Arnaud Legoux MA & Elder’s Force Index

by | Nov 15, 2020

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. This blog 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 asset’s direction 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 ensure that the change is constant and much more responsive. The Arnaud Legoux MA is contingent on support and resistance levels and if the crypto asset is bullish and bearish.

Considering that the Arnaud Legoux MA is a trend-following trading tool, if the crypto asset’s value is traveling downwards, the Arnaud Legoux MA will be going downwards. When the crypto assets value drops below the Arnaud Legoux MA’s lowest point, 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

Arnaud Legoux MA & Elder's Force Index
Arnaud Legoux MA & Elder Force Index Indicator on HyperTrader

The Elder’s Force Index is a volume-based oscillator indicator. Alexander Elder founded it to help traders identify the market’s course by estimating the strength of bull or bear trends based on price and volume. Since this is a volume-based indicator, the Elder’s Force Index is dependent on centerline 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 the 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 centerline, when the EFI increases above zero, this will depict an upward course crypto market, 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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Written By Karamvir Singh

Karamvir is a co-founder at HyperLinq and the Chief Product Officer. He is an experienced trader. He loves spending time with his family and his dog.
Disclaimer

Posts on the HyperTrader blog and associated HyperLinq websites are for educational and informational purposes only. These posts should not be taken as financial advice, nor are they meant to be viewed as trading advice. HyperLinq Inc. takes no responsibility for any damages or losses.

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