Here is the revised text with the addition of an example based on TRX:
Hello! In the previous article, I talked about the first step in choosing coins for spot trading — analyzing the market trend on the daily chart. Today, we will move on to the second step: assessing trading volumes.
Step 2: Estimating trading volume (VOL)
Trading volumes reflect the number of coins bought or sold over a given period of time. They help to understand the strength and stability of a trend.
• Increasing Volume: If volume increases during an uptrend, it confirms the strength of the trend. To me, this is a signal that the market is supporting the uptrend and you can consider entering a position.
• Reduced Volume: If volume is falling while the price is rising, it could indicate a weakness in the trend. In this case, I would hold off on entering as a reversal is possible.
Example:$TRX / USDT
Let's look at the $TRX /USDT chart. The price started to rise after a period of decline, forming higher lows and highs. This indicates an uptrend (step 1).
This trend is confirmed by the increasing trading volumes at the bottom of the chart. They show that the market is actively supporting the price increase. In such a situation, I would consider entering a position, given that both steps of the analysis (trend and volumes) confirm the strength of the movement.
How do I use this indicator?
After identifying a trend on the daily chart, I analyze trading volume to confirm or refute the strength of the trend. This helps me make an informed decision about entering the market.
Further development of the strategy
For better results, you need to consider more indicators such as RSI, MACD, and support and resistance levels. In the next article, I will talk about using the RSI indicator to assess whether the market is overbought or oversold based on my current study of the basics of crypto trading.
I hope my experience and example with $TRX will be useful to you!
