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Trading Indicators Quick Guide
Trading Indicators Quick Guide

Overview of technical indicators that can help you with MultiHODLs

Updated over a week ago


Understanding various trading indicators is pivotal for analyzing market conditions and making informed decisions. This quick guide explains the basics of so-called technical indicators and helps to improve your MultiHODL performance.

Technical indicators refer to utilizing historical market information to make forecasts or evaluate a specific crypto asset.

There are a huge number of indicators, but generally, they can be classified into several main categories.

1. Trend Indicators

Trend indicators help to identify the current direction of the market trend. The most popular example is the Moving Average (MA).

Moving Averages are trend-following indicators that smooth out price data over a specified period, revealing the price trend.

  • Simple Moving Average (SMA):

    • How it works: The SMA calculates the average price over a defined time period, like a 14-day SMA summing up the closing prices of the last 14 days and dividing it by 14.

Simple Moving Average for MultiHODL
  • Profitable Trade Example:

    • Date: January 16, 2023.

    • Coin: Bitcoin (BTC).

    • Scenario: On this date, the 50-period moving average crossed above the 100-period moving average, signaling a bullish trend.

    • Action: A trader could have entered a long position on BTC.

    • Outcome: Holding BTC from January 25 to June 10, 2023, would have resulted in a +23% gain.

  • Exponential Moving Average (EMA):

    • How it works: Unlike SMA, EMA gives more weight to recent data, reacting faster to price changes. Due to the fast-paced nature of the crypto market, EMA can often provide quicker entry and exit signals compared to SMA.

2. Oscillators or Momentum Indicators

Oscillators help to assess the strength of the price movement. They fluctuate over time within a bounded range, helping identify overbought and oversold conditions.

  • Relative Strength Index (RSI):

    • How it works: RSI oscillates between zero and 100, where readings above 70 indicate overbought conditions, and below 30 indicate oversold conditions.

  • Profitable Trade Example:

    • Scenario: A trader monitors the RSI for Bitcoin.

    • Action: They might buy Bitcoin when its RSI level falls below 30, indicating oversold conditions, and sell when the RSI rises above 70, indicating overbought conditions.

    • Outcome: On June 22, 2023, the 14-period RSI for Bitcoin was reported at 85, indicating a potential for a short position, as it was overbought territory (RSI of 70 or above)​. The opposite signal of the 14-period RSI (30 or below) on August 18 was the moment to cover the short position. Such a MultiHODL would have resulted in a +14% profit.

Other examples of Momentum Indicators include Moving Average Convergence Divergence (MACD), Stochastic Oscillator, Average Directional Index (ADX), etc.

3. Volatility Indicators

Volatility indicators show the extent of price fluctuations, assisting in gauging market conditions and a potential for price movements.

  • Bollinger Bands:

    • How it works: Comprising three bands—the middle being an N-period SMA, with an upper and lower band at K times an N-period standard deviation above and below the middle band—Bollinger Bands indicate market volatility.

Enabling Bollinger Bands in TradingView
  • Profitable Trade Example:

    • Scenario: Bollinger Bands are used to measure the market's volatility and identify overbought or oversold conditions.

    • Action: Bollinger Bands can be used for different strategies. Let's have a look at the bouncing approach: selling when the price breaches the upper band and buying when the price breaches the lower band. MultiHODL is supposed to be closed when the price bounces back to the middle band.

    • Outcome: During September 2023, the bands signaled two shorts and one long MultiHODL with a total outcome of +10% gain.

Bollinger Bands usage

Other examples of Volatility Indicators include Average True Range (ATR), Donchian Channel, etc.


Mastering technical indicators can significantly aid in analyzing market conditions and making informed trading decisions.

  • Please be advised that no indicator is foolproof, and a reasonable combination of different indicators alongside a robust risk management strategy often paves the way to successful MultiHODL trading.

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