Learning Investment - Indicators
in Technical Analysis is a mathematical formula that serves to determine how
market conditions and also to help provide buy and sell signals. Today there are
hundreds or even thousands of indicators that have been made. Each indicator
has a character and how to use each one. The following article will discuss
four different indicators Technical Analysis is the most popular. Also
discussed how to use them.
1. MOVING AVERAGE
Can
not be sued again, Moving Average (commonly abbreviated MA) is an indicator of
a million people for a trader. Feel free to ask any trader, would never use or
at least know Moving Average. Understandably, this indicator is the most modest
compared to other indicators of Technical Analysis. This indicator calculates
the average price movement of a stock within a period of time, eg, within 50
days, or often called MA50. How to use this indicator is to look at the price
position compared to the MA50. If the stock price crosses MA50 upwards is
considered a buy signal. While on the contrary, if the stock price crosses MA50
downward considered a sell signal.
2. RELATIVE STRENGTH INDEX (RSI)
Relative
Strength Index (RSI) is used to calculate the ratio between the attraction
increases and decreases in the price, value ranges from 0-100. With RSI you can
know whether a price is overbought or oversold. In principle, the use of RSI is
very easy. If the RSI-value is very high (above 70) means that the market is
overbought (oversold), so there is potential to fall, it's time to sell.
Conversely, if the RSI-value is very low (below 30) means the market is
oversold (oversold), so there is the potential to rise, it's time to buy.
3. stochastic
Stochastic
developed by George C. Lane in the late 1950s. Stochastic is an indicator that
shows the location of the last closing price compared with the price range lows
/ highs during a specific time period. There are three types of Stochastic
Oscillators: Fast, Slow, and Full. Usually there are two lines in the
Stochastic, the% K and% D. Buy and sell signals can be seen from the% K and% D.
If the% K% D cut up, means a buy signal. Meanwhile, when the% K% D cut down
means a sell signal.
4. Moving Average Convergence
Divergence (MACD)
Moving
Average Convergence / Divergence (MACD) is a very useful indicator for a
trader. This indicator serves to indicate the trend is going and also can
provide buy and sell signals. In the MACD two lines that you will encounter,
namely the MACD Line and the Signal Line. If the value of MACD is positive
(above zero), means that the market is bullish, it is recommended to buy.
Meanwhile, if the value of MACD is negative (below zero), means that the market
is bearish, selling recommended.
See Also New Robot Trading
4
plagues most popular indicators of Technical Analysis. Selection of the
indicators are based on Google search rankings. The most popular are usually
also the most widely used by traders. But this indicator is not necessarily
suitable for you. So you should try it yourself and determine which are
suitable for trading.