Trading Indicators
Comprehensive guide to 30+ trading indicators. Master technical analysis with detailed explanations, formulas, and practical usage examples.
Simple Moving Average (SMA)
trendThe SMA calculates the average price over a specific number of periods. It smooths out price data to identify the direction of the trend.
Exponential Moving Average (EMA)
trendEMA gives more weight to recent prices, making it more responsive to new information than SMA.
MACD (Moving Average Convergence Divergence)
trendMACD shows the relationship between two moving averages. Consists of MACD line, signal line, and histogram.
Average Directional Index (ADX)
trendADX measures trend strength regardless of direction. Values range from 0-100, with higher values indicating stronger trends.
Parabolic SAR
trendParabolic SAR (Stop and Reverse) provides entry and exit points. Dots appear above or below price indicating trend direction.
Ichimoku Cloud
trendComprehensive indicator showing support/resistance, trend direction, and momentum using five lines and a cloud.
Supertrend
trendTrend-following indicator that uses ATR to plot dynamic support and resistance levels.
Donchian Channels
trendShows highest high and lowest low over a specified period, creating upper and lower bands.
Relative Strength Index (RSI)
momentumRSI measures the speed and magnitude of price changes. Oscillates between 0-100, identifying overbought and oversold conditions.
Stochastic Oscillator
momentumCompares closing price to price range over a period. Consists of %K (fast) and %D (slow) lines.
Commodity Channel Index (CCI)
momentumMeasures deviation of price from its statistical average. Oscillates above and below zero.
Williams %R
momentumMomentum indicator that measures overbought/oversold levels. Inverted scale from 0 to -100.
Momentum Indicator
momentumSimple indicator that measures rate of price change over a specified period.
Rate of Change (ROC)
momentumMeasures percentage change in price over a specified period. Similar to Momentum but in percentage terms.
Ultimate Oscillator
momentumCombines three different timeframes to reduce false signals and provide more reliable momentum readings.
Bollinger Bands
volatilityConsists of a middle band (SMA) and upper/lower bands set at standard deviations from the middle.
Average True Range (ATR)
volatilityMeasures market volatility by calculating the average range between high and low prices.
Keltner Channels
volatilitySimilar to Bollinger Bands but uses ATR instead of standard deviation for band calculation.
Standard Deviation
volatilityStatistical measure of price dispersion from the mean. Higher values indicate higher volatility.
Chaikin Volatility
volatilityMeasures rate of change of the trading range (high-low spread) over time.
On-Balance Volume (OBV)
volumeCumulative indicator that adds volume on up days and subtracts on down days. Shows buying/selling pressure.
Volume Profile
volumeShows volume distribution at different price levels over a specified time period.
Volume Weighted Average Price (VWAP)
volumeAverage price weighted by volume. Shows the true average price based on both price and volume.
Money Flow Index (MFI)
volumeVolume-weighted RSI. Measures buying and selling pressure using both price and volume.
Accumulation/Distribution Line
volumeMeasures cumulative flow of money into and out of a security based on price location and volume.
Fibonacci Retracements
advancedHorizontal lines at key Fibonacci ratios (23.6%, 38.2%, 50%, 61.8%, 78.6%) identifying potential support/resistance.
Elliott Wave Theory
advancedMarket moves in repetitive patterns of 5 waves in trend direction and 3 waves in correction.
Pivot Points
advancedCalculated support and resistance levels based on previous period's high, low, and close.
Gann Indicators
advancedBased on W.D. Gann's theories using geometric angles and time cycles to predict price movements.
Market Profile
advancedOrganizes price and time data to show where market spent most time, revealing value areas and market structure.
š Indicator Best Practices
ā Do
- ⢠Combine 2-3 indicators from different categories
- ⢠Use indicators to confirm price action, not replace it
- ⢠Adjust indicator settings to match your timeframe
- ⢠Backtest indicator combinations before live trading
- ⢠Understand what each indicator measures
ā Don't
- ⢠Use too many indicators (causes analysis paralysis)
- ⢠Rely on indicators alone without price action
- ⢠Use redundant indicators (e.g., RSI + Stochastic)
- ⢠Ignore market context and fundamentals
- ⢠Over-optimize indicators to fit historical data
šÆ Recommended Indicator Combinations
Trend Following
- ⢠EMA (20, 50, 200)
- ⢠MACD
- ⢠ADX
Range Trading
- ⢠Bollinger Bands
- ⢠RSI
- ⢠Stochastic
Breakout Trading
- ⢠Bollinger Bands
- ⢠ATR
- ⢠Volume Profile
Educational Disclaimer
This content is for educational purposes only and does not constitute financial or investment advice. Trading involves significant risk and you may lose your capital. Always consult a licensed financial advisor before making investment decisions.