). Because of its simplicity, the chances are you’ve already used this strategy, although perhaps unknowingly. In essence, the strategy works by purchasing a small amount of a cryptocurrency at a set interval, rather than buying everything at once. The key part of this strategy is that you keep buying, regardless of what the market does.
would go down significantly. They strike a valid point - DCA strategies should not be deployed randomly, but rather in certain conditions.for multiple months and has corrected more than 70% from its previous all-time highs, you can deploy DCA techniques with a much higher likelihood of making a positive return
For example, when the RSI makes higher lows while the price pushes for a lower low, this is seen as a strong bullish signal. It shows sellers are losing momentum, and the market is ready for a reversal. The so-called bullish divergence historically results in a significant bounce. Take the recent Bitcoin bottom for example - the market printed one of these bullish divergences right at the lows.
To sum up, moving averages can help you understand the overall trend direction or give you extra confidence when the price corrects into a support level. When using multiple moving averages, crosses of these moving averages can serve as warning signals or as confirmation of a newly-formed trend.
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