🎯 To avoid overwhelming yourself with the hundreds of indicators that exist, I have prepared a Mini-Plan of Indicators with the three most effective ones to start:
🛠️ Flight Plan: Key Indicators
▪️RSI (Relative Strength Index): The market thermometer (detects if something is "expensive" or "cheap").
▪️Moving Averages (MA/EMA): The price smoother (tells us the direction of the trend).
▪️Volume: The lie detector (tells us if the movement has real strength).
🌡️ 1. The RSI: The Thermometer of Ambition and Fear
The RSI is an oscillator that moves on a scale from 0 to 100. Its function is to tell us if a crypto is Overbought or Oversold.
🔺 Overbought (Above 70): The price has risen a lot and very quickly. People are euphoric. Beware! It is likely to drop soon because many will want to cash in their profits.
🔻 Oversold (Below 30): The price has fallen too much. There is fear in the air. It is an area where the price tends to "bounce" back up because it is "cheap".
> Analogy: Imagine that the RSI is like an elastic band. If you stretch it too much upwards (70+), sooner or later it will snap back to the center. If you stretch it too much downwards (30-), the same will happen. >
💡 Learning Activity: "The Occasional Trader"
Imagine you are looking at the Litecoin chart. The price has risen non-stop for 3 days and suddenly you look at the RSI indicator and see it at 85.
Question: Based on what you just learned, would this be a good time to "join the party" and buy, or would it be smarter to wait for the price to rest?
What would you do with that RSI at 85?
> Metacognitive Strategy: Learning to use indicators requires patience. It’s not about trading every time the indicator moves, but waiting for the indicator to confirm what you are already seeing on the candles. Patience pays more than speed in trading! >
