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Oscillators

1] How to use Traders Dynamic Index and Complementary OverlayTraders Dynamic Index serves for crossover signals and are essential for trade entries and most beneficial when identified on over 30-minute Time Frames as on hourly time frames. I have made the options available of the oversold (green) 32 level line overlay which is useful in identifying potential buy zones/price. In KK_Traders Dynamic Index_Bar Highlighting it is also good to note that in uptrends : RSI ranges between Upper Volatility Band, Lower Volatility Band and/or relatively "within" 68 and 50 level lines as it has been doing on hourly time frames on Bitcoin. Direction and deviation of MBL overlay or Phaser from price is strong indicator of trend direction and price level/zone useful for those who are confused in knowing where price will have to average into. Promoting free and highly useful Indicators: KK_Traders Dynamic Index_Bar Highlighting Traders Dynamic Index Overlay "Price Action Channel Master by JustUncleL Restored" _______________ I had not used these guides recently which I have currently published. If anything (I ever do publish) varies contrary to these indicated guides and the coming guides to be published, the likelihood of failed forecast is augmented.
BITSTAMP:BTCUSDEducation
by YardleyRosette
An idiot's guide to trading Bitcoin - Case study from 2017It's always easier to look back and see what should have been obvious at the time. This is a short case study of how one COULD have traded Bitcoin successfully from it's last epic run of 2017. This should be a precursor to what happens in 2018 and going forward. It isn't a 'method', but is an observation and an opinion that will guide my own trading going forward. A year in Bitcoin is like a decade in almost any other stock. This presents numerous insights. We see that from late 2016 onward we had a series of higher highs / higher lows. If one simply applies a basic 14 period RSI oscillator to the chart and looks at price action, they would see that as long as Bitcoin was making higher highs and higher lows WITHOUT any significant divergence it would have been foolish to take profits / time the market / etc. The price retracements from where the RSI gets into overbought (sometimes significantly) territory simply weren't that large. Taking profits would certainly have led to feelings of accomplishment and $$$ but one would have missed out on even greater subsequent moves. It simply made more sense to be in the market, rebuying at times like July and September when BTC/USD dipped into oversold territory (while still making higher lows - although July is arguable). Note that there really isn't any divergence of mention between price and the oscillator during this time. It isn't until we get to December that we start to see some extreme bearish divergence. Price careens upwards and pauses on 12-17. The oscillator makes a markedly lower low. While in hindsight it was probably impossible to time profit taking unless you were glued to your screen / phone, this was the first real time in the year long bull run to considering pausing and selling. The sharp move downwards over the next few days wipes away nearly half of the coin's value. Ouch! Lessons: Don't bother paying attention to oscillators in trending markets unless they are showing signs of divergence. Selling / timing the market will in all likelihood lead to regret / FOMO / emotional trading decisions. If there are signs of divergence after an especially massive run, take profits immediately. Waiting could lead to massive hemorrhaging of profits. As long as the crypto is making higher highs / higher lows feel free to rebuy in wherever it feels right to do so, especially when it gets into oversold territory. Let's see what the rest of 2018 brings. I'll be sitting around enjoying life until there is some clear indicator of where the market is headed. Note: this same analysis could apply to a number of other coins. I haven't checked.
