xxr50

MA my understanding

Education
BINANCE:BTCUSDT   Bitcoin / TetherUS

I know that the topic of moving averages has been fairly explained in crypto and other trading markets, and every trader has a good knowledge, and usage cases for them, but here I will share my own view of the moving averages, and how I use them for trading without relying on technical or educational sources by any means.

Starting with a recap on the main idea of moving averages, the moving part of the name indicates a change in the final results based on time period specified by the trader such as 5,10,15,21,31,50,100,150, 200, you name it, for the last x candles to consider while calculating the average of their cumulative x price divided by their number.

things you need to consider when using the moving average include:
1. Its an old and well known method to analyze price action
2. Many traders use it as a part of their trading strategy
3. It removes the noise from the price, and helps to identify trends sometimes
4. Traders rely on predefined moving averages lengths such as 21,30,50,100,150, and 200 so using these fixed values for your moving averages gives you better analysis of the market

now for the usage cases that work for me with MA:
1. Showing support and resistance
for new coins, I rely on the moving average to predict support and resistance
since new coins form new supports and new resistances alone the way, indicators cannot work, and identifying levels is almost impossible, thus many traders will rely on the sole usage of MA for their support and resistance.

2. Identifying trend change
some trends can be clearly seen or predicted by using MA crosses, such as the famous golden cross of the 50 and 200 MA, and smaller crosses including 21 crossing 50 to identify an uptrend, or vice versa.

3. Eliminating FOMO
if the price suddenly fluctuates up, and the moving average is still moving smoothly on the same level, jumping in the market will be considered pure FOMO. The moving average can support sudden jumping in prices by showing an increase overtime, while sudden jump in the price with a moving average moving horizontally indicates that price could fall fast since no preparation of the market is found.

Indicators are really helpful when relying on MA in TA, so here I will share indicators I use when considering MAs:
1. Cryptonite's EMA Field
I really on this indicator a lot since it provides the ability to use 9 different EMAs, customize their colors, see their crossing on chart, and receive alerts of crossing.
2. RSI oscillator by TradingView
RSI is surely a different topic, but using RSI with MA of the RSI to show bullish and bearish movements is extremely helpful when trading.
3. Volume oscillator by TradingView
this indicator shows the volume of the coin, which is also not our topic, but using the volume with its MA helps finding resistance points in the chart, and predicting where the price could possibly reach before starting a reversal.

Hope you all benefit from the explanation I provided, and always remember, never quite trading even if you are left with only $1, as there is always a brighter future in the market.

Always DYOR.

My work is dedicated to learning and providing a financially safe future for my one and only daughter.

You can send her gifts, or find out what I am investing for her:

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