Steemit Crypto Academy / Season 4 Week 2 - Homework Post for @reminiscence01 | Technical Indicators.


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Greetings crypmarket.

designed on canva

1a) really appreciate Prof @reminiscence for such a mind blowing class. Technical indicators plays a vital role in the crypto market.

1a) In your own words, explain Technical indicators and why it is a good technical analysis tool.

Technical indicators.

Technical indicators can be referred to as tools used to analyze charts and help give traders better understanding on price movement of an asset. These technical indicators enables traders to foretell the price of an asset in time to come.
Furthermore technical indicators can also be defined as instruments applied analytically to determine the entry and exit point of a particular commodity. Technical Indicators are based on price chart data and are used to detect price movement, it can tell if the price is in an overbought position or rather in an oversold position. Technical indicators enhances the improvement of traders, investors and technical analyst in technical analysis and gives better understanding of price action.

Why technical indicators are good technical analysis tool.

Technical indicators I must say are unique tools that promotes technical analysis. These technical indicators are good analysis tool as they can be used initiate buy and sell signals.
Technical indicators can also be used by traders and technical analyst to gain knowledge about the supply and demand of a particular asset in the market.

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1 b) Are technical indicators good for cryptocurrency analysis? Explain your answer.

Yes technical indicators are of great importance in cryptocurrency analysis.
Technical indicators are good for cryptocurrency analysis as they can be used to foretell price movement of an asset. It shows if a cryptocurrency is experiencing a bullish trend or a bearish trend (uptrend and downtrend). The insight of this price movement enables traders know when to enter into a trade and when to exit a trade (entry and exit point).

Technical indicators are good for cryptocurrency analysis as they can be used to initiate buy and sell signals.

Technical indicators are good for cryptocurrency analysis as they can help crypto traders arrest losses while trading.

Technical indicators tends to be the backbone for every technical analysis carried out in trading. ( Permit me to put it this way No technical indicators, No technical analysis).

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1c) Illustrate how to add indicators on the chart and also how to configure them. (Screenshot needed).

when you want to add an indicator to a chart you visit Link
iMarkup_20210917_051521.jpg

  • After the site loaded I clicked on BTCUSD and the chart of BTCUSD displayed on the screen of my device.

iMarkup_20210917_051350.jpg

  • Afterwards I clicked on indicator so as to add one.
    iMarkup_20210917_051350.jpg
  • A long list of indicators popped up, I needed just one, so I searched for Moving Average (MA).

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  • The chart below shows the Moving Average (MA) indicator that was added.

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To configure The Moving Average (MA), the following steps was taken:

First I double tapped on it and an interface popped up.

  • Afterwards I set the length of the long MA to be 150 and the colour as yellow. Also the short MA as 200 and the color as green.
    iMarkup_20210917_050750.jpg

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  • An example of a configured Moving Average (MA) is shown below;
    iMarkup_20210917_050701.jpg
    Note: this is a Moving Average (MA) BTCUSD.

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2a) Explain the different categories of Technical indicators and give an example of each category. Also, show the indicators used as an example on your chart. (Screenshot needed).

There are different categories/types of technical indicators which will be discussed below.

1. Volume Indicators.

These type of technical indicators comes into play when the strength of a trend is been measured or calculated based on volume of offers or shares exchanged. Some examples of these technical indicators includes: Chaikin Oscillator, On-Balance Volume (OBV), Volume Rate of Change.

  • Chaikin Oscillator: This indicator keeps track of the movement (in and out) of money in the market, this aids in determining tops and bottoms.

iMarkup_20210917_131001.jpg

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2. Trend indicators.

Such Technical indicators are designed to determine the trend of the market. These trend indicators help traders determine the trend (uptrend or downtrend) of an asset. Examples of trend indicators includes: Moving Average, Parabolic stop and Reverse (Parabolic SAR).

