Introduction:

In this article, you will gain basic knowledge about what technical indicator analysis is and where you can find these indicators on our trading platform. Many different indicators exist to provide different kinds of information. This article will give you a brief insight into the most common ones.

What are Technical indicators?

Technical indicators are tools used by traders to analyse securities and market sentiment. These indicators can provide insight into whether a price trend is likely to continue or reverse.

Technical analysis, which utilises these indicators, involves using this information to generate buy and sell signals for traders.

To develop a comprehensive technical analysis strategy, traders often use a combination of different indicators.

By examining metrics such as trading volume alongside these indicators, traders can gain a better understanding of market sentiment and make more informed trading decisions.

Where to find the indicators on our trading platform

On our platform, navigate to Trade (1) → Select an asset of your choice (2) → click on Chart (3)

On the top right corner of the chart view, you have the option to add the indicators of your choice. When clicking on “Indicators”, you will be presented with a list of different indicators in alphabetical order. Selecting them will add them below the main chart.

Accumulation/Distribution Line (A/D Line)

One of the most commonly used indicators to determine the money flow in and out of a security is the Accumulation/Distribution line (A/D line)

The Accumulation/Distribution Line is a technical analysis indicator used to measure buying and selling pressure in the stock market. It is based on the premise that the volume of trades is a key factor in determining the price of a stock.

The Accumulation/Distribution Line is calculated by taking the volume of trades and multiplying it by the price change for the day. If the closing price is higher than the previous day's closing price, the volume is considered to be positive and is added to the Accumulation/Distribution Line. Conversely, if the closing price is lower than the previous day's closing price, the volume is considered negative and is subtracted from the Accumulation/Distribution Line.

The Accumulation/Distribution Line is important because it can help traders identify trends and potential reversals in the market. If the Accumulation/Distribution Line is trending upward, it suggests that buying pressure is increasing and that the stock may be poised for a price increase. Conversely, if the Accumulation/Distribution Line is trending downward, it suggests that selling pressure is increasing and that the stock may be poised for a price decrease.

Traders who use the Accumulation/Distribution (A/D) line also look for divergence. If the A/D line starts to decrease while the price of the asset is increasing, this could be a sign that the trend is weakening and could reverse. Conversely, if the price of the asset is trending downward and the A/D line starts to increase, this could be an indication that the price may rise in the future.

Relative Strength Index(RSI)

The Relative Strength Index is an indicator used in technical analysis to help identify momentum and trend strength.

It is plotted between zero and 100, and measures recent price gains versus recent price losses. The RSI can be used as an overbought and oversold indicator, with values above 70 indicating overbought conditions and values below 30 indicating oversold conditions.

However, traders should be cautious when making assumptions based solely on these values. A divergence between the RSI and price movements can indicate a weakening trend.

Finally, the RSI can be used to identify support and resistance levels, with values above 30 indicating uptrends and values below 70 indicating downtrends.

The Moving Average Convergence Divergence (MACD)

The Moving Average Convergence Divergence is a technical indicator that helps traders determine the direction and momentum of the trend.

It consists of two lines, the MACD line and a slower-moving signal line. If the MACD line is above zero, the price is in an upward trend, while, if it is below zero, it is in a bearish trend. The MACD line crossing below the signal line indicates that the price is falling, while crossing above it indicates that it is rising.

To use MACD for trading, traders look at which side of zero the indicator is on and watch for the MACD to cross above or below the signal line, depending on whether it is above or below zero, respectively.

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