Moving Averages
One of the first indicators used in the technical analysis was the Moving Average. This simple indicator sometimes generates very good signals, That’s why it is important to use it correctly. The use of a brother or shorter moving averages is a subject to the individual strategy, by going long you would look at the 200day moving average, by doing day trading you would look at let’s say 9hour MA.
By looking at this picture you can notice that a particular coin is most of the time moving back toward the MA curve(s). This phenomenon is known as a mean aversion. By buying a coin below or above MA you can be almost certain that the price will move toward that MA. Price is very responsive to the blue curve (7 period), less responsive to the yellow (25) and the least to purple (99). The sorter MA the more responsive. You should use different lengths of MA depending on your strategy. 9 hour moving average if you are a day trader. 99 day moving average if you are a long-term investor. Moving averages can be a good tool in determining value of the currency or bearish vs. bullish trends.
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