Technical indicators are mostly employed by stock traders for raking briefly term profits. However, they're also useful for medium-to long-term investors.
However, if you dabble within the stock exchange on a day-to-day basis, or if you merely want to understand what drives the thinking of other market participants, it are often very beneficial to know the fundamentals of technical indicators.
Many traders swear by them to assist with the timing of their trades or to alert them of trends. But, even for an investor more focused on the underlying fundamentals of companies, learning how these indicators work can provide added conviction on new or existing trades.
Here are the four sorts of stock exchange trading indicators list:
1. Trend indicators
These measure the direction of a market trend—up trend, down trend and sideways trend.
2. Momentum indicators
These measure the speed of a trend and help to spot trend reversals. they're used only as warning signals—just just like the reducing speed of a car might not find yourself in it stopping altogether, all reductions in market momentum don’t find yourself during a trend reversal.
3. Volatility indicators
These indicate how uncertain a market is. Volatility is typically measured in terms of ordinary deviation.
4. Volume indicators
Volume or traded value plays a crucial role in generating trading signals. escape of trend lines or crossing the moving average aquires greater signifi cance signifi cant when accompanied with high volume.