Basic Explanation of Weighted Moving Average (WMA) indicator to Trade Cryptocurrencies following Recent data
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Assalam-o-Alaikum Steemians !
I'm @moneyster, a professional level Cryptocurrency investor and an analyzer. As usual, today I thought to share another Crypto-related experience with you. I hope this article will be considerably beneficial for all the Steemians in this community
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Weighted Moving Average (WMA) is a line-based indicator that we can use as a substitute for basic indicators such as Moving averages and Exponential Moving averages. However, here we can see the main difference between other Moving averages and this Weighted Moving Average.
We can mostly use this Weighted Moving Average indicator for short-term Tradings such as scalp Trading strategies. Because this indicator focuses more on recent price data as compared to past price data. Therefore, the volatility of this Weighted Moving Average indicator is very high as compared to other Moving Averages.
We have the ability to customize input settings and the appearance of this indicator according to our needs. However, there are some popular input lengths that we can use with this Weighted Moving Average indicator.
As I said before, this indicator provides better opportunities by considering recent price data. So, this Weighted Moving Average is quite unsuitable to use with long-term market predections.
Interestingly, here we can also use two Weighted Moving Average indicators in the same chart with different lengths. Then, we can use these Weighted Moving Averages for crossover Tradings such as bullish and bearish crossover.
This Weighted Moving Average (WMA) indicator is a very profitable indicator when we trade cryptocurrencies in a trending market. With the help of this Weighted Moving Average (WMA) indicator, we have the ability to do quick tradings in the short term and make more profits. If we are able to use two Weighted Moving Average (WMA) indicators in the same crypto chart, we can easily take more trading opportunities using the WMA crossover trading strategy. Here we can easily manage our risk by looking at major support and resistance zones in the chart and setting up a tight stop-loss order.
First of all, I will add this RWeighted Moving Average (WMA) indicator to my Crypto Chart using the TradingView platform. Then we can go to "Indicators" thought to tool panels and search "WMA" in the giver search bar. Below I have included a screenshot to demonstrate adding the RSI indicator to our chart.
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Here I have taken 200 Period Weighted Moving Average (WMA) settings as its input length. Below I have demonstrated some good zones provided by this Weighted Moving Average (WMA) indicator. Here we can see good zones to buy our assets or take a buy entry when the price movement breaks the Weighted Moving Average (WMA) indicator line upward. Here a proper bullish candle should be closed above the Weighted Moving Average (WMA) indicator line to take our entry.
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In this way, we can easily use this Weighted Moving Average (WMA) indicator in the chart and take more accessible trading opportunities. However, we can try to combine this strategy with some other indicators to increase the winning percentage.
At the same time, as I said in my previous article, we should remember that all the indicators and strategies are not efficient completely as nothing we can find 100% efficient in the world. So, we should depend only on these strategies and indicators to confirm our trading opportunities.
I have studied the below-sourced articles to study these topics further, and I have explained all the above facts in my own words and experience.
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You have posted on a very important topic. I learned a lot through your post. Thank you.
It's really a pleasure to hear that. Stay with me to read more crypto-related articles in this community.
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Thank you very much for the positive feedback. I really appreciate it.
I like your post.
It is quite educative
Thank you very much for your positive feedback. I hope to see some good articles from you too. Keep commenting and engaging with other mates in this community. You have a long journey with us.
Have learned a lot from this post, keep sharing great topics like this with us
It is really a pleasure to hear that was useful to you. Stay with me to read more related articles.