In the previous post, I explained the indicators and their explanations in the stock market. This is a follow up post. #RSI #fibonachi #BOLLlNGER
5. Moving Averages Moving averages show the average of prices over a certain period of time. There are two main types: Simple Moving Average (SMA) and Exponential Moving Average (EMA). Moving averages are used to determine trend direction and analyze support and resistance levels.
6. Stochastic Oscillator The stochastic oscillator measures the position of an asset's closing price relative to its price range within a certain time period. It takes values ââbetween 0 and 100. Generally, above 80 is considered overbought and below 20 is considered oversold. This oscillator is used to predict trend reversals.
7. ATR (Average True Range) ATR measures the volatility in the price of an asset. It is calculated by averaging the âtrue rangesâ over a certain period of time. ATR helps understand the magnitude of price fluctuations and how volatile the market is.
8. ADX (Average Directional Index) ADX is used to measure the strength of a trend, but it does not determine its direction. It takes values ââbetween 0 and 100. Generally, values ââbelow 20 are considered a weak trend, and values ââabove 40 are considered a strong trend. ADX is used in trend-based strategies to evaluate whether the trend will continue or not.
These indicators are used to develop various strategies and make more informed investment decisions when analyzing the stock market. Each provides different information to understand specific market conditions and are often used together to provide more comprehensive analysis
