Technical Indicators: Using technical and analytic indicators will allow traders and investors to find the best point to buy and sell their coins. These powerful tools will show you what is hidden underneath the simple charts and will give you the edge on people that have little to no experience with crypto trading in general.
Coinigy's Top Tools and Indicators:
Bollinger Bands: At the core, Bollinger Bands are a simple measure of volatility, showing how far up or down the market is moving during a certain period. They are a great display for traders looking for periods of coin being overbought or oversold. The farther the coin price moves towards the upper band, the more overbought it is. The opposite is true as the price moves towards the lower band. Another pattern that traders can use is to look for periods of high volatility and low volatility as they often follow each other. This can be seen in the chart below as the price of the coin has a large movement and then starts to even out. It is also very easy to see that near the center of the chart there is a break of the upper band and the price immediately reacts downwards.
Moving Day Averages: Moving Day Averages are one of the most popular tools in the financial world and often show up by default on most charts. They are the most effective on established and heavily traded coins i.e. Bitcoin, Litecoin, Ripple, etc. Moving Averages (MA) are found by taking the last "X" days of the price and dividing them by "X", the number of points that were collected. They are often used to identify support and resistance points for traders to get in and out of the market at the best time. If a break through of the moving average happens it is usually a strong indicator of heavy momentum and will continue to move in the direction it is currently is going.
Support and Resistance Lines: While Support and Resistance lines are not necessarily a calculated indicator they provide some of the best technical insight on a number of charts. Many people accuse the Crypto trading world of not having a rhyme or reason in terms of its pricing charts. More times then not it can be seen quite easily that a simple horizontal trend line predicts the market perfectly. Using the multi-month chart below a trader could have easily drawn a heavy resistance line that has shown resistance a number of times before and made a great profit off of the resistance level in the market.
The highlighted section on the right is the right is when the prediction was made and the line's level held strong and the price immediately bounced off of it and dipped back down. Traders may critique this level and say it was just a coincidence due to the fact that it was broken multiple times before but if you notice during the times it broke through there was a much larger volume and this "pump and dump" quickly dipped back below.
Moving Trend Lines: Much like a moving average, angled, or moving, trend lines are a great way to see how predictable the market's movements can be. Simply by connecting 2 points a trader, more times than not, can accurately predict a charts movement. Below I have drawn a resistance trend line and a support trend line based off of the first two points on the trend line. The market reacted almost perfectly when it reached both of these lines and bounced up and dipped down respectively.
These quick turn arounds in the market are known as pivot points and happen both on the upside and down side of the price movement. Some traders utilize this tool on an intra-day period but a lot of traders find it more effective when you go back a few days or weeks and see the larger picture and can discover the larger, more supported trend lines like the ones below.