to enter the market and close positions, calculate their movement targets and loss fixing levels. All this is seen as a foundation for trading systems and strategies. Moreover, even in standard trading platforms there are effective indicators, such as MACD. For more information, read this article.

What is MACD?

The MACD is a type of oscillator and a technical analysis (TA) tool that traders use. The MACD stands for trend-following, utilising moving averages to detect the stock’s momentum, cryptocurrency or other exchange-traded asset. Before looking at how the MACD works, it is important to understand how moving averages work. A moving average (MA) is a simple line showing the average of the previous price within a particular period of time. When it comes to finance markets, moving averages (MAs) are one of the most general indicators for technical analysis. There are two different types of them: simple moving averages (SMA) and exponential moving averages (EMA). SMAs take into account all of the raw data equally, while EMAs make greater use of the most recent data (newer price points).

How does the MACD work?

To understand how MACD works, you will need a trading platform. Let’s explore it on our bit4you trading platform, using the demo mode initially. Even though the MACD is an oscillator, due to the fact that it has an average value of zero, it does not have any particular limit, as is the case with other oscillators (such as RSI and Stochastic). Because it has no upper or lower limits, you cannot use the MACD to show that the asset is outbought or outsold. Nevertheless, a MACD that is too high indicates a bearish trend and a MACD that is too low can indicate a bullish trend. There are three components to the MACD chart: the MACD line, the signal line and the histogram for the difference between them. For a simple example, a bullish signal emerges when the MACD line crosses the signal line upwards while a bearish signal emerges when the MACD line falls below the signal line. If you find the MACD line above the baseline it means the trend is up, and if it’s below zero it means the trend is down. If the MACD line crosses above the signal line, it is a signal to buy, while if it is below it, prices may start to fall.

Before you start working with the indicator on the bit4you platform, you should pay special attention to the choice of parameters that will allow the analytical tool to function correctly. The MACD settings don’t require much effort. The indicator has 4 main parameters: period of a fast moving average; period of a slow moving average; period of a signal moving average; price value for the calculation. When trading on a downside, the MACD is normally set to a period of 26 for a slow moving average, 12 for a fast moving average and 9 for a signal moving average, and the price for the calculation is the value of the closing candle.

Formula

In calculating three exponential moving averages with unequal periods, we use three exponential moving averages. From the fast moving average with a smaller period (EMAs), a slow moving average with a larger period (EMAl) is subtracted. From these values the MACD line is drawn.

MACD = EMAs(P) – EMAl(P).

The periods given are 12 and 26. The resulting line is then aligned with the third exponential moving average (EMAa), usually with a period of 9, resulting in the so-called MACD signal line (Signal).

Signal = EMAa(EMAs(P) – EMAl(P)).

These two resulting curves form a normal linear MACD. Also in the indicator window there is often marked the zero line, concerning which the curves fluctuate.

History

The MACD, or moving average convergence/divergence indicator, is one of the most well-known and popular classics of technical analysis. Gerald Appel, prominent New York trading expert, developed it in 1979 in order to analyse the stock markets, and it has subsequently spread to other markets such as futures and currency markets. Gerald Appel is known as an author of many books such as “Winning Marker System: 83 Ways to Beat the Market”, “Stock Market Trading Systems” “New Directions in Technical Analysis” and others, as well as his own newsletter “Systems and Forecasts”.

However, despite everything, the MACD, as well as many TA indicators, is not completely accurate and is capable of giving many erroneous and false signals. Especially with volatile assets, poor tendencies or flat price movements. For this reason, most traders resort to applying the MACD along with other indicators, for example RSI, to reduce risk and later confirm signals.

Short Video ex: The Best Times to Use the MACD Indicator

Conclusions

MACD is following the trend by using moving averages to determine the momentum of a stock, cryptocurrency or other exchange asset. There are two types: simple moving averages (SMAs) and exponential moving averages (EMAs).
The indicator has 4 main parameters: period of a fast moving average; period of a slow moving average; period of a signal moving average; price value for the calculation.
Gerald Appel developed the MACD in 1979 for analysing stock markets, and it has since spread to other markets such as futures and foreign exchange.

