As you know, the knowledge of a coin be overbought or oversold can be very profitable for any trader. That’s why it’s very important to identify these states. Moreover, the indicator that help us has already been invented. Well, today we’ll speak aboout Index.
The Index ( ) is a technical oscillator that uses price and data for identifying overbought or oversold signals in an asset. It can also be used to spot divergences which warn of a trend change in price. The oscillator moves between 0 and 100.
Unlike conventional oscillators such as the ( ), the Index incorporates both price and data, as opposed to just price. For this reason, some analysts call the volume-weighted .
There are two possible ways of using this oscillator – diverhence and detecting overbought and oversold regions.
The overbought and oversold levels are also used to signal possible trading opportunities. Moves below 10 and above 90 are rare. Traders watch for the to move back above 10 to signal a long trade, and to drop below 90 to signal a short trade.
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Published at Tue, 27 Jul 2021 07:44:37 -0400