Trading cryptocurrency market using price oscillator

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4 years ago

Price oscillator is an oscillator indicator.

  As an oscillator indicator,the price oscillator is used to measure the momentum based on two moving average,the "fast" and the "slow" moving average thus considered to be the same as MACD.

Price oscillator  is also called percentage price oscillator(PPO).

As an oscillator indicator, price oscillator has an oscillation at point 0.00 and is based on centerline and divergence.

 

Since price oscillator is considered to be the same as MACD and is based on two moving average,it therefore follows that the difference between the two moving average divided by the slow moving average multiplied by 100 will give the price oscillator formula as follows;

 

PPO(Price oscillator)= {(Fast moving average-slow moving average)/slow moving average}*100

 

Since price oscillator is based on centerline and it has an oscillation at point 0.00,it therefore follows that when the price oscillator curve rises above 0,that will be an indication of an upwards market thus the trader should be trading in an upwards direction while when the price oscillator curve falls below 0 that will be an indication of a downwards market thus the trader should be trading in a downwards direction.We will not further use chart to explain the concept of centerline. Instead,we will use chart to explain the concept of divergence for price oscillator since it is considered to be the same as MACD . It is as follows;

 

1. price oscillator bullish cryptocurrency market

 

Since price oscillator is also based on divergence,it therefore follows that when the price oscillator curve is trending upwards while the market is moving downwards,the market will experience a reversal and start moving in the same direction upwards as the price oscillator.This will signal the cryptocurrency trader to purchase a given amount of cryptocurrency with their USDT balance. The trader can either place a market buy order which will instantly be processed or they can place a limit buy order which will be processed when the market reaches a limit buy order price .This is indicated as from below;

The above is the TRX market against USDT. Two points are being indicated. There is point A and point B. Point A is the price oscillator line while point B is the divergence point. At point B, the market was moving downwards while the price oscillator is moving upwards. The market then reversed and start moving in the same direction upwards as the price oscillator thus signalling the trader to purchase a given amount of TRX with their USDT balance. The trader can place a market buy order or a limit buy order. The market buy order is executed immediately while the limit buy order is executed when the market reaches the limit buy order price. When the order is successfully processed, the account of the trader will start increasing in value if the market and PPO are moving upwards.

 

2. price oscillator bearish cryptocurrency market

 

Since price oscillator is also based on divergence,it therefore follows that when the price oscillator curve is trending downwards while the market is moving upwards,the market will experience a reversal and start moving in the same direction downwards as the price oscillator.This will signal the cryptocurrency trader to sell a given amount of cryptocurrency which he had previously purchased and is currently holding. The trader can either place a market sell order which will instantly be processed or he can place a limit sell order which will be processed when the market reaches his limit sell order price .This is indicated as from below;

The above is the TRX market against USDT. Two points are being indicated. There is point A and point B. Point A is the price oscillator line while point B is the divergence point. At point B, the market was moving upwards while the  price oscillator is in downward trend. The market then reverse and start moving in the same direction downwards as the price oscillator thus signalling the trader to sell a given amount of TRX which he had previously purchased and is currently holding. The trader can either place a market sell order which will be processed immediately or he can place a limit sell order which will be processed when the market reaches their limit sell order price. When the order is being processed, the account of the trader will have increased in value in terms of USDT.

 

cryptocurrency market is a highly volatile market. As a cryptocurrency trader,whenever you place a buy order,always make sure to apply risk management so that whenever your buy order goes against you, your account do not depreciate so much in value.

 

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