TRADERVIDZ LEARN TO TRADE
How to trade with indicators
Indicators are and should always be used in conjunction with real price movement and in our opinion, should never be used in isolation to take a trade. They can help you determine if the momentum of the market is with you or if its starting to slow down. Divergence (in its various forms) is a key indication of this but it can be misleading in a strong trend. Consequently, using an amalgam of indicators such as volume or OBV could assist more effectively.
A common trait amongst all types of trader is to exit trades too early, due to misreading (or misinterpreting); for example, using indicator which signal overbought or oversold status. In this instance, such dynamics are part and parcel of a trend; indicators can be at extremes for a long time with focus on the price action itself. Trading with indicators should be quantitative in nature and back testing is vital.
In this sections we will cover everything from MACD to RSI
How to trade with RSI
The Relative Strength Index (RSI), was developed by J. Welles Wilder, is a momentum oscillator that measures the speed and change of price movements. The RSI oscillates between zero and 100. Traditionally the RSI is considered overbought when above 70 and oversold when below 30. But is that the only way to use it..... NO!!!!
How to trade with MACD
MACD, short for moving average convergence/divergence, is a trading indicator used in technical analysis of stock prices, created by Gerald Appel in the late 1970s. It is supposed to reveal changes in the strength, direction, momentum, and duration of a trend in a assets price
How to trade with moving averages
How to trade overbought and oversold areas
In the video below Richard Adcock MSTA discusses how to identify overbought and oversold levels (http://www.adcockanalysis.com)