When it comes to technical analysis, indicators are crucial. No single indicator is completely reliable. Keep this in mind at all times. However, some indicators are more accurate than others.
There are numerous indicators that people have discovered to be the most accurate and reliable. However, there is no single indicator that is 100% accurate.
All we need to do is find an indicator with the highest accuracy possible and use it to our advantage.
You can experiment with all of the available indicators to develop a strategy. However, no strategy with all combinations of indicators will give you more than a 60% win rate.
Having said that, that doesn’t mean you can’t use indicators at all.
The best way to use indicators is to use it for
Stock selection –
Confluence.
From my personal trading experience, I would suggest traders not to completely ignore indicators. Use it in combination with price action, and you’ll be good to go.
And these are the technical indicators that I use on a daily basis.
Volume
VOLUME
Volume bars are the most accurate technical indicator that has ever been used in the market. The volume indicator contains no guesses or complex calculations. It simply displays the number of market participants involved during that time period.
When there is an upward move accompanied by an increase in the size of the green volume bar, it indicates that market participants are more interested in the bullish direction.
When there is a downward move accompanied by an increase in red volume bar size, it indicates that market participants are particularly interested in the bearish direction.
Any beginner can begin with a volume indicator such as volume bars, vwap, and so on.
Most traders use this as their sole indicator on their chart. Some even use this volume to scan stocks in order to find top-volume stocks with a higher chance of success.
Personally, I use it as a method of stock selection. Because I trade index options and the index chart has no volume. You can, however, use it on the premium chart.
However, when it comes to swing trading, this is my preferred method of stock selection.
ATR
AVERAGE TRUE RANGE (ATR)
The ATR indicator, which stands for average true range, is the next best indicator. According to me, this is the most accurate indicator ever, and I almost never trade without it.
This indicator displays the asset’s volatility during that time period.
This is the most accurate stop loss indicator I’ve ever seen, so I use it as a stop loss method. When using this indicator, I’ve almost never been fake stopped out.
All I do is have 1 or 2 * ATR points away from a trend’s pullback, enter at the pullback, and follow my money management rules. This is the most basic strategy that anyone can use with the most accuracy.
However, depending on the market and market conditions, the ATR multiplier (1 or 2) and money management rules vary.
You can read the in-depth article about stop-loss in this article.
This indicator is the most popular among day traders because stop loss plays the most important role in intraday trading.
Moving averages
MOVING AVERAGE
Moving averages are the third most important indicator that I use. This indicator simply displays the market’s trend over a specified number of days. So there is nothing incorrect about it.
Traders use this indicator alone or in combination with price action or other indicators.
This indicator can be used for
Stock selection
Entry
Stop-loss
Targets
Trend identification
Confluence etc.
I never trade without the 200 EMA because it identifies the overall trend of the market in a single glance. This is useful when manually checking stocks for entries.
It is suitable for all trading styles, including intraday, swing, scalping, positional, and so on.
This is the list of my most reliable indicators. It is now your turn to comment on the trading indicators you use.
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