Lecture 1: What is the MA daily?
The MA indicator, the English name is Moving average, is called the moving average indicator. MA has the characteristic of trend. Its value is to average the currency price of a certain period of time, and then the trend line made based on this average value is usually relatively stable and does not have sharp fluctuations like the daily K line. It is a trend tracking tool In order to identify whether the trend has ended or reversed, and whether a new trend is taking shape.
Let's take the BTC / USDT trading pair of MXC Matcha as an example. By default, it includes 5-day moving average, 10-day moving average, 30-day moving average and 60-day moving average. The 30-day moving average means the average value of the currency price in the last 30 days, and the other is the same.
The MA moving average can also be viewed as a combined indicator. For example, when the 5, 10, 30, and 60 daily moving averages appear in order from top to bottom. We often call it bullish permutation, suggesting that there is a higher possibility of a rising market.
On the contrary, these moving averages appear in order from bottom to top, and then become short-selling. The bearish pattern is more likely to fall.
This indicator is more effective in mainstream currencies, but less effective in non-mainstream currencies. This is the predictive effect of the MA Moving Average indicator. The intersection of different moving averages sometimes represents a change in the situation and requires extra attention.
Lecture 2: What is MACD?
The MACD indicator, in English, Moving Average Convergence and Divergence, is called the moving average of similarities and differences, which is developed from the double exponential moving average. The fast exponential moving average (EMA12) is subtracted from the slow exponential moving average (EMA26) to get the fast line DIF, and then use 2 × (fast line DIF-DIF 9-day weighted moving average DEA) to get the MACD bar. The change of MACD represents the change of market trend, and the MACD of different K-line level represents the buying and selling trend in the current level cycle.
Both DIF and DEA are positive, DIF breaks DEA upwards, which is a buy signal; DIF and DEA are negative, and DIF falls and breaks DEA, which is a sell signal; DIF line deviates from the K line, and the market may appear reverse Turn; DIF, DEA value from positive to negative, or from negative to positive is not a trading signal.
Taking the BTC / USDT trading pair of MXC Matcha as an example, we can call up the MACD indicator. The blue line is the fast line, or DIF. The red line is the slow line, which is the signal line DEA, and the red bar below is the MACD bar. For example, starting from June 15, the blue line and the red line are all positive. The blue line breaks up the red line and the MACD bar turns from negative to positive, giving a buy signal, and then a new round of rising prices has arrived.
As another example, on November 13 last year, the blue and red lines were all negative. The blue line breaks down the red line, and the MACD bar turns from positive to negative, giving a sell signal. This represents the arrival of a new round of decline, which also represents the predictive effect of the MACD indicator.
From the above two examples, we can see that, similar to the MA moving average, the intersection of the fast and slow lines of the MACD sometimes represents a change in the situation.
Lecture 3: What is RSI?
RSI indicator, English is Relatives Strength Index, Chinese is usually translated as relative strength index, which is a technical curve made according to the ratio of the sum of rising points and rising and falling points in a certain period of time. RSI can approximate the strength comparison between buyers and sellers. For example, if there are more than 5,000 people who want to buy bitcoin among 10,000 people, competing to raise prices will definitely increase. Conversely, if more than 5,000 people compete to sell, the price of the currency will also fall. When RSI is close to the peak, it is usually an overbought signal, and resistance will appear. At the same time, when the RSI approaches the bottom, it represents oversold signals and there will be support.
Taking the BTC / USDT trading pair of MXC Matcha as an example, we can call up the RSI indicator. The pink area is 30 to 70, and the purple line represents the RSI value. We can see that under non-extreme market conditions, the RSI value of BTC always fluctuates between 30 and 70. When the RSI value approaches the peak, the currency price will also reach a recent peak.
When the RSI value approaches the bottom, the currency price will also reach a recent low.
We can also observe the divergence indicator through the RSI and the K line. In a rising market that continues to break through the high price of the currency, if its RSI also forms a trend that is higher than the peak, the increase is benign and the momentum is often maintained.
However, if the RSI does not form a trend where the peak is higher than the peak, but instead the peak is lower than the peak, a divergence occurs. The divergence phenomenon is generally a sign that the currency price is about to reverse at a high level and is a potential sell signal.
On the contrary, in a falling market that constantly breaks through the previous low of the currency price, if its RSI also forms a peak-to-peak trend, the downward momentum will often continue.
However, if the RSI did not form a trend where the peak is lower than the peak, but the peak is higher than the peak, there is a bottom deviation. Bottom divergence is generally a sign that the currency price is about to rebound at a low level and is a potential buy signal. For example, BTC began to break new lows on November 28, 18, but the RSI is higher than the peak. This is the bottom divergence and represents a buy signal. Bitcoin also appeared in the historical bottom of the past two years.
The change of technical indicators and the trading signals issued are the values of the market reflected in the indicators, and also the prior changes of the market. If the market does not change, the indicator will not display and signal. If a buy signal is issued at this moment, and a sell signal may be issued at the next moment, both possibilities exist.
Therefore, the changes in technical indicators and the trading signals issued are still a random process. The technical indicators reflect the past of the market and predict the possibility of future market trends. The analysis of the above basic technical indicators can help investors make basic judgments before trading in order to invest more steadily.