Barry Norman's Reviews Technical Indicators For Cryptocurrency



good evening ladies and gentlemen this is Barry Norman I on behalf of tre time and welcome to our webinar on crypto currency and technical analysis now tonight's class is sponsored by tre time one of the most unique trading platforms in the marketplace today they allow you to define your trading objectives customize your own account and trade in the world's largest markets you can customize a range of options to make your account very personal and setup for you you also get a broad range of trading tools featuring daily analysis weekly reviews focus articles and live signals your funds are held in segregated accounts because they are a regulated provider and they offer a they also offer a proprietary platform for trading that exceeds into industry standards now as you can see on the screen everything on their platform is easy to see easy to read whether you're looking at market summaries whether you're looking at market trends whether you're looking at news it's easy to get to and you can customize exactly what you're interested in what you want to see what you want to be bothered with their new platform is intuitive it offers advanced charts and indicators you can customize alerts and you can also set up one click trading their live signals are incredible not only do they tell you what asset you should be looking at they tell you what direction they tell you what the first objective is where the second is where you should be placing your stop loss and you can also see how many other traders on the platform are using that same signal and trading from that signal at the same time so if you have time go to WWE a time comm and set up a demo account you can customize and set up your own platform even before you for a demo account so you can use it plus they offer a broad range of educational experiences so that you can sharpen your trading skills and you get access to the next generation trading platform it easy to use easy to see friendly trading environment next tonight's class is being recorded you can see a recorded version of this class in about 24 hours by going to wwm best ENCOM locate the education tab and then go look for webinars on demand so while we're in class if you go to WWE I'm calm you can output open a demo account and follow along with us throughout the demo account there's no credit cards required all you have to do is give a username and a password and you'll be ready to use their demo account so let's get started talking about technical analysis and Kryptos now traders who subscribe to technical analysis operate under the fundamental theory that price moves in patterns and that price never lies so whether you are already own Bitcoin or plan to get some just under or later you want to know how much the crypto coins are worth and when to convert to your currency of choice later you may want to know whether to hang on to your coins or to sell them hopefully making a little profit in the process however analyzing price charts and understanding trading terms from the financial world can be rather daunting especially for the beginning the beginner now forecasting price movements of anything traded at an exchange is risky probabilities game nobody is right all the time many traders have lost lots of money if not their life saving is such attempts the two main approaches to predicting price development are called fundamental analysis and technical analysis our fundamental analysis examines the underlying forces of an economy a company or a security technical analysis attempts to forecast the direction of price based on past market data volume and volume found on price charts and price action now the first class of analysis fundamental analysis is mostly made up of speeches political headlines profit and loss statements you know comments from CEOs lawsuits and economics data especially economics data gather from every country around the world whether it's jobs data housing data what it what the central bank is thinking of doing what interest rates are moving what the central bank is thinking about doing as far as quantitative easing or raising a lowering interest rates what inflation is and these all fall in this category called fundamental analysis one of the big parts of this analysis is also news but it's very difficult to trade news and headlines you can trade economic events because they come out on a schedule and a precise time but nobody knows when a news event is gonna hit the headlines and how it's gonna affect the market whether it's just the Apple stock and the CEO of Apple stock comes out says are you Apple's stock sale Apple watch sales are skyrocketing that's fine now in most cases they make their press releases after the markets closed but you know there could be an interview in the middle of the day we have no idea how this news or when it's gonna affect the markets we also have very difficult time getting the news first you know the internet today dumps us with so much information that is hard to discern what is the most recent information and what is it out of date not out of date being days out of date by being minutes so it's hard to tell whether the markets had already reacted to that news or not because it's very hard when no Trump says something about infrastructure spending or tax cuts okay he's at 1:59 the markets reacted to it but you see the news the headlines at 2:15 now how do you factor that into your trade and then on top of it when you're trading cryptocurrencies none of this economics data has any effect because cryptocurrency is not affiliated with any individual country is not part of an economic system so speeches and headlines rarely have a tradable effect yes a Friday when a lot of US credit card companies came out and said they would no longer accept or approve processing of cryptocurrencies that had a negative effect on Bitcoin but when were these announcements made were they all made jointly were they made individually when did the hedge funds and the big players get