📊 Effective Technical Analysis Indicators to Help You Make Better Trading Decisions:
First: Moving Averages (MA)
🔸️Goal: To identify market trends and determine potential support and resistance levels.
Popular Settings:
🔹️Short-Term Moving Average: 50 days
🔹️Long-Term Moving Average: 200 days
How to Use:
🔹️Buy Signal: When the 50-day moving average crosses above the 200-day moving average from below, known as the "Golden Cross" — typically considered the start of a bullish trend.
🔹️Sell Signal: When the 50-day moving average falls below the 200-day moving average, referred to as the "Death Cross", which may indicate the beginning of a bearish trend.
🔸️Practical Example:
If the market experiences a Golden Cross, this could be a positive buy signal.
Second: Relative Strength Index (RSI)
🔸️Goal: To determine whether an asset has been overbought or oversold.
🔹️Typical Setting: 14-day period
🔸️How to Use:
🔹️Buy Signal: When the RSI drops below 30 (oversold area) and then rises back above it.
🔹️Sell Signal: When the RSI rises above 70 (overbought area) and then falls below this level.
🔸️Practical Example:
If the RSI reaches 25 and then rises to 35, it may be seen as a good opportunity to enter a buy trade.