3 best crypto buy-sell indicators easily predict tops and bottoms

Introduction

In this article, we’re gonna be talking about the three best crypto indicators for predicting crypto tops and bottoms. And the reality is that the vast majority of indicators out there are complete garbage. They have no predicting power.

And the reason is that everyone is looking at the same damn indicators. And so if you’re looking at the same thing as everybody else, then the chances are you’re not gonna have success using any of these indicators.

There are three types of uncommon indicators in cryptocurrency.

So I’m gonna talk about three kinds of more uncommon indicators. They’re simple to use. And in my experience, they’ve been helpful. Now, in full transparency, I did learn this from my now partner, his name is Lee Ryder.

He was one of the only guys that I knew who accurately predicted the 2017 market top and then the 2018 market bottom within $1,000 of the top and bottom, which was impressive.

And so I asked him about what indicators and how did he it. And this is some of the stuff that I learneddlet’shim. So llet’s go ahead and let’s dive into this.

So when I’m using indicators, I’m not like a big day trader. So I’m not in and out of the market a whole lot, especially with crypto, I’m kind of a longer-term swing trader or buy-and-holder investor.

But I do use these indicators to know when’s a good time that we could be rolling over and the price could plummet or where’s a good time to actually dollar cost average or if we’re dumping, where’s a good place that I think that we could find some the port.

What is divergence indicator in crypto?

So I’ll explain to you these three indicators. So the first one is something called divergence. And I like divergence because it’s a leading indicator.

With most indicators, most indicators are lagging indicators, meaning that they’re kind of just like telling you what’s showing on the candlesticks, but like they’re behind a little bit, right? So they lag, things like moving averages and most indicators, they do lag.

So the reason I like divergence is because divergence is a leading indicator rather than a lagging indicator. So what is divergence? So if we take a look just at this Bitcoin daily chart, we can see that the price is clearly in an uptrend, right? You can see that here.

What is RSI in crypto and how it works?

However, if we come down to something like an RSI, we can see that the RSI is clearly in like a downtrend. And maybe I should have drawn that a little bit better, but there you go. So you can see that the market is moving up, but the RSI is getting weaker.

So this is something called divergence. And it’s saying that, yes, this move is going in the upward direction, but it’s running out of steam. And generally, when a trend reversal happens, it does not instantly, but the move starts to lose steam.

And you can see that here as it gets weaker and weaker. And if you were looking at divergence here, I mean, you could have pretty easily seen that there was massive divergence forming on the daily chart on Bitcoin, and that’s what happened.

By the way, regarding all these indicators, I like to look at Bitcoin on a higher timeframe chart because the rest of the market pretty much follows Bitcoin, right? Ethereum and altcoins generally are gonna follow Bitcoin.

What will you do next if Bitcoin not doing well?

If Bitcoin’s not doing well, then altcoins are likely to be doing well either. So you can use this as an indicator of when to get into the market when to get out of the market, et cetera. So the first tool that I like is divergence.

You can use it on the RSI, and it works actually at predicting the tops. And it also works pretty well at predicting bottoms. It’s maybe not as obvious here, but I’ll just show you.

So you can see here that that’s in a downward direction, and you can see here the oscillator, the RSI, in this case, is moving upwards, right? So this is just another sign of divergence. And then, I mean, you see it happen all the time. And once you look at it for a little while, then you’ll be able to spot it.

And I’ll show you a little tool later on that will just automatically spot it for you. But there you go, you see divergence again. So you see it happen frequently, and this happens in all markets, in all timeframes.

What is the volume profile in cryptocurrency and how it works?

Okay, the next thing is something called the volume profile. And I don’t mean it like the way that most people see volume profiles. And by the way, this is a different way of looking at a volume profile.

So if I come here, and I find the volume profile fixed range. So now we’re gonna take a look at volume, but instead of seeing it at the bottom of the chart like you normally would, now we can sI’lle it like this. So I’lII’ll just draw it for this period here.

And I can see where the volume is, okay? And just for example, I can see the volume at different price points. So this is how much volume there was at like, what is that? $38,000, right? There’s a lot of volume around here kind of at $38,000. I can also see this big yellow spike here.

There’s a lot of volume kind of around $48,000, right? And I see that there’s not any big volume up until like, you know, up here around 57,000, right? And so this is interesting.

What is a red line in crypto and how to control it?