  • Moving Average: A technical indicator Designed to assist traders determine trends and reversals, also to set up support and resistance levels. Some other forms of Moving Average are: Exponential Moving Average,Linear Moving Average, Simple Moving Average.

iMarkup_20210917_051113.jpg

3. Momentum indicators

These technical indicators helps traders to know the speed of price movement by analysing the present closing price and the preceding closes. It indicates when an asset is oversold or overbought in the market. Momentum Indicators are also referred to as Oscillator Indicators. Examples of Momentum Indicators includes: Stochastic Oscillator, Commodity Channel Index (CCI), Relative Strength Index(RSI).

  • Commodity Channel Index (CCI): this form of oscillator helps traders and price analyst to detect price reversals, trend strength and a lot more.
    iMarkup_20210917_125331.jpg
    iMarkup_20210917_125542.jpg

4. Volatility Indicators.

These are technical indicators that calculates the rate of price movement, regardless the direction of the market. It helps traders and technical analyst to gain knowledge of the low and high of an asset. Examples of Volatility indicators includes; Bollinger Bands, Standard Deviation, Average True Range.

  • Average True Range: this form of Volatility indicators displays the level of price volatility.

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2b) Briefly explain the reason why indicators are not advisable to be used as a standalone tool for technical analysis.

I must say, indicators don't always send the right signals and as a result of this when used as a standalone tool, it makes traders go into trade (wrong trade) that results to loss of the capital that was invested. Distinct indicators offers different explanations of a market, these different explanations are then compared to give better analysis result.
It is good for every trader to know that it is a bad idea to use an indicator as a standalone tool as they are not completely correct and can send wrong signals. Traders are advised to combine two or more indicators that works perfectly fine together.

2c) Explain how an investor can increase the success rate of a technical indicator signal.

An investor can do a lot of things to increase the success rate of any technical indicator in use by the investor/trader.

  • Time phrase: When to place or carry out a trade is another way to increase the success rate of a technical indicator signal. Placing a trade at the wrong time might result to loss and a decrease in the success rate of a technical indicator signal.
  • Good knowledge of Technical indicators: Gaining good insight of technical indicators will help a trader/investor know which indicator to apply before carrying out a trade. As every indicator has specific role it plays while trading so a good knowledge of Technical indicators will surely increase the success rate of Technical indicators signals.
  • Status of the Market: Having knowledge about the market also plays a vital role at increasing the success rate of a technical indicator signal. Here the investor/tors.

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    Conclw if the asset to be traded is experiencing an uptrend or a downtrend so as to yield a better result with technical indicators.

    Conclusion.

    In a nutshell Technical indicators plays a vital role in the crypto market. For any investor/trader that advised.CC: Prof @reminiscence01 should always apply two or more technical indicators as using technical indicators as standalone tool is not advised.
    CC: Prof @reminiscence


Comments 2


Hello @offia66, I’m glad you participated in the 2nd week Season 4 of the Beginner’s class at the Steemit Crypto Academy. Your grades in this task are as follows:


Criteria

Ratings
Presentation / Use of Markdowns 1/2
Compliance with topic 1.5/2
Spelling and Grammar 1/2
Quality of Analysis 1/2
Originality 1.5/2
Total 5.5/10

Observations:

Furthermore technical indicators can also be defined as instruments applied analytically to determine the entry and exit point of a particular commodity.

This is ideal. You can only predict possible exit and entry positions of price using technical indicators.

Technical indicators are good for cryptocurrency analysis as they can help crypto traders arrest losses while trading.

This is not achievable in the crypto market. Technical indicators can also make you incurr lossess if not used properly.

Recommendation / Feedback:

  • The student have completed the assignment for this lesson.
  • The student also answered all the questions in his/her own words.
  • Your overall presentation is good. But you need to improve your writing skills by working on your markdown styles.
  • Some important points were nissed in your explanation. However, I commend your effort in this homework task.

Thank you for participating in this homework task.

18.09.2021 23:08
0

Thanks for reviewing my assignment Prof @reminiscence01 but I think my total score should be 6 and 5.5.
Please check it out

18.09.2021 23:19
0