4 min reading

OBV

What is an On Balance Volume indicator and how to use it on bit4you described in this article.

October 22, 2021December 6, 2021

Stochastic Oscillator

3 min reading

This article reveals another indicator that will blow your mind. Trading simplified!

Stochastic Oscillator

The rise of cryptocurrency has seen the introduction of different technical analysis methods and indicators implemented by traders to determine price fluctuations and the relationship between opening and closing prices. Some of these indicators include Moving Averages, Relative Strength Index, Ichimoku Cloud, etc. In this article, we will elaborate on the stochastic oscillator that is used by traders in stock markets, Forex, and cryptocurrency markets. We will also give relevant information on how you can use this indicator to trade on the bit4you.

What is a stochastic oscillator?

This is an indicator that compares a particular closing price to the prices of the asset over a period of time. George Lane developed this indicator in the 1950s. The term stochastic refers to the point of a current price in relation to the price range over a period. Traders can predict price turning points by comparing the closing price of a security to its price range. To better understand, the general theory of the stochastic oscillator is that a stock’s closing price gets closer to the recent highs on the chart if the trend is moving upwards and closer to the lows if it moves on a downtrend.

Formula for stochastic oscillator

% K = (C-L14/H14-L14) x 100

Where

C = the most recent closing price

L14 = the lowest price traded of the 14 previous traded sessions.

H14 = the highest price traded during the 14-day period

% K = the current value of the stochastic indicator

Basically, stochastic comprise two values: %K (percent-K) and %D (percent-D), with %K providing the indicator while the latter is a moving average of the %K indicator. Understand that these indicators range from 0 to 100. The area above 80 represents overbought conditions, while the area below 20 shows oversold conditions. There is trend reversal when% K line and% D line cross an overbought or oversold region. In other words, the buy signal occurs when the %K line crosses %D line from below the oversold region while a signal occurs when %K line crosses %D from above in the overbought territory.

How to use Stochastic Oscillator on bit4you

Assuming that the user already has a crypto account and wallet and has been trading on the crypto space, this is how they go about using a stochastic oscillator on bit4you. Every trader should understand that stochastic uses a standard period of over 14 days. These days can be adjusted based on the analytical needs. To calculate a stochastic oscillator, subtract the low for the period from the currency closing price, divide the total range for the period and then multiply by 100.let us consider that the 14-day high is $100, the low is $75 and the current close is about 150. The calculation will be (150 – 75)/100 – 75) * 100

Here is a summary of the stochastic oscillator indicator. With this indicator, two relationships are peculiar. The relationship between the high-low range over a given number of days and the relationship of the low over the same number of days. The stochastic oscillator occurs when the trader uses the low. The stochastic oscillator occurs when the trader uses the low. Using the stochastic oscillator in a highly trending market could not be the best option because if there is a longer period of trendedness, the trader could panic or get impatient. Notwithstanding, it is good to apply other indicators when trading.

Conclusions

4 min reading

MACD

Find out what MACD is and how to use it on the bit4you platform in this article.

September 2, 2021December 6, 2021

Golden cross & Death cross

5 min reading

The golden cross and the death cross all explained in this article.

Golden cross & Death cross

When it comes to technical analysis, chart patterns are plentiful. However, there are many other patterns available useful to day traders, swing traders and long-term investors. These are the golden cross and the death cross. Let’s break them down in more detail.

What is a golden cross?

A golden cross appears when the short-term moving average is above the long-term moving average from below to above, signalling a possible strong upward movement in the price of an asset. There are two important formation aspects of the golden cross. Firstly, due to the depletion of the sellers’ strength, the downward strong trend must come off, resulting in less market pressure from sellers. The second integral component is the short-term MA must rise above the longer-term MA, usually the 50-period MA and the 100-period MA are involved. The Golden Cross is best analysed against the dynamics and signals of the monthly, weekly and daily graphics.

