Indicators are tools with the predefined analysis and set of algorithms, this can be applied on the trend to get the indication of price movement. It can be used as supporting tool to confirm the analysis derived from the technical analysis. But the indicators does not work in all scenarios, some of them work for trending and some of them indicate well in non trending zone.
When the RSI is applied on the non trending zone, it provides the index with the mark of 70 and 30 scale. … When the index moves below 30, it indicates the aggressive selling pressure and when it crosses 30 again and moves above, it indicates the bullish trend and the long position can be created to buy.
Moving average is one of the most commonly used technical indicator by traders to analyse the trend of the market. Moving average is calculated by taking the average of past closing data prices. For example, 20 day moving average calculates the average price for last 20 days
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In response to your question
Fibonacci retracement – The Fibonacci sequence is one of the most famous formulas in mathematics. Each number in the sequence is the sum of the two numbers that precede it. So, the sequence goes: 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, and so on. Traders believe the Fibonacci series has its application in stock charts as it identified potential retracement levels. Fibonacci retracements are levels (61.8%, 38.2%, and 23.6%) up to which a stock can possibly retrace before it resumes the original directional move.
Golden Mean is 1.618 Logic behind the golden mean is the ratio of two consecutive numbers in the Fibonacci series is the same for all the two consecutive numbers.
Example 1: 21/13=1.618 Example 2: 144/89=1.618
How to use it while trading stocks
First, find the recent significant Swing Highs and Swings Lows. For downtrends, click on the Swing High and drag the cursor to the most recent Swing Low. While for uptrends, do the opposite. Click on the Swing Low and drag the cursor to the most recent Swing High. When you applying the tool, the software shows you the retracement levels automatically.