How we choose our best Technical Indicators:-

Dear friends, if you are puzzled with these type of questions like "What are the best technical indicator for trading?" "How to use technical indicators to take Entry?" "How to set parameter of indicators for trading?" "How many indicators are required to trade?" "Which indicators are used by professional traders?" etc. then this article must be helpful for you. Because in this article I am going to show you some of the best and most used technical indicators by traders. As well as I will try my best to answer the above questions step by step so that you can know the truth behind all these questions. Join our WhatsApp Group for free & share your view and suggestion.

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In this article you will find "Top 10" indicators which I use in my trading are listed below: -

    1. Exponential Moving Average (EMA)
    2. ADX
    3. Bollinger Bands
    4. On Balance Volume (OBV) / Volume Chart
    5. Convergence and divergence of moving averages (MACD)
    6. Index of relative strength (RSI)
    7. Stochastic
    8. Parabolic SAR
    9. Fibonacci Retracement
    10. VWAP
    11. Join our WhatsApp Group for free & share your view and suggestion.

You don't have to use them all, instead, pick a few that you think would help you to trade. Now we are going to study all of the above indicators in detail. Learn Trading1=5 System

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#1 Example of Exponential Moving Average (EMA) and MACD:-

Dear friends, I am sharing the below image with two indicators which are "Widely Use" by all traders in my view. If you can read and interpret their signal in your setup you would be ahead of the game. Join our WhatsApp Group for free & share your view and suggestion.

EMA-and-macd

"Trend in stock market" or "how to find Trend in stock market?" Now we can answer this question with the help of these two indicators as these two are used to find the trend, hence these are called "Trend Following Indicator". 

Below some of the important points are mentioned which must be keep in mind always. 

Watch this Video:-
 

#2 Example of ADX, CHANNEL AND PARABOLIC SAR (PSAR):-

Now I am sharing top three indicators which are used for finding the trend, profit target and stop loss. ADX is used for finding the Trend, Channel is used for Profit Target, PSAR is used for Stop Loss. Look at the below image where these three indicators are shown. Join our WhatsApp Group for free & share your view and suggestion.

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The points which we need to be remember for using the above three indicators are discussed below: -

  • ADX measure the strength of the up trend while +DI is above the -DI.
  • It also measure the strength of down trend while -DI is above the +DI.
  • Channel top is used for target during an up trend.
  • Channel bottom is used for target during a down trend.
  • PSAR is used as Stop Loss when placed below price bar during Up Trend while Buy Low sell High technique used.
  • PSAR also used as Stop Loss when place above price bar during Down Trend while short selling technique used.
These above points are the basic points of ADX, CHANNEL AND PSAR. If you need more details, feel free to ask in the comment section below this article. I shall try my best to answer your question. Join our WhatsApp Group for free & share your view and suggestion.

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#3 Example of EMA and Stochastic Indicators:-

Here I am sharing two indicators EMA and STOCHASTIC as you see in the below image. As the usage of EMA is discussed earlier on point 'number 1', we will discussed about Stochastic only. Join our WhatsApp Group for free & share your view and suggestion.

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Stochastic is an oscillator and it is used for entry technique. When we are trading with an Up Trend, Stochastic helps to take entry when it is in the Oversold zone. If you watch the image carefully, you will find when EMA shows an uptrend and Stochastic shows oversold, price start to rise again and when EMA shows a down trend and Stochastic shows Overbought, price start to fall again. So we can use this setup and take the opportunity in our trading. Join our WhatsApp Group for free & share your view and suggestion.

As I discussed basic points of indicators, you may ask for the details in the comment section below.

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 #4 Example of EMA AND RSI:-

Here I am also sharing two indicators EMA and RSI as you see in the below image. As the usage of EMA is discussed earlier on point 'number 1', we will discussed about RSI only. Join our WhatsApp Group for free & share your view and suggestion.

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RSI is an oscillator like Stochastic and it is used for entry technique also. When we are trading with an Up Trend, RSI like wise Stochastic helps to take entry when it is in the Oversold zone. If you watch the image carefully, you will find when EMA shows an uptrend and RSI shows oversold, price start to rise again and when EMA shows a down trend and RSI shows Overbought, price start to fall again. So we can use this setup and take the opportunity in our trading. We can also confirm the signal of RSI with STOCHASTIC.

As I discussed basic points of indicators, you may ask for the details in the comment section below.


Watch this video:-  


#5 Example of EMA AND OBV:-

Now I am sharing two indicators EMA and OBV as you see in the below image. As the usage of EMA is discussed earlier on point 'number 1', we will discussed about OBV only. Join our WhatsApp Group for free & share your view and suggestion.

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OBV or On Balance Volume is an indicator which measure the volume against price movement. Volume is the most common factor to be used in technical analysis. The main points are as below: -

  • When OBV moves in the same direction with price, it ensure us that the respective trend is safe.


These Videos would help you to choose your best Indicators:- How to use Bollinger Bands? :- Video on MACD, one of the most favourite indicators among professional:-