What are Technical Indicators?
Technical indicators are simply a signal developed by applying a formula to the price data of a security. Indicators may use any combination of the open, high, low or close and volume over a period of time. The price data is entered into the formula, data points are produced and the indicator is formed.
There is no magic to indicators. Regardless of what you may have heard, all indicators are some form of price, time and/or volume plotted in a fashion to create buy and sell signals or to reveal trend. The skill comes in reading and interpreting what is happening with indicators in relation to the stock, its price, volume, trend, support and resistance.
The advantage of an indicator is that it offers traders a perspective perhaps not seen in the chart on its own. Indicators can be used as alerts, signals, or actual points of entry into a trade. Indicators do exactly as the name implies; they indicate. They are not a guarantee.
TradeWithPros Indicators
TradeWithPros uses indicators in the educational system to help create an overall picture of stock price movement. Indicators help with the “big picture” and should not be utilized independently but in conjunction with a good chart trading plan. TradeWithPros utilizes, along with price:
Exponential Moving Averages (EMA)
Commodity Channel Index (CCI)
Moving Average Convergence Divergence (MACD)
Slow Stochastic (SST)
Relative Strenght Index (RSI)
Volume