BITSTAMP:BTCUSDEducation
by timj
2
Lesson 1: RSI (Relative Strength Index) - Widely used indicatorWelcome to the first lesson from Lets Go Crypto! We aim to educate people who are struggling to understand indicators, and how to use them when it comes to trading. Hope this is helpful for all of you people out there, who are looking for some kind of lessons. If at the end, you do not understand or have any questions, feel free to ask in comments below. Today, we will be talking about RSI (Relative Strength Index), which is one of the most used indicators in crypto. There are many people out there who just use RSI to day trade, or even for a long term trading. Here you will learn what is RSI, the Pros and Cons of RSI, how to use it to trade, and the best strategy to follow if you are only using RSI as an indicator. I will be using 4H time frames as an example for the lesson. Lets dig straight into it. Default RSI indicator Settings: Length (14) . What is RSI? Relative Strength Index is one of the many oscillators out there, which basically calculates the strength and weakness of a coin. It compares the up movements versus the down movements over a given period of time. As you can see on the chart, RSI is plotted as a single line. That line when average gains are greater than the average losses, it moves up, and vice-versa when average losses are greater than average gains, the line declines. It is as simple as that. It basically takes into account, the speed and change of price movements. How do we use RSI? Using the average gains and losses that RSI calculates, a ratio is created, which makes the line move between 0% to 100% borders. Technically in the crypto world, we have our borders placed at 70% and 30% as you can see in the chart. (Some people also prefer using 80% when its bull market and 20% when its a bear market). If we see RSI nearing or crossing 70% line, that means that the coin is overbought. If we see RSI nearing or crossing below 30% line, the coin is in the oversold zone. When RSI is above 70, that means that a coins' price has been increasing for that period of time, and is not in the overbought zone, which means it could be due for a correction. When the indicator is below 30, it shows a strong run lower which might be losing momentum, and the price may be due for a rally upwards. This is not at all hard to understand. I hope everyone is on the same page so far. Make sure you understand this bit. RSI > Price increasing > If nearing 70 or above > Overbought > (We might see some downward movement) RSI > Price decreasing > If nearing 30 or below > Oversold > (Price might start going back up) Easy peasy! Its always easy until it comes to applying it to trading right? Lets have a look at that as well. I am sure after this and a little bit of practice you will be able to use this indicator with full confidence. Applying RSI in trading Just spend a minute looking at the chart for me really carefully and match the price action with the RSI movement. You will see that it is very similar. When the price is going up, RSI is going up, and when the price is going down, so is RSI. When to Buy? Scenario 1: So we know that when RSI is low (less than or equal to 30), it is oversold, and that usually means that the coin can rally up soon. Our aim should be buying in when RSI is low. So if it has crossed below 30%, wait to buy in until it comes above 30, that is just a confirmation that the trend is changing to bullish. It simple. Read this one more time. Scenario 2: There is one more situation when it is not necessary to wait for the RSI to go below 30, but be careful with this one. This is called a bullish divergence. It occurs when RSI makes a higher low while the price makes a lower low. The more times this occurs, the more bullish it is considered for a coin. I will be explaining Higher Lows, and Lower Lows for those who do not understand it. Since I am getting out of words here because of the limit, continue reading below..........
COINBASE:BTCUSDEducation
by MoneyChartz
11
When Larry Williams UO told us that Bitcoin is going to crashUltimate Oscillator: This is a range-bound indicator, which means the value fluctuates between 0 and 100. Similar to the RSI, levels below 30 are deemed to be oversold, and levels above 70 are deemed to be overbought. Transaction signals are derived by finding situations where the price is going in opposite directions than the indicator. Once this divergence has been identified the trader will wait to confirm the transaction by using other technical indicators. Here are trading rules: www.marketinout.com Following this, UO indicated us to go short (red arrow). Since then there has been not "close" signal for this trade. Very interesting - I came across this indicator studying new entry/exit strategies. I am about to backtest this indicator on my trades for the next months whether UO is worth considering.
BITFINEX:BTCUSDEducation
by JaDeVin
Trading on the Stoch RSI StrategyNot Financial advice. For my personal education only. This shows how someone could use the stock RSI to trade, The idea is to make a trade when the Stoch RSI moving average lines cross each other. But as with all indicators this isn't a fool proof strategy, as high lighted in the green circles that when the market moves sideways you can potentially lose money. Also if you only traded the crosses when the market goes past the over bought or over sold lines you could still be caught out as the point of the all time high the Stoch RSI is saying that the market is over sold and giving the signal to buy. In my personal opinion this is a very good indicator but should not be used on its own.
BITFINEX:BTCUSDEducation
by Bluephantom
Considerations about "RSI Rollercoaster" trading strategy.The RSI rollercoaster in my opinion is one of the safest trading strategies, because combines a clever use of the stop-loss at points that guarantee receiving a good percentage in profit. It is particularly good when you do middle term trading, and you have regular jobs which impede being in front of the charts regularly. Nevertheless there is one situation about the RSI rollercoaster that I do not no how to handle: Lets suppose that you take a long position on any symbol, using the criteria of identifying the upward crossing of the K line with 20. You go long at 10000, considering a stop loss at the pivot point (9500), and selling half of your position at 10000+50% of your risk. Possible outcome 1 : first target of 10000+50% of risk is not met, and the value of the share starts going down. In this case the stop loss will protect your position making you going short again, in case the trend continues being bearish. Possible outcome 2 : first target of 10000+50% of risk is met, and the share continues going up, in this case you liquidate half of you position at targe and increase the level of your stop loss to breakeven. Then go short after the RSI has a downward crossing with the 80 level. Possible outcome 3 : First target is meet, wich means that you sell half of your position, but then the share goes down up to the break-even point. At this stage, you liquidate all of your shares, but in a market that you expect to be bullish. The question is, in a situation like outcome 3, How to enter again to the market? , how to define the strategy to enter back again? I will just keep studying to try to identify patterns, but all comments are welcome.
