How do indicators work on Trading views?
Let me simplify this for you.
Indicators in Trading view are tools that make it easier to analyze trends or price movements. They’re essentially mathematical formulas that work on price and volume data. Here are two basic indicator examples:
1. Moving Average (SMA - Simple Moving Average):
This is one of the simplest indicators. Its formula is:
SMA = (Sum of prices over a specific period) / Number of periods
For example, if you’re tracking a 10-day moving average and looking at sugar stocks in Pakistan (e.g., JDW or Al-Abbas), the SMA will calculate the average of the last 10 days’ prices. If the price is above the SMA, it’s bullish; if it’s below, it might be bearish.
This idea originated around 1901 by Charles Dow. The formula was validated through backtesting on years of historical data.
2. RSI (Relative Strength Index):
This momentum oscillator tells you if the market is overbought or oversold. The formula is:
RSI = 100 - [100 / (1 + Average Gain / Average Loss)]
For example, if you’re analyzing and $BNB the RSI is above 80, it’s overbought; below 30 means oversold. This indicator was introduced in 1978 by J. Welles Wilder, an engineer turned trader. It was validated using historical stock data.
Where Does TradingView Get Its Data?
TradingView gets its data in real-time from stock exchanges (e.g., NYSX) and brokers. This data includes:
• Prices (Open, High, Low, Close)
• Volume
• Bid-Ask spreads
TradingView fetches this data through APIs directly connected to the exchanges. If an exchange’s API or internet fails, TradingView might lag or stop updating.
What Are Dark Pools, and Why Isn’t Their Data on TradingView?
Dark pools are private trading venues where large institutions (e.g., banks or mutual funds) execute big trades without affecting public markets. Their data isn’t on TradingView because they operate with confidentiality.
To spot dark pool impacts indirectly on TradingView, you can use volume analysis or indicators like OBV (On Balance Volume). For example, if the price remains flat but volume increases significantly, it may signal unseen large trades happening in the background.
Let me know if you need clarification on any of these!
