Indicators that are often used by traders

As far as I know, the most widely used indicator by traders is the moving average, because this indicator can detect trends that occur easily and simply. And the second is the bollinger band, which is the same as the moving average, this bolling band indicator is also used to detect trends that occur. But when we want to choose which indicator we will use, we should use our comfort as a parameter, don't just follow other people

The use of Technical Indicators like complementary foods for the main course, is often ruled out by traders because for them it is confusing because in the end it gives false signals. Well, most of this is probably caused by an inability to use indicators that traders often use.

Signals from Trading Indicators

In fact, this error can occur because Trader A uses X indicator exclusively (without the help of other indicators), for example when the indicator raises signals for buy or sell positions, it is actually saturated market conditions (overbought or oversold) so that the trend corrects against trader predictions A earlier.

Up to this point, you might ask, "If only one indicator is not enough, then you have to use indicators?"

Here are some popular indicators that are often used by traders and you deserve to learn, with the hope that these indicators can sharpen your analysis of market trends:

 

1. Moving Averages
You could say Moving Averages are "first love" for beginner traders, so impressive and hard to forget. Simplicity in its use is the main reason why this indicator is a favorite choice.

Just use a few MA lines (Moving Average), where one long period MA (100, 200) will be a benchmark for traders to read when an uptrend or downtrend occurs.

Moving Averages

 

For example, when an uptrend occurs, add a few MA lines with a short period (10, 20), watch the position of the MA with a short period, if the position begins to intersect with the long period MA, be prepared for long positions.

Moving Averages

 

2. MACD (Moving Averages Convergence Divergence):
The derivatives of Moving Averages generally use two EMA (exponential moving averages) with 12 (fast length) and 26 (slow length) periods. Two EMA lines are calculated by reducing EMA with period 26 from EMA in period 12. In addition, EMA with period 9 is added to reinforce buy or sell signals.

The buy signal in MACD is usually captured when fast length cuts the slow length and moves upwards, while the sell signal when fast length cuts the slow length and moves down.

MACD indicator

 

3. RSI (Relative Strength Index)
The RSI indicator is used to determine overbought or oversold conditions when a trend is happening. The RSI scale starts from 0 to 100, where when the line touches scale 70 and above it can be concluded that the market conditions are overbought. Conversely, when the line touches the scale 30 and below, the market is oversold.

RSI indicator

Let's say the market is in an uptrend, where the line will be around range 70 and above for a sustained time. At that time, if the line moves down to range 50 then returns to crawl up, get ready for a Buy position. Why wait until range 50? Because during an uptrend, the line will drop below 30 only when the market experiences a reversal.

 

4. OBV (On Balance Volume)
Market transaction volume is based on the assumption that ideally volume confirms market trends. An increase in market prices will be followed by an increase in On Balance Volume (OBV), while a decrease in market prices will be followed by a decrease in OBV.

Of course market conditions are not always ideal, so if the OBV line crawls up but market prices are still stagnant, there is a high chance that market prices will follow OBV.

Likewise when prices rise but OBV shows a decline or stagnation, it could be that market prices have approached the peak.

OBV indicator

Once you start learning to use the indicators above, you will realize the importance of using more than one type of indicator to read the market situation. For example, when you use an MA, then the MA will provide a trading signal that is usually rather late because the MA is indeed a lagging indicator. That is where other indicators such as RSI are needed to determine whether when you are in an open position, the market is saturated or not.

The use of Technical Indicators like complementary foods for the main course, is often ruled out by traders because for them it is confusing because in the end it gives false signals. Well, most of this is probably caused by an inability to use indicators that traders often use.

Signals from Trading Indicators

In fact, this error can occur because Trader A uses X indicator exclusively (without the help of other indicators), for example when the indicator raises signals for buy or sell positions, it is actually saturated market conditions (overbought or oversold) so that the trend corrects against trader predictions A earlier.

Up to this point, you might ask, "If only one indicator is not enough, then you have to use indicators?"

Here are some popular indicators that are often used by traders and you deserve to learn, with the hope that these indicators can sharpen your analysis of market trends:

 

1. Moving Averages
You could say Moving Averages are "first love" for beginner traders, so impressive and hard to forget. Simplicity in its use is the main reason why this indicator is a favorite choice.

Just use a few MA lines (Moving Average), where one long period MA (100, 200) will be a benchmark for traders to read when an uptrend or downtrend occurs.

Moving Averages

 

For example, when an uptrend occurs, add a few MA lines with a short period (10, 20), watch the position of the MA with a short period, if the position begins to intersect with the long period MA, be prepared for long positions.

Moving Averages

 

2. MACD (Moving Averages Convergence Divergence):
The derivatives of Moving Averages generally use two EMA (exponential moving averages) with 12 (fast length) and 26 (slow length) periods. Two EMA lines are calculated by reducing EMA with period 26 from EMA in period 12. In addition, EMA with period 9 is added to reinforce buy or sell signals.

The buy signal in MACD is usually captured when fast length cuts the slow length and moves upwards, while the sell signal when fast length cuts the slow length and moves down.

MACD indicator

 

3. RSI (Relative Strength Index)
The RSI indicator is used to determine overbought or oversold conditions when a trend is happening. The RSI scale starts from 0 to 100, where when the line touches scale 70 and above it can be concluded that the market conditions are overbought. Conversely, when the line touches the scale 30 and below, the market is oversold.

RSI indicator

Let's say the market is in an uptrend, where the line will be around range 70 and above for a sustained time. At that time, if the line moves down to range 50 then returns to crawl up, get ready for a Buy position. Why wait until range 50? Because during an uptrend, the line will drop below 30 only when the market experiences a reversal.

 

4. OBV (On Balance Volume)
Market transaction volume is based on the assumption that ideally volume confirms market trends. An increase in market prices will be followed by an increase in On Balance Volume (OBV), while a decrease in market prices will be followed by a decrease in OBV.

Of course market conditions are not always ideal, so if the OBV line crawls up but market prices are still stagnant, there is a high chance that market prices will follow OBV.

Likewise when prices rise but OBV shows a decline or stagnation, it could be that market prices have approached the peak.

OBV indicator

Once you start learning to use the indicators above, you will realize the importance of using more than one type of indicator to read the market situation. For example, when you use an MA, then the MA will provide a trading signal that is usually rather late because the MA is indeed a lagging indicator. That is where other indicators such as RSI are needed to determine whether when you are in an open position, the market is saturated or not.