Golden Cross trade

At this point you know what a golden cross is and how to identify it on a price chart. However, there are several approaches to trading with a golden cross. One states that you should look for a golden cross following a long-term declining trend. The signal after a very long downtrend should be quite powerful. The next tip suggests avoiding large gaps between the mean values of the moving averages. You should observe not only the moving averages, but also the price action. When such a large gap arises, it is best not to take any action once a golden cross has been identified. Another approach recommends using the golden cross in conjunction with the double bottom. Firstly, you should check out the double bottom model of the graph. Then look for the golden cross to appear. Then wait for the price to retest the SMA200. Buy after the retest and set a stop loss below the minimum of the double bottom formation.

What is a death cross?

There is also the reverse phenomenon: a death cross is formed upon long-term depletion in buying strength with the short-term asset moving average dropping below a long-term moving average, usually a 50-period and a 200-period MA. As a golden cross, the death cross is best sought on the higher time frames, since the trend should be confirmed over time and not dependent on short-term intraday dynamics. It should be noted that death cross and gold cross signals may not always be ideal, but detecting such crosses along with analyzing other indicators is an invaluable opportunity to navigate the market chaos of the most volatile asset class in the world.

Death Cross trading strategy

You can’t only open long positions with the Golden Cross strategy, but you can also open sell by applying the “death cross” strategy. The rules for trading this strategy are similar. You wait for the The 50-day moving average has crossed below the 200-day moving average on the higher time horizon. You should then switch to a lower time interval and start a selling trade upon receiving one of the signals. The trade could be blocked as soon as the opposing signal, the Golden Cross, appears.

However, be cautious about trading the Golden Cross in periods of consolidation, as the market can deceive you. Try to employ the Golden Cross as a tendency filter. Open a trade on a lower time frame in the direction of the main trend when an extra signal occurs. This way you will be able to get in on the deal at a more favourable rate and with as minimal risk as possible. You can leave the trade upon the appearance of a contrary signal, the Cross of Death, appears. The ” Death Cross” strategy has identical goals. Have a profitable trade!

Conclusions

3 min reading

Stochastic Oscillator

This article reveals another indicator that will blow your mind. Trading simplified!

August 9, 2021January 11, 2022

Recurring payments in investment strategy mode

Recurring payments

5 min reading

Do you have any understanding of recurring payments and their usefulness? Find out more in this article.

Recurring payments in investment strategy mode

Recently, the recurring payment has become hugely popular with consumers. This is obvious, as it is simply an ideal option. You do not have to worry about having to make a payment on time. Funds are automatically deducted from your account and you, for example, continue to watch your favourite TV shows carefree or get your box of food for the day every morning. That’s what a recurring payment system is for. Keep reading this article to look more closely at this concept and to find out all things systematic investment.

What are recurring payments?

Let’s start with the concept of recurring payments. It is a procedure for a manufacturer or service provider to automatically debit your account for the purchase of a particular good or service at identical intervals. The payment schedule should be negotiated in advance and requires you to approve the withdrawal of further amounts. When first receiving the desired goods, you should provide the card details. After that, all other transactions take place automatically. In most cases, recurring payments are automated transactions that operate on a set date after the subscription has been made. There are other common cases associated with recurring payments, including membership fees, utility payments, online tutorials, etc. Their inevitability lies in the fact that they function according to a set schedule given by you, as being recurring transactions. As different business models evolve around the world, there is a necessity to streamline the billing process. Recurring payments create a great business environment for both merchants and you.

Types of recurring payments

Following, let’s consider what types of recurring payments exist. In general, there are regular and periodic (or irregular) payments. Regular recurring payments follow a fixed schedule. An example would be paying for certain services at the very beginning of the following month. The same applies to weekly, quarterly and annual payments. Periodic (or irregular) recurring payments follow a certain pattern. The service provider does not charge your account once a month or once a week, but when the time comes to provide the service. A recurring payment system could be involved for businesses as well as for ordinary customers. According to this, we can divide the payments into two other types: annuity payments and differentiated payments. An annuity payment involves paying off the debt in fixed instalments, making it particularly convenient to connect a regular charge-off. In the case of a loan agreement, a differentiated approach divides the debt into equal instalments. Payments take monthly or quarterly payments.

