Hello, traders!
We have already know many diffirent indicator, but sometimes we can face with the situation when a combination of different indicators demonstrates bad trading performance. Usually the reason of this confusion is that investors use indicators of the same type. We should analyze the market situation in different ways.
The indicators can be divided by five groups.
TREND INDICATORS
This indicators helps to define the trend direction (uptrend, downtrend, sideways). This is very important part of the analysis because the uptrend is the most applicable for long, downtrend - for short, sideways - for range trading. Examples: EMA, Parabolic SAR, Alligator.
OSCILLATORS
This type is used for the trend confirmation, overbought/oversold conditions defining, to find the trend weakness (divergences). Examples: RSI, Stochastic, %R Williams.
VOLATILITY
There are can be periods of low-volatility and high-volatility on the market. The low-volatile periods are great for the long-term trading, while high-volatile periods are applicable for intraday and scalping in pullback or range trading. Examples: Bollinger Bands, ATR.
VOLUME
This indicators demonstrate moments when the volume increases or decreases. It is widely known that the big price moves are usually associated with significant volume traded. Examples: Money Flow Index, On-balance Volume.
CENTRAL PIVOT RANGE
This is a separate indicator's type because all indicators we discussed above are lagging, it means that it reacts to price action and usually produce the signal too late. The CPR indicator is the leading and is used for the potential price levels. We have already considered it on this channel on TradingView.
COMBINATIONS
We should combine indicators from different groups to increase trading performance. For medium and long-term trading it is great to use trend indicators with volume (EMA + On-Balance Volume) or with oscillators (EMA + RSI). For intraday trading the volatility and oscillators combination is applicable (Bollinger Bands + Stochastic RSI). The CPR indicator could be added to almost every combinations, because it is the leading indicator.
Now you can use this article to construct your own trading strategy. Next time we will consider a simple strategy based on these principles
DISCLAMER: Information is provided only for educational purposes. Do your own study before taking any actions or decisions.
We have already know many diffirent indicator, but sometimes we can face with the situation when a combination of different indicators demonstrates bad trading performance. Usually the reason of this confusion is that investors use indicators of the same type. We should analyze the market situation in different ways.
The indicators can be divided by five groups.
TREND INDICATORS
This indicators helps to define the trend direction (uptrend, downtrend, sideways). This is very important part of the analysis because the uptrend is the most applicable for long, downtrend - for short, sideways - for range trading. Examples: EMA, Parabolic SAR, Alligator.
OSCILLATORS
This type is used for the trend confirmation, overbought/oversold conditions defining, to find the trend weakness (divergences). Examples: RSI, Stochastic, %R Williams.
VOLATILITY
There are can be periods of low-volatility and high-volatility on the market. The low-volatile periods are great for the long-term trading, while high-volatile periods are applicable for intraday and scalping in pullback or range trading. Examples: Bollinger Bands, ATR.
VOLUME
This indicators demonstrate moments when the volume increases or decreases. It is widely known that the big price moves are usually associated with significant volume traded. Examples: Money Flow Index, On-balance Volume.
CENTRAL PIVOT RANGE
This is a separate indicator's type because all indicators we discussed above are lagging, it means that it reacts to price action and usually produce the signal too late. The CPR indicator is the leading and is used for the potential price levels. We have already considered it on this channel on TradingView.
COMBINATIONS
We should combine indicators from different groups to increase trading performance. For medium and long-term trading it is great to use trend indicators with volume (EMA + On-Balance Volume) or with oscillators (EMA + RSI). For intraday trading the volatility and oscillators combination is applicable (Bollinger Bands + Stochastic RSI). The CPR indicator could be added to almost every combinations, because it is the leading indicator.
Now you can use this article to construct your own trading strategy. Next time we will consider a simple strategy based on these principles
DISCLAMER: Information is provided only for educational purposes. Do your own study before taking any actions or decisions.
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