Education
by aqs21
Complex indicators. Should we use them or not?Hi guys! I've decided to continue exploring various instruments. Today we'll talk about Stochastic oscillator. But before we start, I have an important message for you. Using indicators with their default settings will not yield good results. I try to tell you not only about basis but about different specificities of each instrument. That will make your technical analysis more diverse. Stochastic consists of %K and %D lines. It also has percentage scale and oversold/overbought zones (If you are interested in detailed the calculation, you can fund the information on the net). Buy signals: 1) When %K line goes out from the oversold zone. 2) When %K line crosses %D line upward (this signal also gives many false signals and I don't recommend you to follow it). 3) Various divergences and convergences of indicator and price. Correct indicator setting is very important. Depending on the time frame that is comfortable for you to work, use next settings: 1) time frame less than 1h: (5,3,3) 2) time frame from 1h to 1d: (10-20,3,3) 3) time frame 1w: (21,7,7) And remember: the main specificity of Stochastic is that it gives many false signals when the market is in trend. In the next article, I will prepare information about filtration methods of false signals of this indicator. Comment if you are interested in such information. Thank you for likes and followings!
XEducation
by indragop
day trading BTC: managing the dip and return cycleBoth dipping and recovering price cycles represent good buy-ion points for BTC day trades. There are a multitude of good buy ins given the above indicators and bollinger band overlay (200 day SMA). When price is falling, the lower standard deviation of the bollinger bands are helpful in establishing buy in points. When price is collapsing initially after a high, this is the scariest buy in. However, you can see how EMA 34 and SMA 50 are both far below SMA 200, and exhibiting room for collapse. Once a significant BB low takes place, scraping the lower BB for the last time, there is an opportunity to buy in, with expectation of a set of improving buy-sell cycles. There will be several before the final, parabolic jump of the day, justifying your attendance in the market. I see several very healthy gains, buying these hits along the lower bollinger band, which may surpass the parabolic gain, taking place in the final jump. My contribution is the cup-like trend, traveling the lower range of the bollinger distribution, scraping lower standard deviation points. But the recovering price-pump at the right (4.4%+) is signed by rising prices versus the lower bollinger band, and a combination EMA 34 and MA 50 surging closer to SMA 200. This document is for information and illustrative purposes only. It is not, and should not be regarded as “investment advice” or as a “recommendation” regarding a course of action, including without limitation as those terms are used in any applicable law or regulation
COINBASE:BTCUSDEducation
by mortonpeak
Another way to use "Divergence" to spot Fakeout from Breakout -is to find out if the momentum is getting stronger or weaker, if the chart make a higher high and the indicator made lower high so it refer to; the momentum is decreasing, in order to spot the (breakout from fakeout) -in this example we have a rectangle consolidation, you can see the first breakout was a fake out, here we'll use divergence to spot this fake out take a look at the indicator is making higher low while the price get back to same low this indicate the momentum is decreasing, the bears are already exhausted and the price get back to rectangle pattern. -But the next one was a real breakout look at the indicator is making lower low just like the price, also if you look what just happened next the price soar up to reach the support line of the rectangle pattern which is turned to resistance, the bears gathers more steam to push the price down -Hopefully this was helpful and another tool to put it in your arsenal facing the market wish y'all a green week, Peace.
Education
by YaseenG.Housari
3
Trend Base Analysis & DivergenceToday, I show this example for you to understand why bullish divergence is important for an entry order. FWD.AX is selected because VectorVest indicator RT crossover occurred on 4 May which is the same day that Stochastic (8,3,3) crossover occurred Value of RT changed from 0.97 (3 May) to 1.03 (4 May) Value of RT yesterday was 1.53 If you hold this stock since the crossovers occurred on 4 May, you gain 30% return so far. For beginners, you may also try the second entry on 29 July. Why? It is simply because of the bullish divergence. And also, the price actions struggled at the Fib Ret. 38.2% as well. Your homework is to analyse JIN.AX, using the same strategies above and the markups on the graph. Show me why JIN.AX gained 10% in one day on 11 July.