Advantages

Recurring payments have a number of significant benefits. Of course, if you have not paid your utility bill on time, nothing serious will happen. However, if you don’t have money on your telephone or internet bill, it can unexpectedly interfere with your work. That’s why recurring payments are there to optimise your life as much as possible. Recurring payments, apart from mobile phone and internet payments, are handy for those who pay their insurance in monthly instalments. You can also set up these kinds of payments, for example, if you plan to go on holiday or a business trip. For instance, you can recharge your account every week with a certain amount and once you know the dates of the holiday, you can edit or cancel the automatic payment for that period. If there are no funds on your card, you can recharge it within a few days. If you set up a recurring payment, there is no need to re-enter your card details manually into the system – payments will be automatic.

Possible risks in recurring payments

This payment system also carries a number of risks. Once you agree to a recurring withdrawal, there are risks that you should be aware of. Firstly, you may inadvertently forget you have registered for the service and given permission for a recurring withdrawal. Secondly, otherwise, any mistake made will be impossible to rectify. And thirdly, you may want to terminate the contract. This too may result in claims and negative perception in the future. So be careful whenever you do anything.

Systematic/recurring investment

And finally, we will discuss the topic of systematic/recurring investment. Systematic investing is a procedure whereby you can make regular, identical deposits into mutual funds, trading or retirement accounts. Systematic investing promotes the habit of saving regularly, and since purchases occur at varying market prices, you should essentially calculate an average purchase price for investments. While most investors gain systematic investment experience by participating in an employer-sponsored retirement plan, investment companies provide many programmes that allow shareholders to create their own individual systematic investment programmes. Such programmes include automatic investment plans and negotiated investment plans. Many investment institutions offer a similar plan. It is an investment programme where you can regularly (monthly, quarterly, half-yearly or yearly) invest small cash amounts. The money comes automatically from your current/savings account or salary.

However, recurring payments are a useful and effective technical solution, just don’t forget to be aware of its drawbacks. The recurring payment mode helps to streamline anyone’s life by making routine payments automatic. With these kinds of payments, you can never miss out on anything, so you won’t have any trouble making your payments.

Conclusions

5 min reading

trading indicators

There are myriads trading indicators in the crypto world… But how to use them in practice? How to combine them and apply them to strategies? Discover in this article.

August 5, 2021December 6, 2021

Scalping

4 min reading

Scalping happens to be another cryptocurrency strategy. Discover what it is all about.

Scalping

There are many different strategies in cryptocurrency trading. One of them is scalping, involving multiple trades per day. This trading method is one of the most complex, as it requires certain skills and the full involvement of the trader. In this article, you will learn how to get started with scalping and also understand why it is considered the most difficult way to make money with cryptocurrencies.

What is cryptocurrency scalping?

Scalping is a popular intraday trading strategy. It involves earning intraday fluctuations in an asset’s exchange rate. The slang name for scalping is pipsing. Traders who select this strategy are called scalpers or pipsers. Scalping traders do not seek big profit targets. Instead, they are striving to profit from slight price changes over and over again. Thus, scalping traders look for small price fluctuations and market inefficiencies. They envisage that by adding up these small profits, the income will eventually grow to a significant amount.

Scalping strategies

There are different approaches to making money from intraday fluctuations in the cryptocurrency rate over a short time. Many traders use multiple strategies in their work. Some traders try to combine several strategies and use available instruments to create their trading schemes. Let us consider the most popular strategies for scalping.

One of the most popular strategies is news trading. You need to have information sources at your fingertips to get signals quickly. It is important to regularly follow news feeds of popular publications and monitor celebrity publications. To scalp cryptocurrency on the news, you need to understand the impact of a particular event on the dynamics of an asset’s exchange rate. In most cases, you don’t need to be a professional analyst to spot a profitable time for buying a coin.

Another popular strategy is the conservative one.

In this case, a trader usually waits a long time for the optimal point to enter the market. The position is held from one to several dozen minutes. Various technical analysis instruments are used for the conservative strategy: support and resistance lines, moving averages, graphical patterns, mathematical indicators, and oscillators.

The next strategy is scalping by the glass. On many digital exchanges, it is possible to view bids from buyers and sellers for buying cryptocurrencies and selling assets. The data is placed in a so-called stock tumbler. This information is used to determine which way the asset’s exchange rate will go in the short term.

