Ever wanted to trade your IOTA’s ? From IotaShine we encourage you to do “hold”, that means to buy and don’t sell, since this is much less risky than try to increase your porfolio by trading.
However, in case you don’t mind to risk, and you are ready to risk the high probability of losing some of your IOTA’s, we want at least exaplain you a few Technical Analysis indicators that might help you reduce the amount of risk.
As you might now, there is the Fundamental Analysis and the Technical Analysis,
the first one is based on the project itself, making it valuable due its technology, partners, and probability of success; and the Technical Analysis is based on indicators and way to read the graph.
The Two indicators we are going to talk about today, are based in Long Term, don’t expect to make a trade every 10 minutes, this is called Scalping, and its risky, remember that over each trade you are already losing a tinny amount of money in trade fee’s.
You will be buying or selling in your favourite exchange, but since some of them dont allow you to have indicators in the graph, we recommend you to use cryptowat.ch
here you can see the IOTA Graph from Bitfinex exchange: https://cryptowat.ch/markets/bitfinex/iot/usd/3d
The two Indicators we are going to work with are SAR and Heikin-Ashi,
Heikin-Ashi in not an indicator on itself, but a way to represents the candles.
SAR is a “stop and reverse” indicator, and sometimes can work quite well, however, remember it all can be reduced to a 50/50 chance. On Horizontal markets, all indicators fail.
Once you opened the website, let me explain you how to enable those indicators, its very easy and all you need is to move the right-top buttons to have this menu, and enable the options you like, in this case Parabolic SAR.
We are using 3 Days candles in this case, that means every bar is the resolution of 3 days in time price changes.
The system is easy, basically you follow the SAR indicator, and those are the points over and under the graph,
if one day the graph solidifies a dot over the candle, that means its sell day, because probably, the price will keep dropping, and this drop can take quite some time, so relax until there is a reversal, that means when the dot is under the graph, its buy time.
If we check the history we can see there are quite some positive and acurate results over the sell and buy times,
but remember this means nothing! we can’t predict if the graph is going to move side-ways, if that happens, all indicators will end up returning lot of buy/sell triggers, and probably most of them are going to force you sell low, and buy high, until one of them draw a strong point of reversal.
Thats why we recommend you to trade over long candles, since its easier to catch trends.
All indicators like MACD, EMA, MA… you name it, are based on moving averages, the diference is the way they process this data, and overtime they all can return fails.
Lets also talk a bit about the Heikin Ashi, the way Heiking Ashi candles are drawn also lets you see some interesting pattern, since a red candle can become a green candle, and a green candle can become a red candle!
Usually, a red candle is a candle that has closed under a lower price than the last candle, and a green one means the closed price is higher than the last candle close price, meaning price is rising.
However this doesnt apply to Heikin Ashi, and the way it draw the candles is a bit complex to explain it, but lets just say Heiking Ashi is an Indicator on Itself, since as you can see, all red candles are grouped magically, and all green candles are usually grouped too, so in Theory, Heikin Ashi is alrady showing a trend on itself, and when you see a red candle, its highly probable the next candle is also red, and if this keeps going, the price will keep dropping.
So here you have to nice and usefull TA indicators and can help you win, or lose some of your wonderful and hard earned IOTA’s!
Best of Luck, and Let me finish this Article with a Quote of Warren Buffet: