In the trading world, a set of tools and indicators are used to identify entry and exit points, evaluate the strength of trends, and manage risks. Here are some of the most prominent tools:
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🔹 Volume Indicators
Measure the amount of trading and help determine the strength of trends:
Money Flow Index (MFI): Combines volume and price to determine the flow of money in and out of the market.
Accumulation/Distribution Line: Shows whether there is ongoing buying or selling pressure.
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🔹 Oscillators
Used to identify overbought or oversold conditions:
Relative Strength Index (RSI): Measures the speed and change of price movements to identify saturation areas.
MACD: Shows the relationship between two moving averages to determine trends and momentum.
Stochastic Indicator: Compares the closing price to the price range over a specified time period.
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🔹 Standard Deviation Indicators
Used to measure market volatility and identify support and resistance levels:
Bollinger Bands: Show price ranges and are used to identify saturation levels.
Keltner Channels: Used to determine price ranges based on moving averages.