Using Technical Analysis Indicators
Technical analysis is a method of examining past market data to help forecast future price movements. Using different tools, indicators, and charts, traders can spot important price patterns and market trends, and then use that data to anticipate a market’s future performance.
Technical analysis is based around a market’s price history, rather than the fundamental data like earnings, dividends, news, and events. The belief is that price action tends to repeat itself and the patterns can be identified and used to define a market’s trend.
Since MarketClub offers a variety of chart studies that can be helpful in your technical analysis, I’d like to highlight several of the most popular technical indicators and how you can use them.
The Moving Average Convergence/Divergence (MACD) Indicator
This trend-following, momentum indicator shows the relationship between two moving averages. Learn how to identify Signal Line Crossovers, Centerline Crossovers, and positive and negative divergences to spot changes in trend direction, strength and momentum of a market. Learn more about the MACD.
These lagging indicators help gauge the direction of the current trend of a market. Discover how to track and identify trends, find potential support and resistance levels, and recognize possible changes in momentum. Learn more about moving averages.
One of the simplest technical indicators, Trend Lines are important for identifying and confirming trend direction. They can help predict levels of support and resistance and single out important chart movements and significant price points. Learn more about trend lines.
Relative Strength Index (RSI)
The RSI is a momentum oscillator that measures the strength and speed of a market’s price movement by comparing current price to past performance. This indicator can be used to find overbought and oversold areas, support and resistance levels, and potential entry and exit signals. Learn more about the RSI.
Fibonacci retracements can help traders identify significant price points and predict levels of support and resistance. Learn how this tool can be used to determine how much a market might retrace before resuming its trend. Learn more about Fibonacci retracements.