Everything you need to know about technical indicators in cryptocurrency screening
Technical indicators are mathematical calculations based on price, volume, or open interest data. They help traders identify trends, momentum, volatility, and potential buy/sell signals. In crypto screening, indicators like RSI, MACD, and Bollinger Bands help filter cryptocurrencies to find trading opportunities.
RSI (Relative Strength Index) measures momentum on a scale of 0-100. RSI above 70 indicates overbought conditions (potential sell), while RSI below 30 indicates oversold conditions (potential buy). In the screener, filter for RSI < 30 to find oversold coins or RSI > 70 for overbought coins.
MACD (Moving Average Convergence Divergence) shows the relationship between two moving averages. When MACD crosses above the signal line, it's bullish. When it crosses below, it's bearish. Filter for MACD > 0 for bullish momentum or MACD < 0 for bearish momentum.
Bollinger Bands consist of three lines: upper band, middle band (SMA), and lower band. When price touches the lower band, it may be oversold. When it touches the upper band, it may be overbought. Filter for coins where price is near the lower band for potential buys.
SMA (Simple Moving Average) calculates the average price over a period equally. EMA (Exponential Moving Average) gives more weight to recent prices, making it more responsive to price changes. EMA reacts faster to trends, while SMA is smoother. Both help identify trend direction.
Yes! Combining indicators provides stronger signals. For example, filter for RSI < 30 (oversold) AND MACD > 0 (bullish) for a strong buy signal. Or RSI > 70 (overbought) AND price near upper Bollinger Band for a sell signal. Our screener allows multiple indicator filters simultaneously.
Different timeframes show different signals. Daily charts show longer-term trends, while hourly charts show short-term momentum. Our screener uses daily data by default. For day trading, focus on 1h-4h indicators. For swing trading, use daily indicators. For long-term investing, weekly indicators work best.
No indicator is 100% accurate. They're tools to help identify probabilities, not guarantees. Technical indicators work best when: 1) Combined with other indicators, 2) Used with volume analysis, 3) Confirmed by price action, 4) Used in appropriate market conditions. Always do your own research.
Volatility measures how much a coin's price fluctuates. High volatility means large price swings (higher risk/reward), while low volatility means stable prices (lower risk/reward). Filter for low volatility coins for stability or high volatility for trading opportunities.
RSI divergence occurs when price and RSI move in opposite directions. Bullish divergence: price makes lower lows but RSI makes higher lows (potential reversal up). Bearish divergence: price makes higher highs but RSI makes lower highs (potential reversal down). This requires chart analysis, not just screening.
Technical indicators are more useful for trading than long-term investing. For investing, focus on fundamentals: project team, technology, use case, adoption, and market position. However, indicators can help identify good entry points even for long-term positions.
RSI is the best starting point for beginners because it's easy to understand (0-100 scale) and clearly shows overbought/oversold conditions. Start with RSI filters, then gradually learn MACD and Moving Averages. Avoid complex indicators until you understand the basics.
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