Technical Indicators that Every Trader Should Know
Technical indicators are Mathematical Patterns that extracted from historical data those are displayed graphically and compared to the corresponding price chart for analysis. Usually Technical Indicators are used by the Technical traders and Investors to forecast future Price Trends and make trading decisions. Several different types of technical indicators that can be used when trading in the stock market
Technical Indicators are mainly divided into :
- Momentum Indicators
- Trend Indicators
- Volume Indicators
- Volatility Indicators
- Breadth Indicators
Momentum Indicators - Momentum indicators help the traders to understand the speed at which the price of certain stocks changes along with Momentum indicators help us understand the strength of price movements. The Popular Momentum Indicators are as follows : -
- Moving Average Convergence Divergence
- Relative Strength Index
- Relative Strength
- Average Directional Index
- Rate of Change
Trend Indicators - Trend Indicators help traders analyze whether the trends will continue or reverse. The Popular Trend Indicators are as follows : -
- Moving Averages
- Supertrend
- Parabolic SAR
Volume Indicators - Volume Indicators gives us early signals when the price movement will continue or reverse. The Popular Volume Indicators are as follows : -
- On-Balance indicator
- Money flow index
- Trader’s Lion Enhanced Volume
- Volume Price Trend Indicator
- Volume at Price and Volume-Weighted Average Price
Volatility Indicators - Volatility Indicators help traders to trade more effectively and gauge Volatility in the market. The Popular Volatility Indicators are as follows : -
-Bollinger Bands
-Keltner Channel
-Donchian Channel
Breadth Indicators- Breadth Indicators reflects the participants in the market The number of stocks participating in a rally can be calculated using breadth. The number of active investors in the market can also be deduced from breadth. The Popular Volatility Indicators are as follows : -
- Periodic High and Lows
- Number of Stocks above Moving Average
- Advance/Decline