FEducation
by SoloTraderAU
Super Easy MACD & Stochastics Trading TechniqueI am fairly new to this but have been testing out this technique with stochastics and MACD and it works well for me. Once stoch goes bullish from oversold, wait for MACD to cross and confirm a bullish trend is emerging and buy. When we have reached a peak and it's time to sell - stoch will cross to bearish from overbought followed by MACD. This works well with any time frame and trading pair! Happy trading and if my technique helped you profit - feel free to donate some BTC: 17CmGuFs55TVFSC3BZbWoYkVHLMm5ko5Yg
Education
by davedesigns
Trading Applications: How To Use Oscillators Correctly! You need to read the tutorial first before this post. Here is the tutorial : This is an example of how to apply the concepts I explained in the oscillators tutorials. I have numbered the text boxes so that you read them in the correct sequence. Start from the left hand side and move along the chart. In this example we have applied some basic concepts like support and resistance and candlestick patterns as an additional tools to the oscillators. It is always important to use more tools to support your view (but not too many). Also it's always important to put things in context of the the price action. Whether it is trending up or down or sideways. In addition, remember to look at the bigger picture, as an uptrend on the daily chart , might be merely an upwave in a sideways market on the weekly or monthly chart. Best Technician
Education
by Technician
18
Trading Fundamentals: How To Use Oscillators Correctly!Note: A prerequisite tutorial about trends is posted in the related links below. Oscillators can be a very useful indicators in trading if used correctly. However misusing them will only return disappointing results. Some of the most popular examples of oscillators are the stochastics, and relative strength index . I will use stochastic in this tutorial, but the same logic applies to most other oscillators. Definitions: What are oscillators: Oscillators are indicators that derive their value from the price . The price is an input for the oscillator formula. The formula is usually a simple calculation that compares the latest close value for the price to a the range of price over a specific period of time( u can change this period in the oscillators settings). Then give the result in a percentage format(0 to 100). The main purpose of this calculation is to show whether the price is overbought or oversold compared to that period range. For example: if stochastic reading is at 80% or above, its said to be overbought. And if at 20% below it is oversold. Divergence: When the price is making new highs and the oscillator fails to make a new high, this is called a bearish divergence. The opposite is true, when the price is making new lows and the oscillator fails to make new lows this is called a bullish divergence. Bullish divergence is a buy signal and bearish divergence is sell signal. If you follow the overbought and oversold signals and divergences as a sell and buy signals without taking in consideration the price trend, the results will be catastrophic. ill explain why shortly How to use oscillators to maximize your chances: 1) In TRENDING MARKETS Rule #1: Oversold signals in uptrending market is a reliable buy signal. Overbought signals in downtrending market is reliable sell signal. Look at the chart, start from the left, you can see that the price broke above the latest swing high for the prior down trend, And that signalled a potential reversal. Accordingly, a trader should had looked to buy new oversold signals on stochastic. Afterwards, every time the stoch. was oversold in this uptrending market, we witnessed a rebound and resumption of the uptrend. Same logic should be applied to downtrending market. Rule #2: Overbought doesn't mean sell if occurs in an uptrend, and oversold doesn't mean buy if in downtrend. Rule #3 : Bearish divergence doesn't mean sell if occurs in an uptrend, and bullish divergence doesn't mean buy if occurs in a downtrend. This might be counter intuitive, but the chart above gives a clear example: As you can see on the chart, when the market is up-trending, overbought, and bearish divergences signals are very common due to the fact that there is a strong demand. Therefore these signals are NOT RELIABLE and should be ignored. UNLESS there are other major multiple technical indications of reversal such as a major resistance level, and a bearish candlestick formation, or trend structure break. Same logic goes for down-trending market, where you should ignore oversold signals and bullish divergences. At the end of the chart, another example of a bearish breakout below the uptrend structure. That was an early signal of a new downtrend. After that breakout, traders should look to sell new OB signals on stochastic. 2) In SIDEWAYS MARKETS Overbought and oversold are reliable on a sideways market. Have a look at the image below If you spot a side-ways market, look to buy oversold signals and sell overbought signals. As the price tends to reverse direction near the top and bottom of the range. If the range is broken, you should exit your trade and stop applying the the logic of sideways market. instead look to apply the logic of the trending market explained above. Hope this will help you trade better Best Tech
Education
by Technician
29