Main Indicators Used in Technical Analysis

TYPES OF TECHNICAL ANALYSIS INDICATORS

RSI (Relative Strength Index)

It is an indicator used to detect when a financial asset is overbought or oversold. It has limits in the 30 and 70 bands and it is thought that the movement will change direction at these levels. Below 30 indicates oversold, above 70 indicates overbought.

MACD

It refers to the momentum indicator formed by the divergence or convergence of the moving averages. It consists of two moving average lines: the MACD and the signal line. By measuring the difference between MACD and price movements, information about the current trend can be obtained. The trend could change in the near term if the MADC lower price is making a higher high.

CCI (Commodity Channel Index)

It catches the beginning of the trend in the short-term sideways markets. A value average is formed by adding the closing values ​​together with the lowest and highest values ​​in the specified period and dividing them by three. This calculates how far the market price has moved away from the moving average. Below -100 it indicates an oversold shadow, and above +100 it indicates an overbought shadow.

Bollinger Bands

Used to calculate the price volatility range, detecting potential overbought and oversold conditions. It is generally preferred to create a buy-sell signal for the price reaching the limits in horizontal markets. It can be used as a tool to confirm trend start. Expansions and contractions in Bollinger Bands are also useful for predicting high and low volatility times. Therefore, it is a more suitable indicator for short-term trading decisions.

Moving Averages
  • Simple Moving Averages (SMA)
  • Exponential Moving Averages (EMA)
  • Weighted Moving Averages

It is the most basic indicator used to take the price average of the last period the price is in, and it is one of the best ways to understand how much the price movement has deviated from its usual course. It provides marking at the current price level by averaging a particular price data for the past. Thus, it can be determined how far the current price is from its historical average, and combining the realized deviation from the average with important data determines the trading decision. Moving averages are divided into different types according to the way they are calculated.

Parabolic SAR:

             Parabolic SAR is generally used by traders who want to analyze the short-term outlook of an instrument and learn about the trading time. The Parabolic SAR indicator is suitable for use because it offers two-way trading opportunities, and it means “Stop and Reverse”, that is, “stop and take a reverse position”. The abbreviation SAR stands for "Stop and Turn".

The concept of parabolic is a (lagging) trend-following indicator. It can be used to adjust the loss by trailing stop or identify entry or exit points for prices that tend to stay in a parabolic curve during a strong trend.

The Parabolic SAR is a time and price technical analysis tool primarily used to identify potential stops and turns.

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