Timely stock market indicators

I am often asked which stock market indicators are best or which ones do I use. No doubt opinions on a formula for success vary greatly on this subject. Perhaps one reason is that the field of technical analysis offers so many stock indicators to choose from. Are some really better than others? Are some downright misleading?

Key Stock Market Indicators Include Price, Volume, and Moving Average Lines

Well they can be depending on how they are used and just as important, what other stock indicators they are used with. For example, take a look at the stock chart below of MWY. It uses a couple of very popular indicators, RSI and Stochastic. Do you know why using these two particular indicators together though could provide you with misleading results?

It's really quite simple. Say for example, there is a car accident.

No one is hurt. A policeman arrives though and wants to determine who is at fault. There are several witnesses present who saw the accident but were not involved in it. Which do you think the policeman would find more reliable, taking two statements from the same witness or taking one statement from two different witnesses?

stock market indicators

Well you say, "why on earth would he want to take two statements from the same witness, of course he would find statements from two different witnesses more reliable". The same is true of trading.

In our example above, by using the RSI and Stochastic indicators we are basically inquiring of the same source twice to check the validity of our trade. Because both indicators work basically the same way. Here is the basic formula for each. Both indicators measure the velocity of the directional movement of the price by timely stock market indicators either the closing price, high or low during a given period. So while, both stock broker salary in sri lanka these indicators are great momentum oscillators, it would not do us much good to use both of them.

A more reliable approach would be to collect information from at least two different sources, beginners guide to stock market trading our policeman did.

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So if we decided to use one of the above momentum oscillators, we would want to add another type of indicator that provides additional insight to our analysis.

Here is just some of what we have available. Typically these indicators are leading indicators, that is they pretend stock market for kids give insight into where the price may go in the future.

Volatility Indicators such as Bollinger Bandsor Chalkin Volatility are useful for timing. The one constant regarding stock prices, is that they are not constant.

So using a volatility indicator and noting a relative low volatility for example, it can be presumed that the volatility will increase, resulting in a trend, or at least a breakout. Other types of indicators can be used to determine the direction of the price movement.

So no matter which stock market indicators you might like, you would be doing yourself a favor to use a combination of the group above rather than multiple indicators from the same group.

Doing this will provide you with a more reliable and complete picture of the current and future price movement resulting in a better chance of making your stock trading successful. KNOWLEDGE IS POWER Learn more now.

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3 Stock Market Indicators for Growth Investors - Cabot Wealth Network

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