Market Trading Indicators
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- Moving Averages: Moving averages smooth out price data to identify trends over a specified time period. Common types include simple moving averages (SMA) and exponential moving averages (EMA). Estimated success rate: 60-70%.
- Relative Strength Index (RSI): RSI measures the magnitude of recent price changes to evaluate overbought or oversold conditions in a security. It ranges from 0 to 100, with readings above 70 indicating overbought conditions and readings below 30 indicating oversold conditions. Estimated success rate: 55-65%.
- Moving Average Convergence Divergence (MACD): MACD is a trend-following momentum indicator that shows the relationship between two moving averages of a security's price. It consists of a MACD line, signal line, and histogram. Estimated success rate: 50-60%.
- Bollinger Bands: Bollinger Bands consist of a middle band (SMA) and two outer bands that represent standard deviations of the underlying asset's price. They help identify volatility and potential reversal points. Estimated success rate: 55-65%.
- Volume: Volume measures the number of shares or contracts traded in a security or market during a given period. It can indicate the strength of a trend or signal potential reversals.
- Fibonacci Retracement Levels: Fibonacci retracement levels are horizontal lines that indicate where support and resistance are likely to occur based on key Fibonacci ratios. Traders use them to identify potential reversal levels. Estimated success rate: 50-60%.
- Stochastic Oscillator: The stochastic oscillator compares a security's closing price to its price range over a specified period. It helps identify potential reversal points by indicating overbought or oversold conditions.
- Average True Range (ATR): ATR measures market volatility by calculating the average range between high and low prices over a specific period. Traders use it to set stop-loss orders and determine position size.