Advantages and disadvantages

The cryptocurrency community points out to newcomers that there are both advantages and disadvantages of scalping. The main disadvantages include high transaction costs in the digital currency market. Commissions on crypto exchanges are higher than on the fund or futures market. High technical risks are also present. Scalping imposes higher requirements on hardware, speed, and reliability of the Internet. There is also a human factor. High-frequency manual trading is very stressful for scalpers. Experience has shown that most traders are not able to cope with their emotions. It takes a lot of time and energy.

But scalping has a lot of advantages. For example, its technique is a great express-school for beginners. It allows you to quickly understand market mechanisms, get familiar with basic scalping technical indicators and develop your trading strategy. Scalping is characterized by quick feedback. High potential profitability is also a typical feature for it.

However, scalping is a good way for someone who can quickly analyze information and chart digital assets. There are some risks associated with this type of work. A topic such as scalping on cryptocurrencies requires a cautious approach. Scalping is not appropriate for everyone. It requires high reaction speed and great psychological stability. You can improve your trading safety with regular training and constant knowledge upgrade.

Conclusions

Scalping is a popular intraday trading strategy that involves earning intraday fluctuations in an asset's exchange rate.
Many traders use multiple strategies in their work while others try to combine several strategies, thereby using available instruments to create their trading schemes.
This technique is a great express school for beginners because it allows them to quickly understand market mechanisms, get familiar with basic scalping technical indicators and develop your trading strategy.

4 min reading

Slippage

When is slippage said to occur, what could possibly lead to this, and how can it be avoided? All these questions are answered in this article.

August 5, 2021December 6, 2021

DCA (Dollar Cost Averaging)

3 min reading

Have you had a clue of what this trading strategy entails? Find out what it is about by reading through this article.

DCA (Dollar Cost Averaging)

Introduction

Cryptocurrencies and securities markets change daily and short-term fluctuations are difficult to predict. An investor can make a mistake and buy at the highest price, only to have to wait a long time for the market to recover to this level. Appropriate tools are used to avoid or greatly reduce losses when investing. One of them is the Dollar Cost Averaging (DCA).

Understanding Dollar cost Averaging

Dollar-Cost Averaging (DCA) is an investment strategy in which an investor distributes the total amount to be invested in periodic purchases of a target asset to reduce the effect of volatility on the total purchase. The purchases occur independently of the price of the asset and at equal intervals; in essence, this strategy eliminates much of the careful work of timing the market to make purchases of stocks at the best prices. For example, you allocate $100 every month for a year or two to buy cryptocurrencies, regardless of their prices. While the term ‘dollar cost averaging’ may seem complicated, it is a very simple method of investing that will allow you to increase the value of your portfolio while reducing risk. Over time, you can accumulate more stocks because the average value of the stock or asset is lower than if you invested a lump sum.

This investing approach differs from those in which investors anticipate decreased market prices and strive to invest at the appropriate time. Whereas with DCA, investors are buying regularly and can take advantage of market slowdowns by automatically buying more investments for the same amount of money.

The benefit of Dollar-Cost Averaging is that by investing automatically, you will eliminate the emotional element in your decision-making. Regardless of how much the price fluctuates, you will continue to stick to the predetermined buy rate of your desired dollar amount. So, you will save yourself from ill-considered and unforeseen expenses. In this manner, if the price falls dramatically, you won’t abandon your investment; instead, you’ll see it as an opportunity to buy more shares at a cheaper price. It’s impossible to determine the bottom of the market, so a Dollar Cost Averaging can help smooth out market timing. Of course, on the other hand, you may also miss an opportunity to invest at the right time before the market begins an uptrend in a bull market.

One of the drawbacks of DCA is that the marketplace tends to increase over time. This means that investing a big sum early is likely to outperform investing little amounts over time. A lump-sum payment will provide better returns over the long term as a result of the market’s upward trend. However, DCA is not a solution for all investment risks. You have to decide which project or currency to invest in, even if you choose the passive approach to Dollar Cost Averaging. If the investment you choose turns out to be a lousy one, you will always be investing in a losing venture.

