You can simplify your trading by using several different indicators. These indicators will give you a look at the market at the moment you plan to take a trade. No matter the timeframe these indicators can be used. Although the information in front you could be lagging, it will still give you more of an idea of where the instrument may go in the future.
Let’s look at several different indicators
The first indicator we’d like to discuss our moving averages. These the most common indicators used on charts for traders across the world. These moving averages will give you a price area where volume has come in at certain times. They will also give you support and resistance areas based on the movement of the instrument. These indicators are one of the highly used methods of trading no matter if it’s intraday or daily. We like to use more than two of these moving averages on our chart to give us an area of entries and exits.
You can use something like the VWAP, which is an indicator that gives you information about volume average price. It describes what is happening around the area when price has been in that location. This indicator is becoming widely used by many of the institutions and algorithmic trading mechanisms across the world. If you plan to use the VWAP be sure to understand it in its entirety.
The most commonly used indicator is volume. You can determine to enter a trade based on volume. If you are watching a particular instrument that isn’t really moving, but has minimal volume this could tell you that when the volume picks up that you should enter the trade. When you have an instrument with very high volume you need to be careful of things like rug pulls and manipulation of the instrument. Volume can give you so much information on the most highly traded mechanisms in the markets right now.
If you decide to watch things like stochastics MacD and RSI, you will find yourself up against a big wall. There are a lot of people that use these indicators, but don’t fully understand how they work. Depending on the market conditions we are in, these indicators can be a great tool, but you need to be aware of what is happening in the overall market.
Trading based on news is a great way to get in and out of the trade with fast execution. As soon as a news event is announced, you can enter the trade or decide to wait for certain pullback before you enter. This will give you an opportunity to get on a big trade just before the magic happens.
No matter which method you plan to trade in the future, make sure you understand the indicators you plan to use. There are many different methods of trading of course, but indicators are one of the things you need to be aware of when looking at charts. There’s going to be a lot of information coming to you in the future so please be aware of this and come back shortly.