Cryptocurrency: Technical Analysis for Beginner – A Guide for Optimism (OP) and Trading Indicators
Like the world’s first decentralized digital currency, Bitcoin has revolutionized the way we think of money and negotiation. With its volatility, unpredictability and rapid growth, cryptocurrency trade can be fascinating and intimidating. In this article, we will deepen the basics of technical analysis for beginners, focusing on the optimism indicator (OP) and the main negotiating indicators.
What is technical analysis?
Technical analysis is a method of financial data analysis to predict price movements. It involves examining charts, trends and standards to identify possible purchase or sale signals. This approach differs from fundamental analysis, which focuses on the intrinsic value of an underlying asset and economic factors.
Optimism indicator (OP): A guide for beginners
The optimism indicator (OP) is a popular technical analysis tool used to measure the strength of a trend. Developed by Peter S. Goodman in 2002, this indicator is based on a simple and powerful concept:
“Optimism = (1-short term) + (short term moment x strength)”
In simpler terms, optimism measures how much moment is still present in the short -term trends of a security, as well as considering its strength. When the OP indicator drops below 0%, it indicates that the trend has lost its impulse and may be reversing.
How to use the Optimism Indicator (OP):
- Choose a technical indicator: Select a suitable technical indicator, such as the stochastic oscillator or the relative force index.
- Calculate the short term moment: Calculate the short term moment by dividing the current price by the simple 3 -period moving average (SMA).
- Combine with strength: Add the short -term calculated moment to its strength value.
- Apply the OP rule: If the optimism indicator falls below a certain limit, it is a purchase signal.
Negotiation indicators: a guide for beginners
Now that you have dominated the optimism indicator (OP), let’s dive into the main trading indicators used in the cryptocurrency trade:
- Stock oscillator (14 period):
* Buy when %stochastic k is above 20 and %stochastic D is below 20.
* Selling when %stochastic k is below 20 and %stochastic d is above 80.
- RSI (Relative Strength Index) (14 Period):
* Buy when RSI % fall into your Bolter Bollinger band and RSI % is above 70.
* Sell when RSI % rise to its Bollinger Bollinger band and RSI % is below 30.
- Bollinger Bands:
* Buy when the price breaks the lower band, indicating a potential reversal.
* Sale when the price is released by the top band, suggesting a continuation of the trend.
Combining indicators for a winning strategy
To create a comprehensive negotiation plan:
- Use a combination of indicators: Combine optimism (OP) with oscillator stochastic indicators to identify possible purchase or sale signals.
- Adjust the parameters: Adjust indicator parameters such as window sizes and boundaries to adapt to your negotiating strategy.
- Define stop losses and obtain profit levels: Set a clear interval and get profit levels to protect your investment.
Conclusion:
Cryptocurrency negotiation can be an exciting but challenging venture. By mastering technical analysis using the Optimism indicator (OP) and the main negotiating indicators, such as stochastic oscillators, RSI and Bollinger Bands, you will be on the way to develop a winning strategy. Remember that technical analysis is just a tool among many traders use to make informed decisions.
To remember:
- Always set realistic expectations for your business.
- Monitor and continually adapt your strategy as market conditions change.
- Never invest more than you can lose.
