Thread by @BuzzingstockH

Thread 🧵on #Indicators used in #TechnicalAnalysis.

Must read for those who wish to learn #TechnicalAnalysis.

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#Technicalindicators are mathematical calculations or pattern-based signals produced by the price, volume, and/or open interest of a security or contract used by traders who follow #TechnicalAnalysis.

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Technical Indicators are divided in 4 broad types -

1. Trend Indicators
2. Momentum Indicators
3. Volatility Indicators
4. Volume Indicators

#TechnicalAnalysis #Technicalindicators

3/n

#Trend Indicators measure direction & strength of trend, using some form of price averaging to establish a baseline. Bullish signal when price moves above average, bearish signal when price moves below average.

Popular Trend Indicators - Moving Averages, MACD, Parabolic SAR

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#MovingAverage (MA) - Used to identify current trend and trend reversal, as well as identify support and resistance levels.

Types - SMA (Simple) & EMA (Exponential)

#TechnicalAnalysis #Technicalindicators

5/n

#MACD - Used to reveal changes in strength, direction, momentum & duration of a trend in price of any asset.

It shows relationship between two moving averages of a security’s price.

It has two lines - MACD Line and Signal Line.

#TechnicalAnalysis #Technicalindicators

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Parabolic SAR - Used to find potential reversal in the direction of market price.

It is also used to find entry and exit signals.

#TechnicalAnalysis #Technicalindicators

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#Momentum Indicators measures speed with which price changes over time. It appears as line below price chart that oscillates as momentum changes. When there is divergence between price and momentum indicator it signals a change in future price direction.

#TechnicalAnalysis

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Popular Momentum Indicators - #Stochastic Oscillator, #RSI

#TechnicalAnalysis #Technicalindicators

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#Stochastic Oscillator - Used to predict price turning points by comparing the closing price to its price range.

It is used to generate #overbought and #oversold trading signals, based on value obtained which ranges from 0 to 100.

#TechnicalAnalysis

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#RSI - Used to measure any asset's recent trading strength, velocity of a change in the trend and magnitude of the move.

It is used to generate overbought and oversold signals, based on value obtained which ranges from 0 to 100.

#TechnicalAnalysis #Technicalindicators

11/n

Volatility Indicators measure rate of price movement, regardless of direction. It is based on a change in highest & lowest historical prices. Used to determine points where the market may change direction.

Popular Volatility Indicator - #BollingerBands

#TechnicalAnalysis

12/n

#BollingerBands - Used to measure 'highness' or 'lowness' of the price, relative to previous trades.

It is defined by a set of trendlines plotted two standard deviations (positively & negatively) away from a simple moving average of a security's price.

#TechnicalAnalysis

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#Volume Indicators measure strength of a trend or confirm a trading based on some form of averaging or smoothing of volume.

Popular Volume Indicators - #OBV

#TechnicalAnalysis

14/n

#OBV - Used to measure level of accumulation or distribution by comparing volume to price movement.

OBV shows crowd sentiment that can predict a bullish or bearish outcome.

#TechnicalAnalysis

Beginners can read this book to learn #TechnicalAnalysis

📗 Guide to Technical Analysis & Candlesticks by Ravi Patel

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