Here are the top 5 technical indicators every trader must understand:
1️⃣ Relative Strength Index RSI:
Measures momentum and ranges between 0 and 100:
Above 70 = overbought (possible drop)
Below 30 = oversold (retracement opportunity)
Around 50 = neutral
Tip: Combine it with support/resistance for more accurate results.
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2️⃣ Crossover and divergence of moving averages MACD:
Shows trend and momentum:
Bullish crossover = buy signal 📈
Bearish crossover = sell signal 📉
Positive bars = upcoming momentum 📊
🛑 Tip: Use it on larger timeframes like 4H and daily.
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3️⃣ Volume:
It's the "fuel" behind every movement:
High volume = strong movement.
Weak volume = false signals
🚨 Tip: Monitor volume averages (MA5 and MA10) to confirm the trend.
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4️⃣ Exponential Moving Average EMA:
Reacts quickly to price:
EMA9/21 = for short trend
EMA50/200 = strong support and resistance
🚨 Tip: Buy at EMA in an uptrend, and sell at it in a downtrend.
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5️⃣ Risk/Reward Ratio:
The basis of any successful trade:
1:2 or more = good trade
Less = ignore it
🚨 Tip: Do not enter a trade without a stop plan and clear targets.
⚠️ Reminder:
Do not rely on just one indicator.
The best trades come from combining multiple smart signals!
