TRADING TERMINOLOGIES

 SIMPLE CRYPTOCURRENCY TRADING TERMINOLOGIES

• Cross vs. Isolated Margins

• Relative Index Strength(RIS)

• Bollinger Band(BB)

*Cross Vs Isolated Margin*

Which should you use?

No direct answer here but I will give you (esp. the newbies) this simple explanation to help you decide.

✅Isolated --- Dear ByBit, I have $200 in my wallet. I am giving you $50 for this particular trade. If it goes south and hits my liquidation price, please don't touch the remaining $150. Allow me to mourn my $50 loss in peace.🤣 

✅ Cross --- Dear ByBit, I have $200 in my wallet. I am giving you $50 for this trade but should it go south and hit my liquidation price, kindly take more funds from the remaining $150 to keep the trade going until it reverses and makes me profit.

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The strategy behind the BB/RSI strategy is the RSI and the Bollinger Band.

The Relative Strength Index is a powerful tool in forex.

We basically use it to know the strength index of a coin. The level of buyers and sellers trading the coin.

The Bollinger band shows us the placement of the coin on the band. 

The Bollinger Band is divided into 3:-

1. The upper band

2. The mean

3. The lower band

The buyers and sellers are technically called the Bulls and Bears in the market.

The Bulls are the buyers (long position)

The Bears are the sellers (short position).

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So, the RSI tells us the likely number of bulls (buyers) or bears (sellers) in the market. 

There are zones on the RSI.

We have the buy zone and the sell zone, and we also have the overbought zone and the oversold zone .

Now, our concerns are the overbought and the oversold zones. Zones where buyers are no longer buying the coin and levels where sellers are no longer selling the coin. 

On the RSI, 

Overbought zone starts from 70 and above.

Oversold zone starts from 30 and below.

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On these zones, buyers start selling the coin, thereby causing the coin price to decrease or fall. And as well, sellers stop selling and start buying the coin, thereby causing the price of the coin to increase or rise.

On these zones, you will see the price breaking out of the Bollinger Band upper band or lower band.

NMR 

1. It hit the upper band

2. It hits the upper band and falls to the mean band.

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UNFI

1. It hit the upper band

2. May likely hit the mean band

The point I marked "1" is the upper and

The point I marked "2" is the mean band.

You should guess the Lower band by now???

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GALA

1. It hit the lower band

2. May likely head towards the mean band

The point I marked "3" is the lower.

The point I marked "2" is the mean band.

When watching the RSI, you also need to keep the placement of the bollinger band in mind. This tells you when to enter and exit a trade.

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_Now, we will be focusing on  the overbought levels._

Let's talk TA now...

The higher the coin is in the overbought zone, the more buyers are likely to start selling the coins, and then the Bulls turn to Bears or technically the Bulls enter the Bears zone and the Bears defeat the Bulls and the Bears take over the market or retain their territory.

In these zone sometimes u might see an easy defeat of the Bulls causing the price to fall instantly or u might see a struggle between the Bulls n the Bears, 97% of the time, the bears wins and retain their territory.  The result is the price fall.

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In layman terms, the buyers start selling or, let's say, they turn to sellers at this overbought zone to retain profit, causing the price to fall massively.

Anytime you notice a coin attaining a new ATH (All Time High) or an ATH around that time, the next thing we expect is a massive dump. Bulls in Bears territory and Bears retaining their territory as usual.

We explore these zones using our RSI tools and our Bollinger band.

That's all.

The End..