Technical indicators

  1. Bollinger Bands (Technical trend indicator) 

The bollinger bands indicator is a often used one. It is quite easy to apply and that’s why it is popular. Bollinger bands is indicator used to discover trends. It is based on a 20-day average and has a predefined upper and lower limit. 

What does it look like on a chart? 

The bollinger bands indicator is a technical indicator. The image below will show you exactly how it works and what it looks like. 

As you can see it uses the upper and lower bands to give you a indication of volatility. The more distance between the bands, the more volatile it is. The 20 day average is put in to show you if the current price is below or above the average. 

Using this indicator is a good way to find an entry or sell spot. You can do this on a breakout. If the price goes below the lower band it may be a good sell signal. If the price ascends above the upper bands it can be a good buysignal. However, the price may not always follow a trend but bounce back. So a second strategy could be to buy once the price bounces on the lower band, and sell when the price is close to the upper band. 

  1. VWAP (Technical Health indicator) 

The VWAP (Volume-weighted average price) is based on the relation between the current price and the total amount on the market. It is a way to show you how well a coin is being bought in a certain period. This is often used on longer periods.  

Here you can see the way VWAP is calculated : 

VWAP = ∑(amount bought * price) / Total amount sold in a day