Hello everyone. A very warm welcome in third week of 6th season. The professor @abdu.navi03 has taught us median indicator. This is my homework task
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1. Explain your understanding with the median indicator.
Crypto market is highly volatile. Prices keep changing because of the behavior of the traders. So before stepping down in crypto market, the traders first analyze the market to predict its future. The market can be analyze in multiple ways. Some can use the indicators to analyze the market future or predict the future price or determine the current trend, etc. One can use the chart line to evaluate the performance of the coin. One can use the line chart to determine where the trending in moving. So there are different tools and ways to analyze the market.
Median tool is also a technical based indicator which help to identify the market trend. The traders basic need to take any trading decision is to identify the market trend. Only then they can take any action or place any order. Identification of trend is very important in crypto market. Median indicator is very effective and useful for this purpose.
This indicator is simple to use and easy to understand. It identify the price direction and measure the price volatility. Over, this indicator is really helpful because one can measure the mean value of high and low over a certain time period. This indicator have the upper and lower band and a think line which move above and below following the movement of price.When the price is rising up while passing through EMA line , the color of the indicator think line turned into green, the green color indicate that there is uptrend in the market. Buyers are in control and price is moving from down to top.
This produce the buy signals On the other hand, when the line color turn into purple, it indicate that the coin is falling and market is in bearish trend.
Key Points
Median tool is also a technical based indicator which help to identify the market trend.
The traders basic need to take any trading decision is to identify the market trend. Identification of trend is very important in crypto market.
Median indicator is very effective and useful for this purpose.
This indicator is simple to use and easy to understand.
It identify the price direction and measure the price volatility. Over, this indicator is really helpful because one can measure the mean value of high and low over a certain time period.
This indicator have the upper and lower band and a think line which move above and below following the movement of price
2. Parameters and Calculations of Median indicator. (Screenshot required)
To discuss the parameters of the median indicator, first we need to add the Median indicator on some chart. For this, one can use the coinmarketcap.com, tradingview.com, etc. I have used tradingview.com.
First i added the median indicator. I go to the indicator section and search for the median indicator.
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Then i clicked on it and it got added on chart.
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It have the following parameters
- Upper band
- Lower band
- Median EMA line
- Median
- Median length
When we click on the setting icon, we can change its setting. By default, the upper band is the median upper band with color green. The think line of the upper band is the resistance level. The lower line is color purple which act as the support level. Median EMA and Median line are bound with each other. They move ups and down along with movement of price. When price cross the EMA and move upward, the Median line turned in green.
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When the price move downward, the line color change into purple. Median has length 10 which is length by default but we can change it too. We change it according to our trading strategy. This is use in calculation of the median length
Mathematical calculation of Median indicator
Median = (Phigh - Plow)/2 P = price
Upper band = Median + 2 ATR
Lower band = Median - 2 ATR
EMA value =( Closing price x Multiplier) + EMA prev x (1 - Multiplier)]
Median Indicator M I = ATR %change ( Median, EMA Value)
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3. Uptrend from Median indicator (screenshot required)
The trend is said to be the uptrend when price is rising upward while creating the higher high and high low waves. The coin move from down to top, the market is in uptrend. There are a lot of ways to identify the market trend. Traders can use the tools, indicators, market structure, etc to identify the market trend.
The Triangular indicator is very helpful to identify the market trend. The trend is said to be the uptrend when the median line cross the EMA line and move upward. The median line turn its color from purple to green. The green color Median line show that the market is trending upward. The coin is rising and the buyers are in control.
In the above screen short, we can see that the coin was in downtrend at first. The color of the median was purple. The coin started rising and the color of median turn from purple to green. The thick line of Median crossed the EMA line and started moving upward. This indicate that the bullish trend is started and the traders can place the buy order now.
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4. Downtrend from Median Indicator (screenshot required)
The trend is said to be the downtrend when price is falling downward while creating the lower low and lower high waves. The coin move from top to down , the market is in downtrend. There are a lot of ways to identify the market trend. Traders can use the tools, indicators, market structure, etc to identify the market trend.
The Triangular indicator is very helpful to identify the market trend. The trend is said to be the downtrend when the median line cross the EMA line and move downward. The median line turn its color from green to purple. The purple color Median line show that the market is trending downward. The coin is falling and the sellers are in control.
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In the above screen short, we can see that the coin was in uptrend at first. The color of the median was green. The coin started falling and the color of median turn from green to purple . The thick line of Median crossed the EMA line and started moving downward. This indicate that the bearish trend is started and the traders can place the sell order now.
5. Identifying fake Signals with Median indicator(screenshot required)
The effectiveness of the indicator get increase when we combine two indicator together. The triangular indicator is very effective and useful indicator to identify the market trend. This indicator is very popular among the traders can give clear and clean market structure. But when we combine a non trend based indicator with median indicator, its effectiveness get enhanced and we are able too to identify the false signals In the below screen short, i have combined both RSI and median indicator to identify the trend and to filter out false signals.
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In the above screen short, the RSI indicator entered into the overbought region which indicate that market is going to fall and there will be downtrend. It produce the sell signals. But we first need to check what signals, the median indicator is producing. The median indicator did not turned into the purple, which mean that the uptrend is not yet finish. The market is still rising. So this is not best selling spot but price is still expected to rise up. So here the RSI produce the false signals.
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For a valid entry, we need to check both signals. If the RSI produce the sell signal and the coor of thick line of median also change from green to purple, this show that trend has been change from bullish to bearish and it produce the sell signals.
6. Open two demo trades, long and short, with the help of a median indicator or combination that includes a median indicator (screenshot required)
Sell order
In the below screen short, we can see that the coin was in uptrend at first. The color of the median was green. The price was rising upward while creating higher high. But then the coin stop rising more and take turn toward downtrend. The coin started falling and the color of median turn from green to purple . The thick line of Median crossed the EMA line and started moving downward. This indicate that the bearish trend is started and the traders can place the sell order now. The traders can now set stop lose, take profit and then can execute their sell order.
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Buy Order
In the above screen short, we can see that the coin was in downtrend at first. The color of the median was purple. The price was falling downward while creating lower low. But then the coin stop falling more and take turn toward uptrend. The coin started rising and the color of median turn from purple to green. The thick line of Median crossed the EMA line and started moving upward. This indicate that the bullish trend is started and the traders can place the buy order now
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Conclusion
Median tool is also a technical based indicator which help to identify the market trend. The traders basic need to take any trading decision is to identify the market trend. Identification of trend is very important in crypto market. Median indicator is very effective and useful for this purpose. This indicator have the upper and lower band and a think line which move above and below following the movement of price. It identify the price direction and measure the price volatility. Over, this indicator is really helpful because one can measure the mean value of high and low over a certain time period. This indicator is simple to use and easy to understand. When we combine it with a non trend based indicator, we can filter out the false signals and can trade in profit.
Many thanks to professor @abdu.navi013