Trading indicators transform price or volume data into calculations that can help evaluate trend, momentum, volatility, or market conditions.
Moving Averages
Moving averages smooth price data and can help identify trend direction. Common settings include 20, 50, and 200 periods, although the appropriate setting depends on the market and timeframe.
RSI
The Relative Strength Index measures recent momentum. Traditional reference levels such as 30 and 70 are widely watched, but context matters.
MACD
MACD compares moving averages to help evaluate momentum and possible trend changes.
ATR
Average True Range measures volatility and can help traders understand typical price movement.
Using Indicators Wisely
Choose indicators because they answer a specific question. A simple chart with a clear purpose can be more useful than a crowded chart.