disinformation okay when when was a big company hacked okay you see in the morning news but it was hacked overnight and released in in Asia in the morning it's very difficult so when we come to cryptocurrency we have to rely on the second school of thought which is hectic analysis now technical analysis is more complicated because it relies on chart patterns reading charts and technical indicators which are mathematical calculations and includes these into your decision making process so the first thing you have to do to use technical analysis is to learn how to use charts now there are three major charts out there the way the bar charts line charts and candlestick charts most traders who are using charts for cryptocurrencies trade with candlestick charts and technical analysis and technical indicators are all based on information placed on charts so you need to learn how to read a candlestick chart so candlestick charts display more data than just a closing price each candle shows the opening price the lowest price the highest price of a given time period as well as the closing price in addition the color of the candle body indicates whether the closing price was higher than the opening or lower than the opening candlestick price charts contain a lot of useful information for this skilled traders eyes such as whether a candlestick spread is wide or narrow the body of the candlestick where the closing price is relative to the high and the low but where do we go from here now that you had the introduction of reading price charts a good idea would be to start following bitcoins price development on a daily basis you will inevitably start noticing certain regularities on the charts most probably the trending behavior of prices later on you might remember that this was a point in time where you were drawn into the art of technical price analysis now to the inexperienced eye a financial chart may look more like an unpredictable line of jumbles and colors and marks but these traders are watching price charts to pick up on the subtlest of indicators of where share prices or cryptocurrency prices could be headed next so here let's take a break a break down of the most common technical trader or technical indicators that a trader is watching now when we come to the field of technical analysis it can be broken into many different sectors because the first sector we have our chart patterns chart patterns are things like triangles head and shoulders they're patterns made in price movements that are on your chart and this is an entire science to be able to see these patterns triangles channels wedges there's lots of it there's a tea cup there's pennants there's flags then there's the art of using technical indicators now technical indicators are mathematical calculations that are placed either over top a price on your chart or below the price chart and each one of these tells us something about how price should be moving now technical indicators fall mainly into two categories what are called leading and lagging indicators and these are very important for cryptocurrency because this is about the only way that you can predict where the markets are going to move for cryptocurrency because even price patterns are hard to develop because cryptocurrencies haven't been around that long so seeing longer-term patterns and the charts or how price repeats itself is very difficult you know when Bitcoin was trading close to 20,000 that was at new levels okay when it was in 1816 and never been there before now that it's back down to the 6 and the sevens well it's back at a level it was a couple months ago but it was only at that level for one because his sword right through there so it was only in that level for a very short period of time and it wasn't it ever at that level before and it hasn't been at that level afterward so it's very hard to use these price patterns on charts to give you much information because you don't have any historical value so we tend to use these technical indicators technical indicators of mathematical calculation that can be applied to a assets past price patterns like price volume or other technical indicators technical indicators do not analyze any part of fundamental business technical indicators aren't concerned about news and headlines are not concerned about central banks or US regulators or hacking okay technical indicators are most extensively used by active traders in the market as they are primarily designed for analyzing short-term price movements or to long term investors most technical indicators are of little value now they give us alerts they help predict direction and they help confirm trends now they fall into two categories these are called leading indicators and lagging indicators leading indicators are those who lead the price movement they give a signal before a new trend or reversal occurs lagging indicator are those who follow price action they give a signal after the trend a reversal has started indicators from both categories belong into the following types we have trend indicators momentum indicators volatility indicators and volume indicators and we need to know each of the indicators have fallen each group whether they're leading and lagging because we have to determine which ones of these or which indicators we would like to add into our trading decision making process so the first main group is called trend indicators identifying trends over different time frames are useful because it helps you weed out all the noise of daily volatility any type of trend including uptrend downtrend and sideways trends can be traded for profit so long as it's shown itself to be consistent trend traders use a number number of different indicators to help them figure out what kind of trend and acid is moving in what are the most popular these indicators is moving averages which is represented by a single line that represents the average over a given period of time other examples of these are moving average Convergence and divergence our adi parabolic SAR and linear regressions