#MarketPullback
These are the top 5 indicators for better trading:
1. RSI (Relative Strength Index)
- Measures momentum, speed, and strength of price movement.
- Ranges from 0 to 100.
- Above 70 = Overbought, below 30 = Oversold.
2. MACD (Moving Average Convergence Divergence)
- Shows the strength and direction of the trend.
- Consists of the MACD line, the signal line, and the histogram.
- MACD crossover above the signal line = Bullish, MACD crossover below the signal line = Bearish.
3. Volume
- Shows the amount of trading.
- High volume = Strong breakout or breakdown, low volume = Potential failure or "trap".
4. EMA (Exponential Moving Average)
- Follows the average price and gives more weight to recent prices.
- EMA9 and EMA21 = Short-term trend, EMA50 and EMA200 = Major support and resistance.
5. Risk/Reward Ratio
- Determines how much you risk versus how much you earn.
- 1:2 or more = Excellent, always plan stop-loss and targets before entering.
Professional Tips
- Combine RSI with support/resistance levels to catch strong reversals.
- Use MACD on the 4-hour or daily timeframe to avoid false signals.
- Compare MA5 and MA10 volume to confirm breakouts.
- Buy near EMA in an uptrend, and sell at EMA in a downtrend.
- Ignore trades with poor risk-to-reward ratios.
Important Reminder
- No indicator works alone 100% of the time.
- Combining multiple signals gives the best trades.
