Technical indicators How to Use Technical Tools for Better Decision-Making Unlocking the Power of Trading

  1. Technical Analysis
    1. How Technical Analysis Can Help You Make Informed Decisions in Mastering Stock Trading
    2. Technical Analysis Setting Realistic Expectations
    3. Introduction to Technical Analysis and Assumptions
    4. Technical analysis for Profitable Trades Analyzing Open, High, Low, and Close
    5. Candlestick Charts How Line and Bar chart Enhance Market Analysis
    6. Japanese Candlesticks History, Anatomy From Ancient Japan to Global Trading Phenomenon
    7. Time Frames in Technical Analysis Unlocking the Power of Choosing the Right Interval for Successful Trading strategy
    8. Candlestick Patterns How to Identify and Interpret Trading Signals
    9. Marubozu and Bullish Marubozu Understanding What is Essential Single Candlestick Patterns for Traders
    10. Marubozu Candlestick Setting Stop Loss The Ultimate Guide to Trading Patterns
    11. Spinning Top Candlestick Navigating Downtrends A Trader’s Guide to Identifying Reversal Signals
    12. Spinning Top and Doji How to Interpret and Navigating Market Uncertainty
    13. Paper umbrella and hammer candlestick pattern Unlock Profitable Trades
    14. Hanging man candlestick pattern Profitable share market trading Strategies
    15. Shooting Star Candlestick Pattern Boost Your Trading Success Guide
    16. Engulfing Patterns and Bullish Engulfing Signals Unlock Trading Opportunities
    17. Bearish Engulfing and Doji for Trading Success Profitable Strategies with Candlestick Patterns
    18. Multiple Candlestick Patterns Insights and Strategies Boost Your Trading
    19. Bullish Harami Candlestick Pattern for Trend Reversal Strategies
    20. Shorting Guide using the Bearish Harami Pattern Trade Reversals with Confidence
    21. Morning Star Candlestick Pattern and Gap Analysis To Maximise Your Profits
    22. Evening Star Candlestick Pattern Learn How to Identify and Trade to Boost Your Trading Success
    23. Support and Resistance Basics A Comprehensive Guide to Setting Targets and Navigate the Markets with Confidence
    24. Support and Resistance Learn How to Draw and Identify Key Levels Unlocking Trading Opportunities
    25. Support and Resistance Advanced Trading Strategy Analysing Reliability and Optimisation
    26. Volume Trends How to Leverage for Successful Trading Strategy
    27. Volume Analysis A Key Checklist for Successful Stock Trading
    28. Moving Averages A Comprehensive Guide for Trend Analysis in Stock Trading
    29. How to Use Moving Averages for Profitable Trading Strategy and Potential Opportunities
    30. Moving Average Crossover Boost Your Trading Success with A Reliable Strategy
    31. Technical indicators How to Use Technical Tools for Better Decision-Making Unlocking the Power of Trading
    32. Relative Strength Index RSI Analysing Overbought and Oversold Signals to Boost Your Trading Strategy
    33. MACD How to Interpret and Utilize Moving Average Convergence and Divergence for Profitable Trading
    34. Bollinger Bands The Power of Indicators in Trading and checklist
    35. Fibonacci Retracements Unravelling the Power in Stock Markets
    36. Mastering Fibonacci Retracement A Step-by-Step Guide for Effective Trading
    37. Dow Theory Decoding Unveiling the Principles of Technical Analysis
    38. Dow Theory Patterns Unlocking Trading Opportunities with Double and Triple Formations
    39. Trading Range Explained chart indicator example strategy Profit from Market Ranges
    40. Flag Pattern and Range Breakout How to Capitalise Trading Beyond Boundaries
    41. Risk reward ratio Understanding RRR in Dow Theory
    42. Technical Analysis Tools for Traders Charting Software Guide Enhance Your Trading
    43. How to Select Stocks for Trading Success and Building Your Opportunity Universe
    44. Short Term Trading Unleashing the Power of Scalping Strategies
    45. ADX Indicator and 7 more indicator tools for Trend Strength Analysis
Marketopedia / Technical Analysis / Technical indicators How to Use Technical Tools for Better Decision-Making Unlocking the Power of Trading

When you look at a stock chart on a trader’s trading terminal, you’ll likely see multiple lines running across it. These are known as Technical Indicators – they enable traders to study and assess the price movements of a security.

Indicators are trading systems created by successful traders that can aid a trader’s technical study (candlesticks, volumes, S&R) in reaching a conclusion. They provide assistance with buying and selling, verifying patterns, and at times forecasting trends.

Indicators are divided into leading and lagging, the former usually indicating a reversal or new trend before it takes place. However, caution must be exercised as not all leading indicators provide correct predictions. Alertness is key when using these indicators, as they can often give inaccurate signals; trading experience increasingly helps evaluate their accuracy.

The majority of main indicators are generally classified as oscillators due to their tendency to fluctuate within a certain range. Generally, these oscillations will occur between two extremes – for instance, ranging from 0 to 100. By considering the oscillator’s value (e.g. 55, 70 etc.), an appropriate trading approach can be determined.

Conversely, lagging indicators are slow to react to changes in the market because they indicate when a reversal or trend has already happened. While that can appear worthless at first, it’s still better than not getting a signal at all. Moving averages are one of the most used lagging indicators by traders.

You may wonder why we discussed moving averages before delving into indicators further. This is because it stands on its own as a core concept and is applied in many indicators, for example, RSI, MACD and Stochastic. We thus addressed it separately from the other indicators.

In order to get a better grip on individual indicators, let us first comprehend what momentum is. To explain it simply, this is the speed at which the cost alters. 

For instance, if the stock is Rs.100 now and it shifts to Rs.105 the next day and Rs.115 after that, we can deduce that the momentum is strong since the rate of change was 15% in only three days. But if that same 15% variation had occurred over 3 months or so, the momentum would have been much lower. Consequently, a quicker rate of change implies greater momentum.


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