then the next big category is volume volume of course is the measure the total number of shares or contracts exchanged that trade in any given time period so in cryptocurrency would be how many coins were sold or traded where volume really comes in handy as a confirmation many traders use volume to confirm the conclusion of another type indicator such as trend so if you were to see Bitcoin soaring or rallying or moving back up or bouncing off bound and you wanted to know if it was really going to move into an uptrend or maybe should I buy now because it's gonna start moving up or should I sell now because it's start moving down volume will help you make that decision because if you see that the volume or number of bitcoins being bought and sold are increasing that tells you the traders agree with the direction of that movement then we have momentum indicators momentum indicators are like speedometers for traders they show how fast an asset is moving in any given direction these indicators are typically displayed is what we call oscillators which fluctuate above and below as baseline to indicate how much positive buying or negative momentum an asset is experiencing arguably the most popular these momentum indicators is that of relative strength index RSI RSI is represented by a chart that tracks a stock's or assets price on a scale of 0 to 100 so let's go look at a live chart let's see what some of these look like so let me pop these up here for okay so here we have a Bitcoin dollar at a 240 hour chart which is a 20-day 20 period 240 minutes with a 6-hour chart I'm not making any recommendations to you I'm just showing you a chart now we can see on the chart that Bitcoin has been falling steadily okay we have a beautiful wedge being drawn here which is drawn on the chart this is on price action but now we see that the price fell down and bounced back up and came above its support zone we also can see in volume which is shown in the bar chart here in the reds and greens the volume has also soared as price hit that bottom line so buyers were jumping into the market to buy as Bitcoin fell below $6,000 we also have below that an indicator in this case called MACD which is giving us what we call bullish divergence and also we're looking at crossovers on the MACD and when the MACD line and the signal line cross each other they are generating buy and sell signals so we're looking at crossover patterns all of these are different indicators but one is giving us volume one is giving us trend indicators and another is giving us momentum okay now there's many different indicators but remember with Bitcoin or any cryptocurrency it's very hard the only thing you have to rely on are these indicators and using one indicator to support another indicator it's very important but not having an overabundance of three trend indicators at one time is also important is to be able to pick the right indicator from each sector so that you have three different pieces of information supporting a conclusion so we've got momentum indicators to tell us how strong or the speedometer we had trend indicators to tell us where the trend is going and we had volume indicators we can move on from there to volatility indicators now volatility indicators is very very important because if you're trading Bitcoin and you're buying or selling you need to be able to put stop losses you need to know how volatile the market is or where the market is swinging because you need to be able to figure out where the actual swing of the market is for that day okay volatility is the measure of how large an assets movement in a given period tends to be when an asset makes large moves in a short period of time it's considered volatile volatility is a very important indicator for traders because volatility makes it easier to profit due to price inefficiencies without volatility trading opportunities would be limited volatility is so important to traders that the Chicago Board of Options Exchange Volatility Index is one of the most closely watched indicators in the entire market in addition to VIX traders can use volatility matrix such as true average true ranges Bollinger Bands and envelopes as trading indicators you need to be able to understand where to put your stop losses where to put your take profits when to enter the market you know and volatility remember when you're trading coins that volatility is what keeps you profit because overall you don't care if you're buying Bitcoin to put in your you know put away for of your retirement account then you just care the Bitcoin steadily goes up but if you're trading Bitcoin or a cryptocurrency you only want the ball Tildy because you want it to go up because the mark is Malta and you get out you want to be at that market as fast as you can if it's the markets high and it's got volatility going down you don't care where it ends up during the day you just care that it falls down you sell you you know you get out of your your your trade and you made profit so you can profit in both directions and you want a profit in short periods of time because you're not looking to make long-term investments so remember we start with trend indicators and those fall as simple moving averages or MACD or parabolic stops and reverses we have two that are lis lagging and one that is a leading indicator remember leading indicators give trade signals when the trend is about to start they try to predict price by using a shorter period in their calculations thereby leading the price movement the most popular leading indicators stochastics MACD and RSI whereas lagging indicator are those that follow price action they give a signal after the trend or reverse has started use them to determine a trend the most common lagging indicator are simple moving averages these technical indicators measure the direction and strength of the trend by comparing price to an established baseline these indicators are designed to show traders and investors the trend or direction that an asset they are trading the trend of an asset can be