How to Choose a Bitcoin Moving Average to Trade With

Moving Average Leading Cryptocurrency Indicators

A bitcoin trader can choose a moving average based on the crypto chart time frame that he is trading; the bitcoin trader might choose to use this Moving Average indicator on the minute cryptocurrency charts, hourly cryptocurrency charts, daily crypto charts or even weekly cryptocurrency charts.

The bitcoin trader can also choose to average the closing bitcoin price, opening btcusd price or median bitcoin price.

Moving average btcusd technical indicator is a commonly used indicator to measure strength of bitcoin trends. The data is precise and its output as a moving line can be customized to a bitcoin trader's preferences.

Using the bitcoin trading moving average is one of the basic ways to generate crypto buy and sell trading signals which are used to trade in the direction of the bitcoin trend, since the Moving Average indicator is a lagging indicator and a bitcoin trend following indicator - this means that it will tend to give late crypto entry signals as opposed to leading cryptocurrency trading indicators. However, as a lagging cryptocurrency indicator it gives more accurate cryptocurrency signals and is less prone to whipsaws compared to leading cryptocurrency trading indicators.

Bitcoin Traders choose the moving average period to use depending on the type of bitcoin trading they do: short term bitcoin trading, medium term cryptocurrency trading and long term cryptocurrency trading.

• Short-term bitcoin trading: 10 - 50 Moving Average Period
• Medium-term bitcoin trading: 50 - 100 Moving Average Period
• Long-term bitcoin trading: 100 - 200 Moving Average Period

The btcusd price period in this case can be measured in minute cryptocurrency charts, hourly cryptocurrency charts, daily crypto charts or even weekly cryptocurrency charts. For our example we will use 1 hour crypto chart time frame period.

Short term bitcoin trading moving averages are sensitive to btcusd price action and can spot bitcoin trends signals faster than the long term moving averages. Shorter term bitcoin trading moving averages are also more prone to whipsaws compared to long term moving averages and a bitcoin trader should choose a bitcoin price period that will generate a cryptocurrency signal early but not give too many bitcoin trading whipsaws.

Long term bitcoin trading moving averages help avoid bitcoin trading whipsaws, but are slower in spotting new bitcoin trends and bitcoin trend reversals.

Because long term moving averages calculate the average using more btcusd price data, it does not reverse as fast as a short term bitcoin trading moving average and it is slow to catch the changes in the cryptocurrency trend. However, the longer term bitcoin trading moving average is better when the bitcoin trend stays in force for a longer time but may also give late cryptocurrency signals.

The work of a bitcoin trader is to find a moving average period that will identify bitcoin trends as early as possible while at the same time avoiding fake-out signals (bitcoin trading whipsaws).