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4 Amazing Indicators used by the Experienced Traders

2019-08-02 21:18:59 | Admin
4 Amazing Indicators used by the Experienced Traders  | 4 Amazing Indicators used by the Experienced Traders

The new traders are always trying their best to learn the art of trading. In fact, some of them even buy expensive trading strategies from experienced traders in Hong Kong. But getting an expensive trading strategy from an experienced trader is not going to help you. Every trader is different in the investment industry. You need to assess your personality and based on the result, you have to create a unique trading system. Making a consistent profit, in the long run, it requires a strong game plan. Though the pro traders use different kinds of tools to find great trades today we are going to highlight four major indicators which can change your trading career. These are:

  1. RSI indicator
  2. Stochastic indicator
  3. Bollinger Band
  4. Simple moving average

RSI Indicator

The RSI indicator is extremely popular among the professional traders. RSI stands for relative strength index and helps traders to find the overbought and oversold conditions of the currency pairs. Being a new trader you might think trading is all about finding the great trades. But the pro trader’s believes in quality trade execution and to do so, some of them uses the RSI indicators. For instance, if they spot any buying signal in the chart, the look for an oversold RSI reading. On the contrary, they look for overbought RSI reading when the price of a certain asset hits a critical resistance point. Make sure you use the RSI indicator to trade the major currency pairs only. If you trade the cross pairs you need to tweak the settings of this indicator.

Stochastic indicator

Just like the RSI indicator, stochastic indicators help the retail traders to find the overbought and oversold condition of a certain asset. But you can use it to trade the synthetic or cross pairs. If you load the stochastic indicator in your trading platform, you will see two different levels. Level 20 is considered as the oversold region and level 80 is your overbought region. So based on the types of trade you find the market, use the stochastic reading to assess the quality of the trade setup. Though the indicator generates high-quality signals, never use it in the lower time frame.

Bollinger band

The Bollinger band is a very popular indicator and it helps the retail traders to find the dynamic support and resistance level. The upper band acts a strong resistance and the lower band act as a dynamic support level. When the price of a certain asset hits the lower band, you need to look for bullish price action confirmation signal. Similarly, when the price of a certain asset hits the upper band you need to look for bearish price action signal. Just like a stochastic indicator, you need to use it in the higher time frame or else you will have to trade the minor levels of the market.

Simple Moving Average

The simple moving average is often known as SMA. The professional traders use the 100 and 200 SMA to find the dynamic support and resistance level in any asset. Those who want to scalp the market can easily make a profit since the price of a certain asset greatly respects these two levels. Being a new trader, you need to use it in the daily and weekly time frame. However, if you want to scalp the market, you need to use it in the 4-hour time frame. Try using a simple bar pattern formation to execute the trade at the dynamic levels of this indicator. Things might seem really hard at the initial stage but you can always use the demo account to master this trading technique. If you intend to use these indicators to scalp the market, make sure you never risk more than 1% of your account balance. Always remember, the conservative traders are the one who make a consistent profit.

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