Book Image

Zero to Hero in Cryptocurrency Trading

By : Bogdan Vaida
Book Image

Zero to Hero in Cryptocurrency Trading

By: Bogdan Vaida

Overview of this book

In today's fast-paced digital age, cryptocurrencies have emerged as a revolutionary financial asset class, capturing the attention of investors and traders worldwide. However, navigating the world of cryptocurrency trading can be overwhelming for beginners. Zero to Hero in Cryptocurrency Trading acts as a guiding light to navigate this complex realm. This comprehensive guide to cryptocurrency trading empowers you to go from a novice trader to a proficient investor by helping you implement your own trading strategy. As you progress, you’ll gain structured trading knowledge through hands-on examples and real-time scenarios, bolstered by trading psychology and money management techniques. You’ll be able to automate your manual trades with an algorithm that works even while you sleep. You’ll also benefit from interactive teaching methods, including screenshots, charts, and drawings to help decode market operations and craft your unique edge in the dynamic crypto world. As an added bonus, you’ll receive ready-to-use templates to identify useful indicators, test your strategy, and even maintain a trading journal. By the end of this book, you’ll be well-equipped to trade cryptocurrencies and automate manual trading to give you an edge in the markets.
Table of Contents (13 chapters)
9
Chapter 9: What’s Next?

Volatility - average true range

The average true range (ATR) is another indicator developed by J. Welles Wilder Jr. in New Concepts in Technical Trading Systems.

The indicator is useful in estimating how volatile the market is. I mainly use it to set proper stop losses so that the volatility doesn’t take my stop loss before my trade gains traction.

Now, how about that formula?

ATR formula

ATR = (PrevATR * (n – 1) + TR) / n

Here’s what it means:

  • PrevATR: The ATR of the previous period.
  • n: The period of time over which the ATR is calculated. Typically, this is set to 14 periods.
  • TR: The true range for the current period. It’s the greatest of the following values:
    • The current high (H) minus the current low (L)
    • The absolute value of the current H minus the previous close (C)
    • The absolute value of the current L minus the previous C

Here are the three methods for calculating TR:

Figure 4.6 – The three ways to calculate true range

Figure 4.6 –...