Types of Trading IndicatorsTraders use different types of indicators to gauge the market conditions. Let's take a look at what are those types of indicators
Trend Indicators measures the direction and strength of a trend. When price moves above the average it can be thought of as a bullish trend. When price moves below the average, it's a bearish trend.
Momentum Indicators are helpful as they are used to identify price movements by comparing prices over time. Can also be used to analyze volume by comparing current closing prices with previous closing prices.
Volatility Indicators are used to analyze the periods of high and low volatility. The big swings created by the volatility can provide good trading opportunities.
Volume Indicators plays an important role in technical analysis in confirming trends and patterns which makes volume indicators popular amongst traders.
There are hundreds of indicators that can be categorized within these four categories. Also, a volume indicator can be used as a trend indicator or a volatility gauging indicator. The same goes for momentum or trend indicators. Some traders use one indicator to gauge volume while another trader can use the same indicator for another purpose.
What kind of Indicators do you use in trading the most and why? It all depends upon the type of trading we are doing off course. Would love to know your opinions in the comment box below.
Follow us for more educational analysis, technical ideas, and script updates.
Happy Trading!
