03.4 Indicator

Indicator

To find the right time to enter.
Set at default setting – in mathematic form – in mathematic formula.

Parabolic SAR

Indicator that can help us determine where a trend might be ending is the Parabolic SAR (Stop And Reversal)
Parabolic SAR places dots, or points, on a chart that indicate potential reversals in price movement.

How to Trade Using Parabolic SAR

When the first dots are below the candles, it is a buy signal.
When the first dots are above the candles, it is a sell signal.

Stochastic

Stochastic is another indicator that helps us determine where a trend might be ending.
Stochastic is an oscillator that measures overbought and oversold conditions in the market.

How to Trade Using the Stochastic

Stochastic tells us when the market is overbought or oversold. The Stochastic is scaled from 0 to 100.
When the Stochastic lines are above 80 (the red dotted line in the chart above), then it means the market is overbought.
When the Stochastic lines are below 20 (the blue dotted line), then it means that the market is oversold.

Moving average

Moving averages smooth the price data to form a trend following indicator. They do not predict price direction, but rather define the current direction with a lag.
Closing price.
The trend.

More active, closer to candlestick

Moving average – 5 periods.

An example

Moving average (5) is the most active line, if this line cross up to moving average (20)
– There is a signal of uptrend market.
Moving average (5) is the most active line, if this line cross down to moving average (20)
– There is a signal of downtrend market.