Hello to my friends who love life and keep smiling despite all negativity. In this article, I will talk about the Moving Averages you see on the cryptocurrency charts. I will try to explain it as simply as possible. Let's learn together…
Moving Averages are the most basic indicators used for technical analysis in the markets.
Moving Average; It indicates the average price value of a cryptocurrency in a specified time period. It is obtained by dividing the prices by the number of days.
There are two basic trading situations in moving averages.
It is to buy if the price cuts the average upwards and sell if it cuts down. Profit and time should be expected according to the day of the average used. In cryptocurrency markets, 1-20 day moving averages are considered as short term, 21-99 day moving averages are considered as medium term, 100-200 day moving averages are considered as long term.
Important Note: Short-term moving averages may not be accurate for cryptocurrencies that are not of high volume. Therefore, long-term moving averages should be considered while developing a short-term strategy.
According to the intersection of certain moving averages, buying when the short-term moving average cuts the long-term moving average (like the Golden Cross), and selling when the long-term moving average cuts the short-term moving average (like the Death Cross).
Commonly used moving average intersections are 20/50, 50/100 and special place 50/200 (Golden and Death Cross). You can check out the Golden Cross and Death Cross article.
The above is for the Simple Moving Average (SMA). It is used by most investors.
The following moving averages are used for daily trading investors.
Weighted Moving Average (WMA): It is calculated with more emphasis on the last price action. It is mostly used in short term analysis.
Exponential Moving Average (EMA): It has a more complex calculation algorithm than others. It takes more of the latest data into account so it runs with less lag than other moving averages.
With the TradingView application (Chart), you can see the charts of cryptocurrencies and moving averages for various indicators.
Supporting the moving environment signals with important indicators such as RSI, MACD, BB will reduce your risk in our decisions. You can review his previous articles with RSI, MACD and BB. But I will be publishing my updated articles in the coming days.
Important Note: As a different strategy, instead of taking a position immediately after the price breaks the average, waiting for a certain time (seeing the price change by 4%), waiting for a change in the direction of the signal and then entering it is a risk-reducing method.
In finishing…
You can trade cryptocurrencies without being a professional. The important thing is to know the meaning of the indicators on the graphs you see and to make moves in time. In this and the coming days, I will explain simple but important chart indicators with examples. Don't be afraid to experiment. The small amount you lose today will save the big amount you will lose tomorrow. You cannot buy it with money. This occurs over time. During the bull season, you can catch one or several tokens within thousands of tokens. Keep this in mind; Do not think that you can get different results by doing the same thing… As I always said, listen to everyone, decide for yourself ...
I'm looking forward to your comments. Thanks to your comments, we can shape my next articles together. Let's stay in touch… Take care of yourself so that you and the people around you are happy…
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