April 23, 2021

The Top 5 Technical Indicators for Profitable Trading

How do traders keep detecting the price movement and predicting what will happen to the asset in the next minute? Is there a magic formula for investing or certain patterns of price behavior? Nice guess, but no. In fact, everything is  way more simple than it looks. Traders have assistants that do not let them down in their time of need. Let’s talk about them in greater detail.

The Ichimoku Indicator

It is named after the pseudonym of its inventor, Goichi Hosoda. The Japanese analyst became famous for working on an indicator of his own invention for several decades. As a result, this tool has gained international recognition and is currently integrated into all trading terminals by default.

Why do you need it? It measures the price movement, shows the support and resistance levels and the trend direction. That is why it is often called an all-in-one indicator.

At first glance, the tool looks complicated. But if you look more closely, it can become a worthy assistant to the trader.

Relative Strength Index - RSI

Without spare bashfulness we shall notice that this is one of the most popular indicators. The widespread use is due to the simplicity of its interpretation.

Why do you need it? It helps to analyze the strength or weakness of the current market state.

It echoed from every trader around the globe: both professional players and novice stock speculators.

People who correctly use the indicator get the opportunity to conduct a detailed analysis of the trend of virtual coins and build reliable forecasts of price changes based on it.

Moving Averages

The tool has gained popularity due to the ease of constructing, calculating, and interpreting the results.

It helps to determine the direction of the price movement (or market) and is simply indispensable when trading on a trend.

Short intervals have little effect on this indicator. It relies on longer ones. By looking at the chart showing the MA, you can determine the areas where the price has ever changed its direction.

Fibonacci Levels

If you think that the Fibo lines are something incomprehensible, think again. We are here to change your mind - you'll find it'll play out quite easily.

Despite the fact that the horizontal lines do not represent complex and interdependent calculations, they are still included in the list of indicators for the trader. The secret of success lies in their usefulness.

When the price changes dramatically, this tool helps you track its movement and draw certain conclusions about its behavior. Most users believe in the Fibonacci levels, which resemble certain levels of self-fulfilling prophecy.

Sales Volume

Perhaps one of the most valuable and at the same time undervalued indicators in the world of crypto. It shows how many people are buying or selling assets.

Before making a decision based on any other indicator, be sure to check your sales volume. If there is a significant price movement in a certain direction, then there must be a momentum, behind which an impressive number of players stands.

Final Words

Technical indicators are one of the most discussed topics in trading. The ability to work with the main tools largely determines the success in trading. But there are also those who do not share the enthusiasm. Technical analysis is a brilliant invention for some, and random statistical sampling for others. Which side you want to end up on?

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