Author Topic: SHORT BITCOIN TRADING STORY FOR NEWBIES PART 4  (Read 2154 times)

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Offline kennymic1Topic starter

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SHORT BITCOIN TRADING STORY FOR NEWBIES PART 4
« on: August 12, 2016, 03:58:11 AM »

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Another very commonly used approach is called exponential moving average (EMA). It works like an integrator or low pass digital filter.It is calculated recursively, so to calculate today’s EMA, we need to know the EMA from yesterday and today’s closing price: When we calculate the firstpoint long-long time ago we can simply approximate EMA with SMA. If you compare EMA and SMA, you can notice that EMA reacts faster to the changes in trend, while SMA better reflects the average prices. The choice between them is your preference.

You can also think about some other smart ways to make an average. All these functions are easy to implement in Excel or any other software of your choice. I took some historic data from BTC-e and applied these averaging methods to obtain trend lines. How about trading with autopilot bitcoin tool?

Trend signals: patterns and crossovers Well, what can you learn from the moving averages? First, we can find the trend: if our EMA or SMA goes down (you can allow super bitcoin trading tool to do that for you automatically), the long-term trend is falling, if it goes up, we have a long-term uptrend.

How can we determine when the uptrend changes into a downtrend?

Our averages can help us here as well using a technique called “double crossover”. If we plot, for instance EMA10 and EMA50, the point where EMA10 crosses above EMA50 indicates a crossover to rising trend and is called “golden cross”. If EMA10 crosses below EMA50, this is a “dead cross” signalling the beginning of a bearish market. Another type of signal can be created when the actual price crosses the average, “price crossover”. The crossover techniques are very useful when a long term trend exists. If the price is volatile, it might create many false alarms. Useful indicators can be obtained by drawing support and resistance lines. These lines are defined by your psychology (greed, firstof all) and represent the issue of supply and demand. Support is the level at which buyers take control over the market and prevent prices from falling further down...... To be continued

On contrary, at the resistance level, sellers take control over the prices and prevent them from rising higher. Breaking through support or resistance lines often signals the beginning of a different trend.

FOR THE LIST OF FOREX BITCOIN TOPICS IN CLASS 1 & 2 OF FOREX BITCOIN TRADING TRAINING, GO TO: https://bitcointalk.org/index.php?topic=1569460.0

Do you want to become a smart and successful bitcoin trader? Trade bitcoin using Forex approach.


Download Bitcoin Forex Class 1 lesson 1 Video (Compressed Size 63MB)


Download Bitcoin Forex Class 1 lesson 2 Video (Compressed Size 30MB)

 

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