Basic Technical Indicators

These are some indicators you may begin learning to become a profitable trader. I highly suggest that when you see these indicators, try them out yourself and adjust the settings with the one that you prefer most.

Indicators allow people to solve problem and make judgement quickly and efficiently. Mathematical calculations is based on the price, volume, and speed.

Moving Averages

It is basically the average of each closing price in a given period such as 7 days, 14 days, or so. Moving Averages is a trend indicator that can be used to identify the trends, reversals, and as dynamic support and resistance.

Relative Strength Index

It is a momentum indicator that measures the price change magnitude to determine an oversold and overbought market. Divergence and Converge strategy can also be applied here as a signal if a trend is about to reverse.

Moving Average Convergence Divergence (MACD)

It is also a momentum indicator that is good to trade trends. It consists of the slower and faster moving averages, and the difference between the two moving average is called Histogram.

Stochastic Oscillator (STS)

It is also a momentum indicator that shows the relationship of the closing price relative to the high-low range over a set number of periods. It consists of the fast oscillating %K and the slow oscillating %D.

An example of this is on the oversold level, when the %K crosses over the %D, it may signal a reversal of the trend.

Directional Movement Index (DMI)

It is an indicator that can identify the direction of the price (or trend). It consists of the positive and the negative directional movement (+DI and -DI) and the third line is the average directional index line (ADX). When the +DI and -DI are above ADX, it signals an strong uptrend and the crossovers can be your buy signals.

This is the end of our basic technical analysis. I highly suggest that you do your own research and read more videos about your preferred indicator and master them or create your own system when to buy or sell and close position. By knowing these things, you can protect your capital from losses and become profitable because you followed your own system. We will be posting advance technical indicators soon. Thank you for dropping by!


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