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This is very important lecture of technical indicators. Professor explain well about indicator. Especially the portion the types of indicators explain well. I get enough knowledge about indicators. I try to answer all questions that are given by professor for further understanding. Let’s start.

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<center> **Question 1**</center>
## a). In your own words, explain Technical Indicators and why it is a good technical analysis tool.
Technical Indicators are tools that are use in doing technical analyses of a particular asset. Technical Indicators are used to predict the future price of a particular asset. Technical Indicators shows the results based the previous data of asset. Mathematical calculations are added to these indicators that performs operations automatically and shown the results based on previous price behaviour of particular asset. 
The working behind the most of indicators are consist of psychology of traders and previous supply and demand of particular asset. Indicator shows the result based the previous price high, low points and previous closing and opening price. These previous calculations make indicator effective to show accurate the future price. 

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### Why Technical Indicator tool is good in technical analyses.
No doubt, technical indicators are good tools in technical analyses. Because the result presented by the technical indicator are based on the previous price movement of particular asset. We can predict most accurate future price of an asset by using the technical indicator. 
Technical indicators are good tool because there are different types of indicators use to predict the future price. We can figure out the current market trend by using the Trend based Technical Indicator. We also figure out the price swings using the Volatility based Indicators. We can figure out the false buying and selling signal using these indicators.
Indicators are good in technical analyses because we can check the market oversold and overbought point. By using these indicators, we can take entry in market and exit from market at right time. This is why indicators are good in technical analyses. 

![Line.png](https://cdn.steemitimages.com/DQmd2mBhjPzf4NRCV8amhYdQsH7WHJtNgZgWP3bSbpGHexs/Line.png)

<center> **Question 1**</center>
## b). Are technical indicators good for cryptocurrency analysis? Explain your answer.
As we know that cryptocurrency market is highly volatile. Prices are change within slice of seconds. Technical Indicators are definitely good for cryptocurrency analyses. Because technical indicators are consisting of previous calculated data of particular. 
Price are changes on every moment. Technical indicator saves the record of every point where price is change. These indicator shows the result based on these previous records of every moment. This is why the results that shown by indicators are more effective. 
Technical Indicators are good for analyses of cryptocurrency because we can predict the future price though Technical Indicators based on the previous high and low support and resistances. Crypto Market is enough volatile so take timely decision Technical Indicators are used.
We can confirm the current market trend and spot false signal by using the Technical Indicators. When market is on uptrend and downtrend then we can predict the trend reversal by using these Technical Indicators. This is why Technical Indicators are good for Cryptocurrency analyses.
![Line.png](https://cdn.steemitimages.com/DQmd2mBhjPzf4NRCV8amhYdQsH7WHJtNgZgWP3bSbpGHexs/Line.png)

<center> **Question 1**</center>
## c). Illustrate how to add indicators on the chart and also how to configure them. (Screenshot needed).
To apply the indicator on Chart you should follow the following steps.
* Open the chart
* Click on the fx indicator sign.


![image_20210917_084723.png](https://cdn.steemitimages.com/DQmWiSmfpD2nMpn2v1pPxkTYhWrJQXahGuBrcwjxveZN8jt/image_20210917_084723.png)
<center><sub>Screenshot from[TradingView]( https://www.tradingview.com/chart/yULXQ8AP/)</sub></center>
* Then Search for you indicator. Enter the Name of particular indicator.
* Click on the indicator as shown in the figure. 

![image_20210916_113735.png](https://cdn.steemitimages.com/DQmYvV7QEnPABGLN1SG2dDfEs8xgvDZtYvqe9geTsuwM7vr/image_20210916_113735.png)

<center><sub>Screenshot from[TradingView]( https://www.tradingview.com/chart/yULXQ8AP/)</sub></center>
In this you can apply indicator on the char. You can apply any type of indicator by using this method.

