Six Crypto Trading Indicators for beginners - 2.2
You can read 2.1 for more details.
5. Fibonacci Retracement
Fibonacci retracement levels are horizontal lines used to identify potential support and resistance levels based on the Fibonacci sequence. Traders use Fibonacci retracement to determine entry and exit points and to identify price targets.
How it works:
Fibonacci retracement levels are drawn from a swing high to a swing low (or vice versa). The key retracement levels are 23.6%, 38.2%, 50%, 61.8%, and 78.6%. These levels often act as support or resistance levels, where price may reverse direction.
Example:
Suppose you're analyzing the price of Ethereum Classic (ETC) using Fibonacci retracement. If the price of ETC retraces to the 50% Fibonacci level after a strong uptrend, it may indicate a potential buying opportunity, as the 50% level often acts as a support level.
6. Volume
Volume is a measure of the number of shares or contracts traded in a financial asset within a given time period. High volume often accompanies strong price movements and can provide confirmation of a trend.
How it works:
Increasing volume during an uptrend suggests that buyers are active and may continue to push the price higher. But in reverse the increasing volume during a downtrend suggests that sellers are dominant and may continue to push the price lower.
Example:
If the price of Chainlink (LINK) breaks out above a key resistance level with high volume, it may indicate a strong bullish trend, and traders may consider entering long positions. In vice versa, if the price breaks below a support level with high volume, it may indicate a strong bearish trend, and traders may consider entering short positions.
I hope through this discussion the beginner traders can be benefited. Thanks all.
~ Regards,
VEIGO (Community Mod)
I have used Fibonacci retracement and it is a great indicator that provides support and resistance levels. thank you for the information
Today again I see that we have discussed a very nice topic. These things are very important for us. But it is very nice to know details about new things constantly through you. Thanks for sharing with us.
Good content, fibonacci retracement tool is a nice indicator one can utilize in the market to know critical support levels or resistance, it's a useful indicator and for that I appreciate you for sharing on that here.
Six crypto trading indicators will be very useful for beginners, because these things should be known after entering the market.