How To Make $100 Daily On Binance Using Basic Trading Indicators

Basic Trading Indicators

1. Fibonacci Levels

2. RSI

3. Stochastic

4. EMA

5. Volume

1. Fibonacci Levels

• The Fibonacci retracement tool helps identify potential support and resistance zones on a chart.
• It uses specific percentage ratios for guidance.
• In a downtrend, Fibonacci retracement levels apply these percentages to the pullback.

Fibonacci extension levels, on the other hand, apply percentages to trend reversals.

1.1 Fibonacci Levels

• Fibonacci retracement is frequently used alongside indicators like RSI or Elliott Wave Theory.
• These indicators, when combined with RSI, can be highly effective.
• They help identify connections between wave patterns and potential support and resistance zones.

1.2 Fibonacci Levels

• In an uptrend, Fibonacci extensions are used to set profit targets. Typical Fibonacci extension levels include 61.8%, 100%, 161.8%, 200%, and 261.8%.

In a downtrend, Fibonacci retracement ratios commonly used are 23.6%, 38.2%, 50%, 61.8%, and 78.6%.

2. RSI

• The Relative Strength Index (RSI) value is calculated based on the last 14 candles of the selected timeframe.
• It measures the momentum (bullish or bearish) over these 14 candles.

The RSI approaches 70 when the price is overbought and moves toward 30 when it’s oversold.

2.1 RSI

Overbought Zone:

• An RSI reading above 70 typically indicates that the price is overbought, suggesting the market may drive the price lower.
• Use tools like Bollinger Bands to confirm signals generated by the RSI.

For accuracy, prioritize higher timeframes (4H-1D) when analyzing with RSI.

2.2 RSI

Oversold Zones:

• Oversold areas are typically between the 0-30 level on the RSI.
• Avoid buying right at 30; instead, wait for the price to dip further.
• Purchasing in this range on higher timeframes (HTF) can yield long-term profitability.

3.1 Stochastic

• The stochastic oscillator is valuable for anticipating trend reversals and identifying profitable entry and exit points.
• For best results, combine this indicator with the price action being observed.

4. Moving Averages

1. A moving average is a statistical tool that reflects the average change in a data series over time.
2. The two primary types of moving averages commonly used are:
   1. • Simple Moving Average (SMA)
   2. • Exponential Moving Average (EMA)

4.1 Moving Averages

1. Simple Moving Average (SMA)The Simple Moving Average (SMA) calculates the average of a data series over a set period, giving equal weight to each data point. It is useful for identifying long-term trends but can be slow to react to recent changes.
2. Exponential Moving Average (EMA)The Exponential Moving Average (EMA) gives more weight to recent data, making it more responsive to price changes. This allows it to react faster to trends and reversals, making it ideal for trading strategies that require quick responses.

5. Volume

• Low trading volume can indicate a lack of interest in either buying or selling.
• Low volume in a downtrend is bullish, suggesting a potential reversal.
• High trading volume that accompanies rising prices can signal a bullish uptrend, indicating strong market interest.
• Conversely, high volume during a downtrend confirms the strength of selling pressure.

Volume spikes during consolidation phases can indicate the start of a breakout or trend shift.

In conclusion, using technical indicators like Fibonacci levels, RSI, Stochastic, moving averages, and volume analysis can help traders make informed decisions. Combining these tools with good risk management enhances the chances of success in trading.