Blockchain and Cryptocurrency Advanced - The Median Indicator

The median indicator is one of the many technical indicators that fall under the category of trend-based. When it comes to technical analysis and trading, indicators play a very important role in not only predicting price direction but also making effective trading decisions. Trend is a very important term when it comes to predicting price direction in a particular time period.

The median indicator is basically a technical indicator that can be used for the measurement of volatility and price direction in the market. The median indicator makes use of a channel that forms based on how the ATR value moves away from the middle of the range value within a selected period. Also, the parallel bands that is gotten from the average true range ATR value shows the price volatility. On the Average True Range ATR of the median indicator, the ATR is plotted above the median line and below the median line which is used for determining volatility of the price. The way the median indicator works is that it shows the median value of the average between the highs and the lows within the specified length and the median is compared to the exponential moving average EMA of the same period length.

On the median indicator, there is a coloured cloud which is basically the space or the difference between the median and the exponential moving average EMA, which shows depending on which has higher values. The coloured cloud on the median indicator visually represents the direction of the market in terms of uptrend and downtrend. When the cloud shows a green colour, it is an indication that the market is bullish and the median value is higher compared to the exponential moving average EMA. Also, when the cloud shows a purple colour, it is an indication that the market is bearish and the median value is lower compared to the exponential moving average EMA.

_{Median Indicator added on the AAVE/USDT chart on tradingview}