For those of you out there who are entirely new to this field, here is a brief intro to how cryptocurrency works. The first cryptocurrency was Bitcoin, the idea of ?? a mysterious online entrepreneur, Satoshi Nakamoto, launched in 2009 in response to the financial crisis that exploded in the previous year. Bitcoin was the first decentralized, open-source, crypto-secure, transparent, immutable cryptocurrency, accessible to anyone globally. These features are now shared by many new alternative currencies, with minor differences and improvements. These centralized intermediaries spend massive amounts each year to improve their security and protect user data.
Now that we’ve covered the basics let’s see what the CCI Indicator can do for cryptocurrency exchanges.
The indicator will always be based on momentum, thus falling under an oscillatory classification regular one. To learn how to use it for daily crypto trading best, first, you need to understand its structure. Much like any other indicator, it is based on a formula that will help you calculate the value. The method is calculated by dividing the result of the Typical Price minus Simple Moving Average with the outcome of multiplying the Mean Deviation by 0.015. What the CCI does is compare the current price to the average rate from a set period. Just like many other well-known indicators, the default CCI period is of 14 periods. A period is represented by the number of price bars included by the indicator in its calculation. In layman’s terms, the slower you set the indicator, the higher the resulted sensitivity. Having such an indicator for, let us say, slots online win real money gaming would be phenomenal. As for the cryptocurrency trading platform, long-term players will choose daily or weekly charts for a higher period, while daily players will go for the lower period, and shorter timeframes.
The CCI strategy is pretty basic and common to all types of trading, not just e-coins in particular. CCI will track any movement higher than +100, generating a buy signal. Subsequently, changes below -100 will generate sell signals or short trade ones. Most investors out there will take action on buy signals, and when sell signals occur, they will exit. As soon as new buy signals arise, they will re-invest. It is a basic strategy, and when it comes to cryptocurrency trading, you could implement it in any automated crypto trading bot.
The first important thing to remember, after understanding the CCI Indicator, is that you can use it on any timeframe, across any market. Traders will mostly use the long-term strategy to determine the dominant trend, and the short-term one, to identify pullbacks and trigger trade signals. However, the plan is not failsafe, so you should always adjust strategy criteria and indicator periods to improve your crypto trading performance.
Investing in, or trading cryptocurrencies is a relatively new way to make a lot of extra cash. It has been for quite some time now, but now many traders new about it. You acknowledge this fact, and if you have not already jumped on the cryptocurrency trading trend, there is still time. If you are only thinking about it, but not wholly decided, you should know that the final decision is entirely up to you. But keep in mind that the Earth will keep on spinning, even if you standstill. Cryptocurrency exchanges are here to stay, and they will be here in the end. The info and strategies presented in this article are only meant to bring you up to speed and give you the minimum necessary knowledge to start investing, or start crypto trading the smart way.
Thomas Glare has a massive interest in cryptocurrency trading. He runs a successful blog, where he educates young traders to survive the financial markets.