Also, Dollar Cost Averaging is an excellent way to move large sums of money into the market. In a turbulent market, spreading investments across several months can help reduce risk. Of course, the Dollar-Cost Averaging approach does not guarantee profits or prevent you from losses in a down market.

Conclusions

Dollar-Cost Averaging (DCA) is an investment strategy in which an investor distributes the total amount to be invested in periodic purchases of a target asset to reduce the effect of volatility on the total purchase.
Dollar Cost Averaging eliminates the emotional aspect that sometimes comes with decision making. No matter the fluctuation in prices, the predetermined rates will be maintained.
Dollar Cost Averaging is an excellent way to move large sums of money into the market, spreading investments across several months can help reduce risk.

4 min reading

Scalping

Scalping - another cryptocurrency strategy. Discover what it is all about.

August 5, 2021December 6, 2021

OHLC charts/graphs

3 min reading

Everything you need to know about OHLC is found in this article. Just keep reading.

OHLC charts/graphs

There are many ways of displaying the traded price on the charts. The chart can take the view that is chosen by the trader in his terminal. Modern trading platforms have several types of price displays and allow you to change the type of chart display at the touch of a button. Each trader chooses the most convenient way of displaying charts. In this article, we will consider the most popular one.

What is an OHLC diagram and its use?

An OHLC chart provides a histogram type graph indicating open, high, low, and close prices for all periods. Besides, OHLC is a shortened abbreviation indicating quotations over a period of time. The letters in the abbreviation are deciphered. O – Open – opening of a candle or a bar. H – High – the candlestick’s maximum. L – Low – the candlestick’s minimum. C – Close – the candlestick close. Moreover, OHLC charts are useful because they show the four main data points in a period. At the same time, the closing price is considered by many traders as the most important.

By the way, this diagram type provides useful information because it can indicate growing or falling momentum. When the opening and closing positions are far apart, there is a strong momentum signal. When the open and close are close to each other, it shows indecisiveness or weak impulse. The highs and lows point to a complete price spectrum for the period, useful for estimating volatility. In a word, in OHLC charts, traders follow several patterns.

History of OHLC

OHLC first appeared in 1750, just 20 years after markets were formed. Therefore, the designations of some elements on the candles themselves. Such as opening and closing prices. Initially, they looked rather primitive, in other words, they were considered simple. The Japanese food rice trader Homma Munehisa invented candlesticks to visually observe the movement of prices, the maximum and minimum during a certain time. Japanese candlesticks are still very popular today. Since the 17th century, many people have tried to invent better ways to display price movements, but the Japanese candlestick chart has proved to be the best type of visual observation, due to its simplicity and information value. After all, the Japanese candlestick shows us 4 price values over a certain period.

Chart description

OHLC charts consist of a vertical line and two short horizontal lines to the left and right from the horizontal line. In short, the horizontal line to the left is the opening price for the period and the horizontal line to the right is the close price for the period. The height of the vertical line represents the intraday range for the period. The maximum is the maximum of the period and the minimum of the vertical line is the minimum of the period. After all, the whole structure is called a price bar. For example, when the price rises over a period, the right line will be higher than the left because the close is higher than the open. Often these bars are colored black. But, if the price falls over a period, the right line will be lower than the left, as the close is lower than the open. These bars are usually colored red.

Moreso, OHLC charts can be applied to any timeframe. This could either be a five, ten, fifteen or thirty-minute chart. When the time frame is set, the chart will show its open, high,low and close prices within that time frame.

However, using OHLC bars is the right decision for every trader. It is convenient and can bring good profits. This type of bar can also be used for collecting statistics with its subsequent analysis. Thanks to the flexibility of settings and the choice of periods, every trader can easily use OHLC to their advantage.

Conclusions

3 min reading

DCA (Dollar Cost Averaging)

Have you had a clue of what this trading strategy entails? Find out what it is about by reading through this article.

trading indicators

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OBV

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MACD

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Stochastic Oscillator

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Golden cross & Death cross

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Scalping

Scalping

What is cryptocurrency scalping?

Scalping strategies

Advantages and disadvantages

Conclusions

DCA (Dollar Cost Averaging)

DCA (Dollar Cost Averaging)

Conclusions

OHLC charts/graphs

OHLC charts/graphs

Conclusions

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