Trader’s Rules: Best Indicators for Market Analysis

Profitability of trading on exchanges depends on the ability to predict the dynamics of coin rates. Experts told what indicators are used in trading digital assets.

Table of Contents

  1. Volume
  2. Moving averages
  3. Exponential moving averages
  4. Moving Average Convergence Divergence Moving Average (MACD)
  5. Relative Strength Index (RSI)
  6. Fibonacci levels. From simple instruments to professional
  7. Stock market influence

Whatever strategy a user chooses, there is always a general pattern to trading: before opening a trade, a trader assesses the probability of reversing or extending the trend, determines the moment to enter and only then places an order.

The result of work depends on accuracy of research of the market before the beginning of trade. It is necessary to understand how the currency rate will change. Besides the fundamental analysis which includes political and economic news analysis, the trader performs the technical analysis.
It is based on the study of the cryptocurrency quotation history. It is believed that the dynamics of the rate is cyclical, and the growth and decline in demand are regularly repeated.

Indicators or special mathematical formulas help the trader to predict the price dynamics. All the basic indicators are calculated automatically in the trading platform. For the convenience of traders, they are located directly on or next to the rate chart.

What indicators and signals should be paid attention to in the first place At present, along with the development of the financial sector, the number of instruments, including those for the crypto market, is growing, says Artem Deyev, Head of AMarkets Analytical Department.

In his opinion, any trader, regardless of his level of professionalism, is better to start and constantly use the following classic instruments:


Volume reflects the level of investor interest in the market, it shows the number of transactions for a certain period of time.

The Volume chart contains green and red candlesticks: the first ones indicate a decrease of market volume, the second ones – an increase. Analyzing the indicator together with the price chart confirms or denies the trend, and allows forecasting the sharp price change: when price chart goes upwards and Volume increases – this is a bullish market signal, Volume increases when price decreases – this is a bearish market signal.

Moving averages (moving average)

The moving average (MA) analyzes the average price for a certain period.

The MA chart is superimposed on the chart of the current price movement, which gives a relative idea of the price trend. If the current price of a cryptocurrency remains above the moving average for a long time, we can assume further growth. If the real price lies below the moving average, this is a signal of its decline.

Exponential moving average (exponential moving average)

EMA – this type of moving average, which gives priority to the most current data, which helps to know the direction of the trend more accurately.

That is, it helps to predict for the medium term.

Moving Average Convergence Divergence (MACD)

MACD is a moving average convergence-divergence indicator.

A positive MACD indicates an uptrend. As the curve approaches the upper signal line, it is a good time to buy, known as a bullish crossover. A negative MACD indicates a downward trend.

Relative Strength Index (RSI)

The Relative Strength Index indicates an overbought or oversold market.

It indicates the weakness or strength of a cryptocurrency through previous changes in its price. These changes indicate whether an asset has been overbought or oversold.

Fibonacci Levels

Fibonacci levels help predict entry and exit points and tell traders when to buy or sell an asset.

From simple tools to professional ones, it is essential to understand the indicators and understand what they show and what trade signals they generate.

After that, all the indicators will become easy for the trader, believes BitRiver financial analyst Vladislav Antonov. According to him, the trader first goes through all indicators he likes and chooses three of them, on the basis of which a trading system is written.

The analyst advises not to use more than three indicators because contradictory signals will not let a trader enter the market. He explains that the simpler the system, the more profitable it is.

“It is not bad to start studying volumetric and cluster analysis right away. Indicators are good, but without volumetric analysis it is impossible to see the balance between supply and demand,” Antonov added.

To analyze the market you can use a cross-numbers graph or clusters, said the expert. He explained that you can build price bars by volume.

“There are many tools. You can choose according to your taste and color,” Antonov concluded.

Traders often focus on moving averages, said Cryptorg platform CEO Andrey Podolyan. The expert also mentioned indicators like RSI, MACD, which can be used to determine the overbought/oversold levels, as well as divergence and convergence indicators, indicating the market instability and the end of the trend.

“The volume indicators are also very important, the top traders trade through specialized terminals, where the main attention is paid to the entering/exiting volumes,” the expert added.

Podolyan mentioned that there are many self-written indicators. He explained that the trading terminals of stock exchanges and brokers are tightly integrated with TradingView service (trading tool), so anything can be displayed on the chart.

The influence of the stock market

The top coins with high liquidity have the same market principles as the stock/currency market, says Cryptorg platform CEO Andrey Podolyan.

He said that many traders working in standard markets are already actively trading cryptocurrency and, accordingly, apply the same rules.

“Cryptocurrency has a close connection with the stock market, so you can apply the same methods of technical and graphical analysis,” BitRiver financial analyst Vladislav Antonov agreed with him.

According to the specialist, cross-market analysis is necessary for cryptocurrency trading, because a comprehensive approach is needed.

“Now cryptocurrency has a close connection with the stock market, so the dynamics of stock indices play an important role in determining the external background to risky assets,” the expert concluded.

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