In this article, I will explain the “Basic Trading Indicators”
1. MACD
2. RSI
3. Bollinger Bands
4. MOTHER
5. VWAP
6. Volume
1. MACD
MACD measures the convergence and divergence of two moving averages of an asset's price over time.
MACD indicates the separation of values between two moving averages with different calculation periods.
When the MACD line crosses the signal line from bottom to top, the trend will be bullish.
When the MACD line crosses the signal line from top to bottom, the trend will be bearish.
2. RSI
RSI is an oscillator that reflects the relative strength between uptrends and downtrends.
RSI indicator is around 30: reflects oversold levels
RSI indicator is around 70: reflects overbought levels
To draw an uptrend line on the indicator, you need to connect two or three or more peaks of the RSI indicator as when the HH point appears.
On the other hand, a descending line is drawn by connecting three or more peaks, which are points that are descending.
3. Bollinger Bands
Bollinger Bands are one of the most widely used trading indicators. They are used to compare the price value of any asset and the changes in its relative value over a period of time.
"Crushing" occurs when the bands taper upward to the point where they appear to merge or coincide.
If the price moves close to the upper band, it will indicate a bullish breakout.
If the price converges with the lower band, it will indicate a bearish breakout.
4. MOTHER
The exponential moving average is a weighted moving average that is used to measure bullish and bearish trends.
EMAs are used in trading to determine whether the price is going up or down. EMAs can also be used as support and resistance.
5. VWAP
Volume-weighted average price is a technical analysis tool that shows the ratio of an asset's price to its total trading volume.
It provides traders and investors with a measure of the average price at which a stock is trading over a given period of time.
6. Volume
Trading volume is an indicator of market activity and liquidity over a certain period of time.
Higher volumes are considered more favorable because higher volumes mean better liquidity and better order execution.
