Crypto Fear and Greed Index are some of the crucial tools for traders to become successful, and they are a way of measuring the market sentiment. In recent years, crypto markets have been very volatile due to a plethora of reasons but one thing that everyone has in common is that they fear losing their investments while another group becomes greedy at every pump.
Various methods can be used to measure the market’s mood and this includes analyzing trading volume, social media posts, chat rooms among other things but what would it take to consolidate these data into an index telling you whether cryptocurrency markets are rising or falling? A Crypto Fear and Greed Index (CFG) is more than just a tool for price prediction; it is a tool that can tell when a trade will win or lose. The reason why CFG is important to a crypto trader is that it can help you decide on the entry point and exit point of a trade.
One key factor for a CFG for cryptocurrencies is trading volumes which reveals how much capital is entering or leaving the market during major price moves. The higher the trading volume is at any given moment, the more significant the price move will be at that time. For most traders and investors looking to get into crypto assets through thebitcoinsystem.io, one of the biggest obstacles they face for doing so are their emotions; there is a fear that may hinder any trader from making a good decision. But, does fear really have to be a major player in your decision-making process?
What CFG Means to the Crypto Market
Crypto Fear and Greed Index (CFG) from The Ultimate Trading Guides is one of the first crypto indexes launched by a regulated company that poses as an alternative to using TA or fundamental analysis when trading cryptocurrencies. It’s also the only CFG ever developed for cryptocurrency exchanges. This index will help you keep your emotions at bay and focus on price action alone, letting you decide whether you want to buy low or sell high.
Like other types of indicators such as Bollinger bands or RSI, CFG will provide data that can help you predict market movements within a certain time frame; however, unlike all the others mentioned above which rely on past prices, CFG will be using real-time prices to determine where the market currently is, and how it’s moving. With such information, you can make a sound decision.
When the algorithm is used as a sort of headless trading bot (or a ‘virtual crypto trader’), its performance is very good, producing an average return of 9.7% in the past six months. The reason behind such a high figure is CFG’s ability to change trends quickly – adapting to the new market condition in almost no time at all.
Another advantage of this index is that it doesn’t have any averaging out effect; instead, you will get immediate emotional cues. Last but not least, you don’t need to overtrade or be glued to your monitor all day long – if you decide to follow CFG, you’ll get simple instructions on what action should be taken next. Through its data analysis, traders can roughly predict the next price movement and, as a result, will be able to make better decisions about when to buy and sell their holdings. Over time, this should contribute to higher trading performance.
Crypto Fear & Greed Index might help you determine the best time to buy or sell your coins. It can tell you how scared or greedy people are feeling on any given day. This index is based on technical indicators such as volatility, momentum, volume percentage change, and money flow into and out of coins.
Andrea Bell is a blogger by choice. She loves to discover the world around her. She likes to share her discoveries, experiences and express herself through her blogs. You can find her on Twitter:@IM_AndreaBell