Steemit Crypto Academy Contest / S14W5 -Exploring STEEM/USDT trading

By the use of MACD you can identify buying and selling signal at STEEM/USDT pair by following the following points I am explaining.

If MACD line is crossing above signal line then buying signal would generate as a result and it would indicates positive momentum increase.Similarly,when we talk about selling signal then it generates at crossing of MACD line below signal line so it shows increase in negative momentum.

When we talk about Bollinger band then upper and lower band at STEEM/USDT pair shows the resistance and support areas in respective way.Upper band shows a level of price that acts as resistance level so it means that price could find it harder to move above it.

When we talk about lower band then it shows that there is a support level and price would find it difficult to move below than a particular level.

Most important thing is that these indicators are just tools so that you may make some informed decisions but if we say that they are totally foolproof then it's not true so other factors and personal research is must before making any decision.

Combinations of relative strength index and moving average can be very helpful in the combination of entry and exit points for the STEEM/USDT pair.

Relative strength index is a kind of oscillator that helps in the measurement of speed and change in the price movement. This momentum oscillator have range from 0 to 100 Which is used in the identification of overbought and oversold conditions.

If value of relative strength index is above 70 then it means that a particular cryptocurrency is over buying and you do this there is a correction in market. Similarly if relative strength index is less than 30 then it means a particular cryptocurrency is overselling and there is a chance of bouncing back of it.

When we combine RSI Read moving averages then it gives us clear understanding of the entry and exit points. For this weekend take an imaginary example that if the price at STEEM/USDT Is going above the moving average and relative strength index is showing a condition of overselling then it would be an entry point for potential buying because condition of our selling indicates that price may bounce back and forth that reason it is above the moving average which results in more confirmation of it.

If the price of a particular rate to currency is below moving average and relative strength index Is indicating a condition which is related to overbuying then it is indication of exit point which is a point for selling so the situation of over mine shows that the price may correct itself and tax why it is moving below from the moving average for is confirmation.

When we talk about the implementation of stochastic oscillator then it shows comparison of a particular currency with its price range within a specified period of time. It also ranges from 0 to 100. Just like relative strength index it is also helpful in the identification of overbuying and overselling conditions.

If stochastic Is more than 100 then it is the annotation that a particular cryptocurrency is over buying and bearish trend is on horizon and if it is below then 20 then it means that a particular asset is at overselling and get to this bullish trend is at horizon.

Then we talk about stop loss orders then they are very important while trading STEEM/USDT or any other pair than these are useful in the prevention of different losses by automatic trigger of a selling order when price is reaching at a predetermined level.

Then we set stop loss depending upon the technical analysis then it involves the identification of support levels at chart.Areas in which price have difficulty in falling below historically ,these areas are called support levels and by the placement of stop-loss below these support levels you can protect capital in the case if price breaks down.

If I give an example then suppose that if you have find for you have identified are strong support level at STEEM/USDT chart which is around $0.50 then you can set stop loss suppose at $0.48 or little bit low than this. If price is going down then this level then the stop loss order would be triggered automatically and you would exited by the trade for limiting your loss.

Diversification of the position is very important while trading at STEEM/USDT pair or any other cryptocurrency. It is really very helpful in spreading out your risk if you have and it would help in the reduction of impact about any single trade at overall of your personal portfolio.

When you are diversifying then it means that you are allocating your own capitals across different cryptocurrencies so in this way if there is any trade which is not going according to the plan then there is no need to disappoint at that time because you have other ways and other positions that can offset the losses that you have already so it is just like your safety while having trading.

You can avail different positive opportunities in the market by the help of diversification because different cryptocurrencies and different pairs have different movements of price that's why by the diversification you can take benefit from multiple conditions in the market but it is very essential to consider that there is no guarantee of profits for protection against the losses by the process of diversification but you can say that it is a management strategy that can help to minimise the effects of your losses but again I am saying that you should make a proper research before entering into any trade without thinking about diversification.

Before taking long and short positions in STEEM/USDT we can consider the following important factors that I am describing below.

• External announcements about any cryptocurrency or STEEM can have a great impact at trading of STEEM/USDT pair. Positive news in the form of platform upgrades for any adoption by the major companies can be helpful in the increase of demand of steem which in turn increase in its price and if we talk about negative news then it could bring the price down.

• Trading of STEEM/USDT is also influenced by the overall sentiment of market. If in the market sentiment is regarding bullish trend then it would drive up the price of steem and if in the market sentiment trend is bearish then it would drive down the price of steem. It is important to keep eye on the market sentiment also so that you may gauge the direction of the pair in a potential way.

• Use of steem as a kind of social media platform can also play a great role in it because if there are more users joining the platform that definitely there would be more content at the platform and it would increase in the demand of STEEM token which would be beneficial thing and vice versa.

• Before making the decisions regarding trading this is very important to keep in mind the competitive landscape and market position of STEEM. If you analyse and you would compare STEEM with other social media platforms or blockchains then it would let you know about the potential regarding growth of this token. If there would be some of the unique and competitive features in STEEM than other competitors then it would be a kind of positive effect at it.

• When we talk about regulatory environment then they are also very influential regarding the trading in STEEM/USDT. If I talk about changes in the regulations then it is very helpful and impactful regarding the perception of STEEM and other cryptocurrencies but it is very important to stay informed according to your research before making any trading decision.

There could be some of the Other indicators then the commonly used indicators that can be helpful in the analyzation of behaviour of STEEM/USDT pair.

• First of all according to me social media sentiment is one of the most important thing in the analyzation of STEEM and USDT. You can know more that either sentiment is positive or negative by having a detailed discussion opinions among the community.

• If I talk about examination of activity of a developer at STEEM then it could be one of the most wonderful indicator. You can easily judge that a project is evolving if developer is very active in activities including code commits ,updates and releases of new features etc.

• USDT is stable coin we all know, So when we monitor the USDT then it could let us know very easily about the market sentiment overall.USDT high demand is an indication of stability in the overall market and its low demand is an indication of less stability in the overall market.

Now I am going to talk about trading volume that how it can be interpreted for the prediction of future in STEEM/USDT pair.

First of all it is very important to know that what is trading volume sweet is defined as number of tokens or number of shares that are traded within specified period of time.

If there is a price movement and volume is increasing in this price movement then it indicates that there is strengthening of this particular trend and I can elaborate it more by giving a brief example that;

If price movements of STEEM is increasing and trading volume also increasing then it means that participation level is increasing which in leading increase in the trend and continuity in the trend

There is an existence of warning sign also that if there is divergence between the price and volume. Let's take a brief example again for understanding it.

If STEEM price is increasing or going upward but in return trading volume is not increasing and it is decreasing then it is the indication of lack in upward movement of trend. So other name that you can use for divergence is weakening in that trend rather than continuity