Arnaud Legoux MA & Elder's Force Index
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In the crypto market, it is essential to recognize a market trend; however, it is evenly necessary to identify when the market trend ends. For crypto traders, closing out of a trade is more complicated than entering a trade position. In this blog, we will discuss two such technical indicators, the Arnaud Legoux MA & Elder's Force Index, which will help crypto traders make better trading decisions in trading markets like BTC & ETH.
Arnaud Legoux MA
The Arnaud Legoux MA is a trend following indicator. Arnaud Legoux and Dimitris Kouzis Loukas founded the trading tool. It was intended to separate small price variations to improve the direction of the asset by utilizing MA twice, meaning that one MA was from left to right. The second MA was from right to left. The reason for this was to assure that the change is constant and much more responsive. The Arnaud Legoux MA is contingent on support and resistance levels, as well as if the crypto asset is bullish and bearish.
Considering that the Arnaud Legoux MA is a trend following trading tool, if the value in the crypto asset is traveling downwards, the Arnaud Legoux MA will too be going downwards. When the crypto assets value drops below the lowest point of the Arnaud Legoux MA, the pair are in the downwards course; an upward reversal change will transpire. When this occurs, this will tell the crypto trader that there is a support point for this asset, indicating that the trader will purchase a given amount of that particular crypto asset.
When the crypto asset value is going upwards, the Arnaud Legoux MA will be climbing upwards. If the price increase for the crypto asset rises above the most crucial point of the Arnaud Legoux MA, then the two are in an upward course, and a descending reversal flow will transpire. When this occurs, this will tell the crypto trader that there is a resistance point for this asset, indicating that the trader will sell a given amount of that particular crypto asset.
Elder's Force Index
The Elder's Force Index is a volume-based oscillator indicator. It was founded by Alexander Elder to help traders identify the course of the market by estimating the strength of bull or bear trend based on price and volume. Since this is a volume-based indicator, the Elder's Force Index is dependent on center-line and change. Like other oscillator pointers, the Elder's Force Index has uncertainty at point zero. The Elder's Force Index is based on three essential components, direction, extent, and volume. Using these three factors, Alexander came up with below formula for Elder's Force Index:
EFI= (Today's price close - yesterday's price close)* today's volume
Based on the above factors and the center-line, when the EFI increases above zero, this will depict an upward course crypto market, therefore, indicating to crypto traders that they should be trading on the above market. On the contrary, when the EFI goes beneath zero, this will portray a downward course market; therefore, indicating to crypto traders that they should be trading downwards.
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