This red line is called the volume point of control. And this is where the most volume happened from like this data set from basically December 31st of 2020 until now.

That’s where the majority of the volume came in, meaning that’s where the most action happened was right at around 38,000 or so, okay? 39,000 or so. So with that being said, how do we use this to make decisions?

Well, we can use this to make decisions because the price will and the market will kind of get sucked through these what are called volume nodes. To see how there’s a lot of volume right here at like 38,000 and then there’s a lot of volume up here around like $48,000.

Well, in between, there’s not that much volume. In tThese low points where you see very little volume, usually the price just kind of sucks right through there very quickly, okay? Because there’s not much volume historically.

So one other thing that I did find interesting is like, if you look at it, you know, we’ve had this little move up and what do you know, it kind of like played right off of this support, right? And it sucked pretty quickly, right? Just like this past week or so, it went quickly up to this other volume point of control.

How to get resistance in crypto and grow your market?

Which was right around 48,000, and right at 48,000, we’re finally getting some resistance where the market’s starting to, you know, maybe roll over a little bit or, you know, maybe just have a break here because there’s this big volume profile, right? So by looking at this, I would look at this and I’d say, okay, well, if it goes above.

You know, $48,000 or so, it’s likely gonna suck right up back into like $58,000 where the next big volume point of control is like right here.

So this is how you use the volume profile and the beautiful thing about the volume profile is that you can see it at different price points, not at different times, but at different price points, which I think is a lot more helpful for using, okay? Now, I will mention this quickly.

What is the SGA spiral guide algorithm indicator in crypto?

Okay, and the last indicator that is by far my favorite is something called the SGA, okay? It’s called the Spiral Guide Algorithm. It was developed by my partner that I was telling you about that pretty much accurately predicted the 2017 market top and 2018 market bottom.

He wasn’t somebody who was just tweeting about that, buHe bet his wallet that way and made a fortune in the process. And the reason I like it is because it makes trading simple, okay? And I’ll show you how it works quickly and then show you how to put it on the charts.

But basically, the way that it works is it’s comprised of this silver line or this gray line here, and then it’s comprised of this colored line, which is turning from green to red, as you can see here, right? And so the idea is to help you get into these big trends that happen in the market.

Let’s explain about MACD indicator in crypto

I know some people say, look at this, say, oh, it looks just like the MACD indicator. Well, that’s about where the similarities end with this. The code and the calculation are very, very different from the MACD.

And if you code it up and you test it, you’ll see the results of the SGA versus the MACD. I mean, they don’t even compare. So the way that it works, right, is the easiThe best way to trade it is basically when this line turns from red wherein, that’s when you can enter the market.

And so you can see wheree we entered the market back down here around like $12,000, right? And then it came up until like here, okay? Here, I think it went red slightly. So it got us up to like this move, like right here.

So 33,000, is a pretty good trade. And when the market’s reversing, then it just tries to get us out of the market, okay? And it tries to keep us out of those losing trades, right? Or keep us out of that drawdown.

How can I trade automatically with a bot?

And we’ve seen this time and time again with our bot because we’ve coded this up so it’ll trade automatically as well. And it keeps us out of the drawdown a lot of the time. Now, the next thing is we see that it went green again, like right here.

So it rode it up until like right here where it turns red again, right? And that’s the idea of the Spiral Guide algorithm. Now, there are a lot of other ways that you can trade it as well. One of the ways is trading it on this histogram low when it goes from dark red to light red.

This is another one of our strategies that’ll help you get a little bit better entry points. So we’d enter right here and exit when the line turns red, okay? And the idea is to capture the big trends in the market without having to incur all of this drawdown.

As you guys know, if you’ve ever been emotional trading, the drawdown can be scary. Now, the other thing that I like about this is I like that it spots out divergence.

What is a red line called in cryptocurrency?

So you see these red lines? This is spotting our divergence for us, okay? So we can see the divergence there. We could also see this divergence during this bottom here really simply. If you just traded the divergence, you would have pretty much nailed the bottom there, really close to nailing the bottom.

And this is another thing that makes the SGA cool is that not only do we have this trend indicator, but we also have a divergent spotter. The thing that I like most about this is it’s an algorithm and an indicator that not everybody’s looking at.

And it also actually has the edge. When you code it up like we’ve done and you run it across a bunch of different markets, you see that it has an edge, okay? And that’s part of the reason why we built it and put it together.

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