Technical analysis uses historical price data, turning them into indicators that are convenient for perception. This article will feature universal trading tools for crypto traders, the field which becomes very popular every day.
Fibonacci retracement levels
Like moving averages, Fibonacci levels are another useful tool for predicting price performance. Fibonacci levels do not represent complex and interdependent calculations but are included in the list of indicators for the trader due to their usefulness.
This indicator allows you to operate with standard levels 0; 23.6; 38.1; 50.0; 61.8; 76.4; 100. When a sudden change in price occurs, Fibonacci levels allow you to track such a movement and draw certain conclusions about the price behavior. Many crypto traders believe in Fibonacci levels as a universal tool.
Autochartists help with finding good trading opportunities in the market no matter what state it is in or what trends are dominating at the time. The tool employs tried and tested strategies and theories to visualize the least risky option that the trader could take and potentially come out on top in the long run.
A lot of Autochartis tools will come with a price tag, which is understandable considering how much development the tool requires. However, it has been proven by the free Autochartist tool with Axiory that a budget tool is just as good as a priced one regardless of how much content it covers.
The main focus of this tool should always be the visualization of thousands of trade opportunities through charts and entry/exit points as well as an option to diversify between risk/reward ratios.
Relative Strength Index – RSI
RSI is one of the simplest indicators that indicates an overbought or oversold asset. RSI uses historical data to determine the total demand for an asset and then calculates whether people are buying the amount of the asset that could lead to a downward price correction, or the opposite could happen.
The RSI indicator has two lines – one at the level of 30%, the other at the level of 70%. When the indicator value is above 70%, then the price is likely to fall; when the value is below 30%, the price is likely to rise.
When prices fluctuate in the direction of growth or fall, then their movements can be misinterpreted as a reversal or continuation of the trend. The MA indicator calculates the average price for a period of time, and also recalculates it over time.
Short periods have little effect on the MA indicator, which relies on long periods of time. Looking at the graph depicting MA, you can determine the levels of support and resistance. Support is the bottom barrier through which the price will most likely not jump. The resistance level is the opposite of the support level – it is also a kind of barrier above the current price level, which is unlikely to be confidently overcome. Thus, the MA indicator makes it easy to see support and resistance levels.
A stochastic oscillator is another tool you can use to track momentum, but it also has other purposes. The Stochastic Oscillator is based on the principles of chaos and randomness and is named after the ancient Greek word “guess”. Stochastic comes into its own when the market moves aimlessly and when it is not trending. Stochastic Oscillator is tracking randomness over time and can predict when large, traded price movements will begin.
The aforementioned crypto tools can help you make trading decisions. They are universal, and a lot of people use them. The number of tools is countless – each person uses a particular tool for various purposes.