It is a mathematical calculation based on Price, Volume and open interest of a security or contract used by traders who follow technical analysis.
By analyzing historical data, technical analysts use indicators to predict future price movements.
fundamental analysts, who attempt to evaluate a security’s intrinsic value based on financial or economic data, technical analysts focus on patterns of price movements, trading signals and various other analytical charting tools to evaluate a security’s strength or weakness.Technical indicators are commonly used by active traders, since they’re designed to analyze short-term price movements, but long-term investors may also use technical indicators to identify entry and exit points.
Moving Average:
A moving average is simply a way to smooth out price action over time. By “moving average”, Like every indicator, a moving average indicator is used to help us forecast future prices. By looking at the slope of the moving average, you can better determine the potential direction of market prices.
Plot couple of moving averages on their charts instead of just one. This gives them a clearer signal of whether the pair is trending up or down depending on the order of the moving averages.
n an uptrend, the “faster” moving average should be above the “slower” moving average and for a downtrend, vice versa.
RSI:
RSI, identifies overbought and oversold conditions in the market. It is also scaled from 0 to 100.
RSI is a very popular tool because it can also be used to confirm trend formations.
Fibonacci Series:
Fibonacci Retracements, Fibonacci Arcs and Fibonacci Fans,in all 3 applications, the golden ratio is expressed in 3 percentages, 38.2%, 50% and 61.8%.
Fibonacci retracements are areas on a chart that indicate areas of support and resistance. For Fibonacci Retracement, they are horizontal lines, for Fibonacci Arcs, they are curved lines and and for Fibonacci Fans, they are diagonal lines.