![image_20210916_113859.png](https://cdn.steemitimages.com/DQmWqBMHch5iEeWEhSFiNqVcnAoKUjCc7AogtaLzu3ndLZb/image_20210916_113859.png)
<center><sub>Screenshot from[TradingView]( https://www.tradingview.com/chart/yULXQ8AP/)</sub></center>
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### We can configure the indication setting. We can configure the indicator by using the following steps.
* Click the indicator.
* A popup setting tab is shown click on it.
* It will open the configuration and setting window of particular indicator.
* Here the three tab are presented. **Input, Style and Visibility**

![image_20210917_090532.png](https://cdn.steemitimages.com/DQmckDG6yvrQkPiZZJ2GjCxSGa3nvgyxnEAEwbG9dsHmko5/image_20210917_090532.png)

<center><sub>Screenshot from[TradingView]( https://www.tradingview.com/chart/yULXQ8AP/)</sub></center>

**Input**: In this window we can change the different value parameters. Like in ADX indicator we can change length  parameter that is 14 by default. 
**Style**: In this window we can configure the coloring scheme of our indicator lines and backgrounds. 

![image_20210916_114218.png](https://cdn.steemitimages.com/DQmTf5nwiRxAB1eobRgBBCecy3ceHJ3XJanHD3qvegJTUN3/image_20210916_114218.png)
<center><sub>Screenshot from[TradingView]( https://www.tradingview.com/chart/yULXQ8AP/)</sub></center>


**Visibility**: In this window we can customize our indicator. In this tab we can select particular entities that we want display in indicator.

![image_20210916_114316.png](https://cdn.steemitimages.com/DQmZ37nTgiGxYd5cAhCwhSw62Qmwvt88FsSn6BE9WB6p5dP/image_20210916_114316.png)
<center><sub>Screenshot from[TradingView]( https://www.tradingview.com/chart/yULXQ8AP/)</sub></center>


This all about how we can configure our indicator.
 
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<center> **Question 2**</center>

## a). Explain the different categories of Technical indicators and give an example of each category. Also, show the indicators used as an example on your chart. (Screenshot needed).
## 1. Volatility Based 
Volatility Based Indicator are use to measure the swings of market trend. As we know that the crypto market is so much volatile. The price is fluctuated with small period of time. Due to this cause the price makes its low point and high points as well. So, to clearly determine these down swings and up swing trader the Volatility Based Indicators.
Purpose of using these indicators is to find the Low swing point and high Swing point. Trader make an entry to market when market makes low swing point and sell their asset at high swing point. In this way they take profit from this indicator.
Bollinger Bands and Average True Range is an example of Volatility based indicators.

![image_20210916_114733.png](https://cdn.steemitimages.com/DQmUg3BoYF38eK2SKiasgDahjVC52zwXum5PNfnpE6qZ2dm/image_20210916_114733.png)
<center><sub>Screenshot from[TradingView]( https://www.tradingview.com/chart/yULXQ8AP/)</sub></center>

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## 2. Trend Based Indicator

Trend Based indicators are use for determine the trend of market. Trend based indicators helps the traders to know the trend of and the nature of trend. This type of indicators tells the trader that the market is on uptrend or down trend. They also indicate the strength of the trend whether the trend is remained market or not. Strength and weakness of trend is measure by the using these indicators.
Moving Averages, Average Direction Index and Ichim oku Kinko hyo are the examples of Trend indicators. 

![image_20210916_114513.png](https://cdn.steemitimages.com/DQmUXVbzp4PkG7NBnevnCAtfHK5yBUPJaNqGodN11EUy7uW/image_20210916_114513.png)
<center><sub>Screenshot from [TradingView]( https://www.tradingview.com/chart/yULXQ8AP/)</sub></center>

![Line.png](https://cdn.steemitimages.com/DQmd2mBhjPzf4NRCV8amhYdQsH7WHJtNgZgWP3bSbpGHexs/Line.png)
## 3. Momentum Based Indicator
Momentum Based indicators are use to determine the oversold and overbought of market. Momentum Based indicator are also know as Oscillators. Market is overbought and over sold on the bases of supply and demand.  When traders found a reasonable place for buying, they enter to market. Market price is goes up. Momentum indicator help the traders to figure out the overbought point. At this point trader sell their assets and take profit.  They re-enter to market when indicator alert the over sold single. In this way trade use this indicator for trading and take profit from it.
A very famous indication RSI and MACD indicators are examples of Momentum indicators.