either down or up or sideways no clear direction trend followers are an example of traders who use trend indicators to analyze the markets from here we go again to momentum indicators which we talked about the three most popular these are stochastics and RSI and CCI they are all leading indicators these technical indicators may identify the speed of price movement by comparing the current closing price to previous closes the stochastic indicator used to predict price turning points by comparing the closing price to its price range or relative strength index measures recent trading strength velocity a price change in the trend and the magnitude of the trend so let's go back over to some live charts for a second and we're gonna take this Bitcoin and we're gonna add on a couple indicators so we have MACD here so let's go down and add RSI which is relative strength index which is one of the most popular now the difference between MACD and RSI RSI you can see down here below and it falls between a chart and it's always between 100 and 0 and the range between 70 and 30 which is the purple range is like you can go dead man zone it doesn't tell you anything when it goes above the 70 level it's telling the market is overbought and when it's below the 30 is telling us the market is oversold whereas MACD above it is a different kind of indicator and is giving us crossovers to tell us entry and exit points the momentum is a measure of speed at which the value of security is moving in a given period momentum traders focused on assets that are moving significantly in one direction on high volume for that they use momentum indicators such as RSI stochastics and CCI as you can see momentum indicators are especially composed of oscillating indicators that are usually used to determine overbought and oversold indicators positions which is what you saw on the RSI above 70 and below 30 then we have volatility indicators volatility indicators include Bollinger Bands moving average true rate and standard deviation they measure the rate of price movement regardless of direction this is generally based on the change in the highest and the lowest of historical prices so one of the most popular and well-known is called Bollinger Bands & Bollinger Bands is dropped over top as one of the few indicators has actually dropped over price movement right onto your chart and what we can see is the green area up here is the Bollinger Band and then narrower where the band is the less volatility there is in price the more volatility we have in price the wider the band gets so it's allowing us to see price movement or the market volatility in a pattern so that we can then predict how markets are going to move and then all of this is tied to strategies so like we can see down here this is called riding the band when the price stays right on the lower band okay and this tells you that you could trade that asset to go down and it's gonna as long as it stays on that band is going to continue down okay here it moved in the middle of the band and then move to the top of the van and it's trying to violate upper Bann now this is telling you it's got some momentum to move back up and maybe reverse its trend but it's clear-cut patterns of that we can see the volatility in the march to the wider these bands the more volatile the market is and that would help us set our stop losses and our take profit points and also figure entry and exit points into the marketplace and then we have volume indicators these technical indicators measure the rate of price movement regardless of direction volatility is important in trading that you so that you can find several indicators to measure it or use it to generate signals the volatility is the relative rate at which the price of a security was up or down okay and then again volume indicators now my favorite is just using straight up volume but you can use volume ready to change and that's telling you how how many buyers and sellers are actually percentage-wise exiting and entering the market these technical indicators measure the strength of the trend based on the volume of the amount traded the volume of trades is very important component in trading it is for example used to confirm or infirm the continuation or change in a direction then we have overbought and oversold when a security is overbought the implication that buying is pushed the price too far up and a reaction what a price pullback is expected when it acids oversold the implication is that selling has pushed a price far too low an understanding at what point a market is overbought and oversold is important but it really comes down to is why use indicators indicators serve three broad functions to alert to firm and to predict an indicator can act as an alert to study price section a little bit more closely if a momentum is waning it might be a similar watch for a break of support or if there's a large positive divergence building it may serve as an alert to watch for resistance breakout indicators can be used to confirm other technical analysis tools if there's a breakout on the price chart a corresponding moving average crossover could serve to confirm the breakout or if a stock's for an asset price breaks support a corresponding low on an on balance volume could serve to confirm the weakness some investors and traders use indicators to predict the direction of future prices now again we're trading Kryptos you're almost stuck with using indicators and price action because all that we have for these current crypto currencies and all coins are price charts and technical analysis now indicators do exactly that they indicate this may sound pretty straightforward but sometimes traders can nor the price action of an asset and focus solely on indicator indicators filter price action with formulas as such they are derivatives and not direct reflections of price action this should be taken into consideration when applying analysis any analysis of an indicator should be taken with the price action in mind what is the indicator saying about