Trade & make money using traditional indicators

1. Trade & make money usingtraditional indicators The traders who understand the technical analysis better are better off in day trading. This is because they are usually familiar with the charts and make their way throughcandlesticks. The trading strategy that the trader uses might depend on the trading styles and how much riskthe trader is willing to take. Understanding the technical and traditional indicators can help thetraders understand how the markets move in a betterway. The technical indicators can tell them the best entry and exit points, and the traders can approach the charts every day in a bettersense. There are at least a hundred technical indicators that exist. Each can tell a good entry and exit position to the traders, depending on how much the indicator effectively decodes the market that day.

2. Traditional indicators for stocktrading: For the traders who are looking for the most effective ways to technical indicators, they must figureout For traders looking for the most effective ways to make money using traditional indicators, it is essential to consider the objectives of the trading strategy and the current marketcondition. For individuals trading individual stocks, it is often beneficial to apply traditional indicators tothe stock index in which that share belongs to get a holistic view of the larger market as a whole. Below given are the six most essential and popular technical indicators that traders can use to analyzestocks. Trader/ClientSentiment: The traders can use trader sentiment or client sentiment to determine their positions across a wide range of assets. Many traders go long and short depending on where the sentiment is shifting and whether the overall sentiment of the market is bullish orbearish. Thesentimentsmayimprovethetechnicalanalysispartandcanhelpthetraderstotrademore consistently.Thisisspecificallymoreimportantforthepeoplewhoaretradingagainst thegeneral market. The data that decides the client sentiment is derived from the execution desk data of a brokerage firm. Thebrokersareinnovative;theystudythetrades madebythe retailclientstodetermineifthereis a possible bias in the market. When the sentiment trends approach the extremes, the traders can see areversal. Many brokers in their platforms show the volume of trades and the kind of positions the traders have held in terms of being long or short. The novices can take their cues from here aswell. Although it is not advised to trade on client sentiment as a single deciding factor of the trade, pleasemakesureyouaremoretechnicalintermsofotherwaystomakemoneyusingtraditional indicators . We will learn about them further in thisarticle.

3. SIMPLE MOVING AVERAGE(SMA) This is a lagging indicator that represents the price of an asset for a specific period. When the market is trending, the moving average smooths out the noise visible in the charts and lets the traders identify an ongoing trend in the most simpleway. These are the most common ways to make money using technical indicators the traders need to know of and to look for in a trend. If the SMA is up, the trend is up; if it is down, so is the trend. To look for patterns is the kong tenure. A 200 bar SMA is a good idea. The short term SMAs can be used to determine the short term trends. They smooth out the price data and are good for technical indicators. The smoothness of the result is dependent on the length of theSMA. ThepricecrossingSMAisgenerallyusedtotriggerthetradingsignals.Whenthepricesgobeyond the SMA, the traders go long to hedge their short positions. When they fall below the SMA, they might want to go short rather than goinglong. EMA, like, and SMA is a lagging indicator. The EMA represents the average price of an asset for a specificperiod. SMA is a traditional indicator gives equal weightage to all data points in the series, and the EMA puts more focus on the recent price levels. In return, this removes the lag found in the traditional SMA. This makes the EMA a good option for trend trading since it can give them a holistic view of the market without missing out on any opportunity because of the lag ofSMA. RSI( Relative StrengthIndex): RSI is a momentum oscillator that calculates the measure of the price movements to understandif themarketisoversoldoroverbought.IftheRSIisbelow30,itisconsideredoverbought,andwhen it is above 70, it is called overbought. Some specific key levels may indicate a reversal, putting RSI in the class of leadingindicators. TherecanbeinstanceswhentheRSItradesbetween30&70forsometimebeforeitfallstothe30 levels. Going below that, the first signal is usually a false one because it looks like there will be a trend change, but the prices are stillfalling. However, the second signal is correct when the RSI that was previously below 30 turns upside. However, the RSI confirms the reversals by crossing above the level of 30 the nextday. MACD:

4. MACD or the moving average convergence divergence is a good technical indicator that can measure the momentum and strength of a trend. The MACD shows a Histogram, a signal line and a MACD line. All are colour coded into differentcolours. • The MACD traditional indicator is the difference between the two moving averages moving exponentially, while the signal line is an exponential average of the 9-period MACD line. These lines move in and out of the zero lines. This gives the MACD the oscillator’s characteristics with oversold and overbought signals hovering around the zerolines. • There are a few things that have to be learnt with the MACD. • There is a bullish signal when the MACD crosses above the signal line from below the zerolines. • The bearish signal can be confirmed when the MACD line crosses below the signal line and above the zero lines. • STOCHASTIC • Thisisamomentumindicatorthatbelongstothetraditionalindicatorslistisusedtodeterminethe oversold and overbought conditions while trading stocks. The RSI measures the speed of theprice movements,thestochasticmeasures,therelationshipofthecurrentpriceandthepricerangeithas had over a specificperiod. • The black line represents the %K, and it is calculated using the lowest and the highest high over sometime,andthe%DrepresentstheSMAofthe%K.Thereisabullishcrossoverwhenthe%K line crosses over the %D line. Similarly, the bearish trendoccurs when the %K line crossesbelow • %D. The strongest signals will mostly occur when the bullish cross-coupled move above 20 from below will move below 80. • This phenomenon can be cross-checked with index charts like Jow Jones and S&P500.

5. Aroon oscillator: This is a technical indicator that is used to measure whether an asset is in trend or not. More specifically, whether the price is hitting new highs or lows for calculation, which is generally 25, the Aroon oscillator can also be used to identify if a new trend is about to begin. The Aroon indicatorismadeoftwolines:anAroonupandanAroondowntheline.Iftheuplinehits100and staysthere,whentheAroondownstaysnearZero,thatcanbeapossibleindicationofanuptrend. Thereverseofthissituationisalsotrue.IftheAroondowncrossestheAroonup,thenadowntrend can be in thepicture. Continue Reading…………………..