![image_20210916_114604.png](https://cdn.steemitimages.com/DQmcozptHWEhQQAH6DMx4MwQhSHjnLMYpySHXTVyT7igYQk/image_20210916_114604.png)
<center><sub>Screenshot from[TradingView]( https://www.tradingview.com/chart/yULXQ8AP/)</sub></center>

![Line.png](https://cdn.steemitimages.com/DQmd2mBhjPzf4NRCV8amhYdQsH7WHJtNgZgWP3bSbpGHexs/Line.png)

<center> **Question 2**</center>
## b). Briefly explain the reason why indicators are not advisable to be used as a standalone tool for technical analysis.
Traders are not advisable to use a single technical tool for technical analyses because single tool is not providing enough satisfied results. If trader use single tool for finding the entry criteria and exit criteria then they caught wrong result. Because in a single tool it is possibility of wrong signal that are displayed by that single tool. 
For instance, if trader want to know the strength of trend, He uses ADX indicator. When ADX indicator is applied on the chart then it shows a single blue line. This single blue line shows the general result about the market trend. If trader only lies on ADX indicator then this indicator shows many wrong crossovers.
If trader want to know the exact result about strength of market trend, then trader should use Direction Indication + and Direction Indicator – for better results. By using DI+ and DI- ADX indicator perform well. Trader can easily figure out the wrong crossovers. 
This is why it is not advisable for trader to not use a single tool for technical analyses. 
![Line.png](https://cdn.steemitimages.com/DQmd2mBhjPzf4NRCV8amhYdQsH7WHJtNgZgWP3bSbpGHexs/Line.png)
<center> **Question 2**</center>
## c). Explain how an investor can increase the success rate of a technical indicator signal.
Investors and traders can increase the success rate of technical analyses by using more one indicator. They should use combination of more than one indicator for getting better results. They confirm the signal by using the two or more indicators. 
For instance, if trader want to sell their asset at highest price, then he uses RSI indicator for finding the oversold and overbought point. If the RSI line go up to the 70 level. Here is a signal of overbought. When the RSI line places just below the 70 level. Here most of the trader sell their asset but the experience traders confirm the sell signal by using the RSI indicator with the combination of MACD indicator. MACD indicator confirm the sell signal. Red line cross Blue line to upward direction then it confirm the sell signal. 

![ETHUSDT_2021-09-17_08-27-16.png](https://cdn.steemitimages.com/DQmao8XWjqCjjFXQVJCDPCmin5vfki3ciyGWU5pB4MJWogJ/ETHUSDT_2021-09-17_08-27-16.png)
<center><sub>Screenshot from[TradingView]( https://www.tradingview.com/chart/yULXQ8AP/)</sub></center>
On the other side trader use Vortex Indicator and MACD indication as combination. They confirm the buy and sell signal with the help of both indicators. In the above figure you can the sell signal is made my MACD indicator at 16 of May. Trader confirms this signal using the Vortex Indication. Vortex Indicator confirm the signal at 18 May. In this trader use combination of indicator.

In this way traders and investor can increase the success rate in confirming the technical indicator signals. 
![Line.png](https://cdn.steemitimages.com/DQmd2mBhjPzf4NRCV8amhYdQsH7WHJtNgZgWP3bSbpGHexs/Line.png)
<center>**Conclusion**</center>
Technical indicators are used to predict the price of an asset. The results of indicators are based on the previous ups and down of price. These indicators have great importance in technical analyses. There are different types of indicators in technical analyses. Trend based, Volatility based and momentum-based indicator are examples of indicators. 

Traders use these indicators for price for casting and also use for knowing the trend of market. They can avoid false type of buy and sell signal by using these indicators. Type of indicators use according the situation. If trader want to know about swing of price, then trader use Volatility based indicators. And if trader want to check the overbought and oversold point then trader use Momentum based indicators. 

Every trader has it own point of view about indicator. They consider any of indicator and for technical analyses. They thought that they get more better results by using a particular selected indicator. It is not advisable for trader to use single indicator for price prediction and other action. They should use more than one indicator and combination of two or more indicator to predict the trend of market. 
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### Cc:
### @reminiscence01
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## Author:
## @azamrai
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