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Top Indicators to trade Cryptocurrency CFDs

In this study, we are going to provide trading experts with knowledge about the best indicators to trade cryptocurrency CFDs. We will instruct you about the use of the Camarilla indicator, levels of support and resistance, the MACD indicator, and patterns.

Among the infinite types of different pivot point indicators, the most popular are Murrey Math and Fibonacci indicators. The same with cryptocurrency indicators. Trading skills can be applied and function on the other markets, like, for example, cryptocurrencies. An example of a great indicator for trading the cryptocurrency is Camarilla. 

We recognize it to be an amazing technical indicator for the next reasons:

  • We can spot levels of support and resistance
  • The trend becomes easier to predict
  • It brings conflux to our charts
  • It shows when the prices were following either the bear or the bull trend.  
  • It spots triggers
  • The indicator understandably displays entry and exit points

Having taken a closer look at Camarilla, it is easy to spot how convenient is it and the advantages that it provides:

  • Every trading day, the indicator automatically generates potential levels 
  • Full support of pre-fact analysis 
  • The graph is clean and convenient
  • The chart remains simple to read

Just opening the graph with the Camarilla indicator enabled provides us with quite a simple picture, as well as levels of support and resistance. The tool is used by many trading experts in all the global markets.
As seen in the picture, the levels of resistance and support are well-defined and displayed on the Y ax:

  • W L3 – Weekly Camarilla Pivot (Weekly Interval Support Level)
  • W H3 – Weekly Camarilla Pivot (Weekly Interval Resistance Level)
  • W H4 – Weekly Camarilla Pivot (Strong Weekly Resistance Level)
  • D H4 – Daily Camarilla Pivot (Strong Daily Resistance Level)
  • D L3 – Daily Camarilla Pivot (Daily Support Level)
  • D L4 – Daily H4 Camarilla (Strong Daily Support Level)

If you follow someone using the Camarilla indicator, you might sometimes notice them use levels D L1, D Cm, and D H1. Such levels are the primary support and resistance levels (where the level D Cm shows the pivot point for the given day). The price is considered to be in the stabilization range when it’s in between the H3 and L3 levels. These levels are also frequently used to determine the moment, the price should bounce back. You should be looking for a bounce if there is a noticeable range displayed on a higher time frame. H3 and L3 are the positions that indicate the prices breakout if broken above (or below), H4 and L4 are the primary breakout goals. 

If the price reaches the L4 or the H4 mark, traders should consider either taking profits or waiting longer for the price to reach the H5 and L5 levels. If you have missed the opportunity to buy-in during the first breakout, you might still want to join the deal when the price reaches levels H4 and L4 after the correction or a second breakout.  

Historical Levels of S/R 

In general, the S&R (in short for Support and Resistance) levels are fundamental entities of technical analysis. Understanding how they work and developing the ability to find patterns in the prices’ behavior can be crucial to ensure your profit while trading cryptocurrency CFDs with nsbroker.com you can access gain access to trading CFDs are available for Bitcoin, Ethereum, Litecoin, and other cryptocurrencies.

To put it in a simple way, R&S levels the price range where the trend is likely to change its direction. When the price reaches the support level, it is expected to bounce back and start growing, otherwise, it will perform a breakout. If a price reaches the resistance level, it is likely to start temporarily losing positions.

When a price reaches the S&R levels, it could either bounce back to be in the expected range, or else it might break the level to continue its growth/downside. But what are the odds for both these particular events to occur? There are a couple of factors in play, the main is the strength of the S&R level. If you observe a wider timeframe, you will see that price has a stronger reaction over time.

S&R level work when the price reacts in the following way while reaching them:

  • During the Bull bounce, the price is bouncing from the support level
  • During the Bear bounce, the price is bouncing from the resistance level

S&R is no longer valid when the price performs a breakout:

  • Bull breakout: the price drops below the support level
  • Bear breakout: the price rises above the resistance level

As soon as the S&R levels are surpassed, there are two ways:

  • The support level might become the new resistance level
  • The surpassed resistance level might become the new support level

The importance of S&R 

As we mentioned earlier in this article, the levels of support and resistance are fundamental in the market analysis, here are the reasons why:

  • They are often respected by traders, so people make their trading decisions  on basing on S&R
  • All top-tier analysts use S&R 
  • They are convenient to use, as they are usually marked on all instruments and time frames
  • S&R levels appear during trends, ranges, and reversals
  • Time frames: higher time frames are more important, as a larger part of the market uses these levels
  • They are the best pieces of information when it comes to predicting the “path of least resistance”

Pivot indicator

This masterfully coded indicator is widely used to determine S&P levels of financial markets. It is also used as S&R Bitcoin technical indicator. His main use-cases are:

  • S&R scalping
  • S&R breakouts
  • S&R zones
  • S&R basic indicators

It is truly a unique tool that comes from a modifier that you can find in the indicator properties.

Pivot indicator provides you with a possibility to select any of the nine different timeframes that you can watch simultaneously while watching the current price in the current time frame. As an example, you can trade the 5-minute chart with the H1 pivot points attached to the chart. You can go to the additional options if you want to customize the indicator to look like you prefer. 

MACD Patterns

If we use 5,13,1 alternately to the default 12,26,9 settings, it’s possible to get a visual representation of the MACD patterns for trading cryptocurrency CFDs. Such patterns may be used and implemented in different trading strategies as additional info to decide either to enter the deal or not. Numerous experts agree that the best MACD parameters for a MACD pattern are 5,13,1. 

Let us show you how do traders analyze cryptocurrency CFDs:

  • MACD Bull SHS. This graph represents a Bull-type SHS that signifies a repeal and a potential uptrend shift. In such cases, the entry is made after the pattern is completed.
  • MACD Bear SHS. This is a Bear-type SHS pattern that indicates a reversal with a possible decline. In such cases, the entry is made after the pattern is completed.
  • MACD Bull-type Continuation. A bull-type continuation pattern signifies the continuation of an upside trend. At first, the MACD performs a downside turn from point A, marking a retracement. Consequently, when level A is surpassed by the MACD histogram, it gives a signal for a long entry.
  • MACD Bear-type Continuation. A bear-type continuation pattern signifies the continuation of an upside trend. At first, the MACD performs an upside turn from point A, marking a retracement. Consequently, when level A is surpassed by the MACD histogram, it gives a signal for a short entry.
  • MACD Bull-type 0 Line Rejection. When the graph goes down very close to a 0 level but eventually turns back up, generally, this signifies the trend’s continuation. Arrows A and B indicate the uptrend continuation.
  • MACD Bear-type 0 Line Rejection. When the MACD goes up very close to a 0 level but eventually turns back down, generally, this signifies the trend’s continuation. Arrows A and B indicate the downtrend continuation.

About Author

Jake Simmons

Jake Simmons has been a crypto enthusiast since 2016, and since hearing about Bitcoin and blockchain technology, he's been involved with the subject every day. Beyond cryptocurrencies, Jake studied computer science and worked for 2 years for a startup in the blockchain sector. At CNF he is responsible for technical issues. His goal is to make the world aware of cryptocurrencies in a simple and understandable way.

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