the price action and is the price action getting stronger or weaker even though it may be obvious when indicators generate buy or sell signals the signal could be taken into context with other technical analysis tools an indicator may flash a buy signal but if the chart pattern shows the descending triangle with a series of declining peaks it is most likely a false signal as always in technical analysis learning how to read indicators is more of an art than a science the same indicator may exhibit different behavioral patterns when applied to different in different assets there are hundreds of indicators in use today with new indicators being created every week technical analysis software programs come with dozens of indicators built in and even allow users create their own given the amount of height that is associated with indicators choosing an indicator to follow can be a daunting task even with the introduction of hundreds of new indicators only a select few really offer a different perspective and are worthy of attention and that's why we broke down the five main categories I broke down the three most important indicators in each category strangely enough the indicators that usually merit the most attention are those that have been around the longest time and have stood the test of time when choosing an indicator for analysis choose carefully and moderately attempts to cover more than five indicators it's usually futile it is best to focus on two or three indicators and learner intricacies in and out try to choose indicators that complement each other instead of those that move in unison and generate the same signals for example it would be redundant to use two indicators that are good for showing overbought and oversold levels such as both sigh castex and RSI both of these indicators measure momentum and both have the overbought and oversold levels so remember the difference between leading and lagging indicators as her name applies leading indicators are designed to lead price movement most represent a form of price movement over a fixed look-back period for example a 20-day sigh castex or a 20-period moving average now there are benefits and drawbacks of leading and lagging indicators there are clearly many benefits for using leading indicators early signaling of the entry and exit points is the main benefit leading indicators generate more signals and allow more opportunity to trade early signals can also act to forewarn against a potential strength or weakness because they generate more signals leading indicators are best used in trending markets these indicators can be used in trending markets but usually with a major trend not against it with early signals comes the prospect of higher returns and with higher returns comes the reality of greater risk more signals and earlier signals mean that the chances of false signals and whipsaws increase fall signals can increase the potential for losses and this is why we want to combine leading indicators lagging indicators volume at different categories because remember lagging indicators are named replies lag lagging indicators follow the price action are commonly referred to as trend following indicators rarely if ever will these indicators lead the price of an asset trend following indicators work best with markets and securities there are developed strong trends they're designed to get traders in and keep them in as long as the trend is intact as such these indicators are not effective in in trading or sideways markets if used in trading markets trend following indicators will likely lead to make false signals and whipsaws now for technical indicators there is a trade-off between sensitivity and consistency in a real world we want indicators that is sensitive and not to price movement gives early signals and has a few FASTA close as possible if we increase the sensitivity by reducing the number of periods an indicator will provide early signals but the signals the number of false signals will increase if we decrease the sensitivity by increase in number of periods then the number of false signals will decrease but the signals will wag and this will skew the reward to risk ratio so remember there are many different types of oscillators and indicators there are many to learn out there but pick one or two and use them into your trading and master them and once you have you can then start using technical indicators to trade and again with cryptocurrency it is about the only way that you can actually make intelligent decisions now oscillators are the most effective when used in conjunction with pattern analysis support and resistance identification trend identification and other technical analysis tools by being aware of the broader picture oscillators signals can be put into context it is important to identify the current trend or even to ascertain if a security is trending at all oscillator readings the stimulus can have different meanings in different circumstances by using other technical analysis techniques in conjunction with oscillator readings the chance of success would be greatly enhance now if you want to trade cryptos you have to remember you have to learn to be able to read a chart price action and price patterns on the chart are very good indicators and very good signals for cryptocurrency cryptocurrency worked very well with price patterns support and resistance and a few select oscillators and indicators so on that note I'm gonna say good night to everybody thank you excuse me thank you very much for joining us I go to www.att.com/biz of videos ebooks articles and information on trading with technical analysis and remember technical analysis as a field of everything done on a chart so technical indicators is only one small part of technical analysis and you need to learn how to read a chart properly if you're gonna trade cryptos and then how to start applying the different areas of technical analysis so have a good night thank you very much for joining us and go to

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