Assalamualaikum Steemian |
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With the prayers of my well-wishers I'm doing great and so do I wish for you all, beautiful people. Today, I'll write on the topic "Technical indicators" organized by @khursheedanwar Here is my view about the concerned topic.
What importance technical indicators have for making market analysis? |
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Technical Indicators play important role in analyzing the market. It shows the future road and move of the market. There are indicators which tell us about the trends of the market, monument and even enhancing and improving our risk management by giving as the region of take profit and stop loss. The below region is rich of the three strong technical indicators and is worth reading.
Write about any three technical indicators in brief way |
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The three best technical indicators are:
EMA tells us about the trends. It gives the buy and sell signal.
Setting EMA
First we should search the EMA in the indicator bar and select it three times. The 3 Lines will be shown on the chart. Select the 1st line and change it's length from the setting to 21 and select its color as blue(or of your choice). Keep the length and color of the 2nd and 3rd line as 55 and 200 and yellow and red respectively.
Indication/Function
The 55 EMA acts as a resistance, 200 EMA as a major resistance. If the major resistance is broken and retested, it indicates an uptrend.
The 21 EMA acts as a support. If the price crosses the 21 EMA, it indicates a down trend.
4EMA is a trend indicator that shows whether the market is bullish or bearish. It gives an entry and sell signals. It acts as a resistance and support.
Settings up 4EMA
Search the 4EMA from the indicator bar and select the 4EMA indicator. Go to setting and in input bar, edit the length of each line as 8,12,21 and 55. After that go to the style bar and select the color of you choice. I choose Blue, green, yellow and red respectively.
Indication/Function
When the lines i.e 8,12,21,55 or blue, green, yellow and red is in sequence, it indicates an entry zone.
When these lines consolidate with each other and when the 55 or red line is on the top of the price and other lines, it indicates a strong sell zone.
RSI is a momentum oscillator indicator. It ranges from 0-100.
Indication/Function
The 70 and above is an overbought region, we should avoiding buying in that region and should sell. The 30 and below is an oversold region, we should avoid selling as it's buy zone.
RSI Divergence
There are four types of RSI divergence.
1. Bullish Divergence
When the price is making a lower low and the indicator is making a higher low, it's called the bullish divergence and it indicates an upward rally.
2. Hidden Bullish Divergence
Hidden bullish divergence is opposite of bullish divergence, i.e., When the price is making a higher low and the indicator is making a lower low, it also indicates an upward rally.
3. Bearish Divergence
A mountain like structure. When the price is making higher high and indicator is making lower high, it indicates a bearish sign and price can be dropped from there.
4. Hidden Bearish Divergence
When the price js making lower high and indicator is making higher high, the price can be dropped from there.
From my personal experience, there isn't any accurate indicator that we should solely depend on. We use these indicators for confluence and we should keep the price action and market structure while analyzing the market.
In the end, I want to say that many people will be agree with me while few may not, this is what the difference of opinion is and that is what leads the world forward.
Source
Thanks for being here!
inviting @beemengine , @ripon0630 ,and @beemengine to take part in the contest.
Regards,
@jalil654