[Music] in this video we're going to show you the 10 best trading indicators that actually work now a very key point you should always combine the usage of indicators with price action please hit the like button but more importantly hit the notifications Bell so that you know exactly when new content is released let's dive right into it starting with volume profiles volume profiles tell you how much volume occurred at a specific price level this is key because traditional volume tools tell you how much volume was traded throughout an entire day which isn't as useful now there are different variants of the volume profile tool but we're focusing on the anchored volume profile to access it on the left here under forecasting and measurement tools click anchored volume profile then on your chart click where you want the volume profile to be applied from and you'll see it appear to the right These Bars here show you how much trading volume occurred at each price level the larger the bar the more volume was traded at that level this red line here is the point of control which is the level where the most trading volume occurred so why is high trading volume important the higher the trading volume there was at a level means the level was somewhere buyers and sellers had a lot of interest in and took big action at the level through buying and selling this means if price comes back to these levels again in the future buyers and sellers might have interest again in the level and take action again which presents trade entry and exit opportunities like any indicator you need to combine it with price action methods such as using key levels so this area here is what you're currently using to identify a trade setup you you apply your anchored volume profile here at the start of the move meaning the volume will only be calculated on the data after your Anchor Point your red line here is your point of control which is where the most trading volume occurred what this tells you is that this Zone here that previously had very high volume Becomes of interest to you and if price comes back to the Zone it presents long trade opportunities or an area that would be a good exit Target for short Traders now here's where the magic happens you want to pair areas of high volume with with key levels so if you zoom out notice these three very key reversal points that give you a key level and they are also in the same area of your high volume Zone making this overall Zone here even higher quality the higher the quality of the Zone means the higher the possibility of price reacting to the Zone if it comes back to it in the future now these bars here represent another high volume area these reversal points here represent a key level the combination of the key level and high volume area area make this a highquality Zone to watch for trade opportunities you then have this large volume bar here that is also where you have multiple reversal points of price giving you another highquality Zone to watch for trade opportunities if you want to use the exact charting platform we are using it's linked in the description [Music] below now you can also apply the volume profile tool to an entire area to help find the best key zones apply your anchored volume profile your point of control here and multiple reversal points gives you a key Zone this high volume bar here and multiple reversal points gives you another key Zone this high volume bar here and large reversal Point gives you another key zone now there is a variant of the volume profile known as session volume profile which is what you use if you are a day trader or very low time frame Trader this is the 15-minute time frame notice how you see multiple separate volume profiles each one of these represents one trading session and it auto resets once the next trading session begins using the session volume profile allows you to take quick In-N-Out day trading entries if you want to learn more about lower time frame trading go to WIS trade.com so next stochastic oscillator to access a indicator click indicators type in a stochastic select it right here and it will appear below your chart the stochastic oscillator is a momentum indicator that is used to identify overbought or oversold prices the line above is 80 and the line below is 20 when the stochastic goes above 80 price is deemed overbought or expensive and signals a possible Trend change from an uptrend to a downtrend when the stochastic goes below 20 price is deemed oversold or cheap and signals a possible Trend change from a downtrend to an uptrend remember to pair the overbought and oversold regions with Trend change price action and not to use it on its own now another method to using the stochastic indicator is through the crossover method the blue line here is known as the percentage K this orange line here is known as the percentage d in an uptrend the percentage K is above the percentage D or blue is above orange but once the percentage D crosses below the percentage K or once the blue goes beneath orange this signals momentum loss from the buyers and that a possible Trend change is coming from an uptrend to a downtrend in a downtrend the percentage K is below the percentage D or blue is below orange but once the percentage k crosses above the percentage D or once blue goes above orange this signals momentum loss from the sellers and that a possible Trend change is coming from a downtrend to an uptrend again you should pair the crossover method with other price action such as using key levels this reversal Point gives you a key resistance level as price comes back up you have shrinking candles hanging candles and a very long with candle all showing a reaction to the level once you had the stochastic crossover occur this confirms the trend change from an uptrend to a downtrend and is when you would look for a short entry point now another method to use the stochastic indicator is through Divergence which allows for higher quality reversal trade setups this reversal Point here gives you a key support level price makes a lower low whereas the stochastic makes a higher low giving you a Divergence trend line placed above and once price broke the trend line and made a higher high the trend change is confirmed and it's then when you would look for long entries this reversal Point here gives you a key resistance level price makes a higher high whereas the St castic makes a lower high giving you a Divergence once price broke the neckline and made a lower low you would look for short entries this is the Nvidia stock these reversal points give you a key support level as price comes back down it makes a lower low whereas the stochastic makes a higher low giving you a Divergence trend line placed above and once price broke the trend line and made a higher high Trend change confirmed and it's then when you would look for a long entry point using our entry strategy so next Donan channels the upper band represents the highest high of the previous period the lower band represents the lowest low of the previous period the middle line shows you the average of the high and low of the previous period now when you see price consistently touching the bottom of the channel over and over again this signals a strong moving downtrend and a bearish market which which means you want to look for short continuation trades once price breaks away in the opposite direction this would be a good time to exit your short positions as a potential reversal is coming when you see price consistently touching the top of the channel over and over again this signals a strong moving uptrend and a bullish Market which means you want to look for long continuation trades once price breaks away in the opposite direction this would be a good time to exit your long positions as a potential reversal is coming now the best way to use Donan channels is during sideways markets because the upper band acts as a form of resistance which presents short trade opportunities and then the lower band acts as a form of support which presents long trade opportunities as always don't use the Donan channel on its own combine it with other price action methods such as support and resistance key support level with multiple touches price comes back down and forms multiple long with candles at the key support level which presented a long trade opportunity price is also touching the lower Donan Channel band which represents an oversold region and an area of value within this current time period this is also a double bottom reversal pattern neckline here and once you had the break of neckline and higher high you would look for a long entry point through the lower intraday time frames so next the anchored vwap vwap stands for volume weighted average price and is different from a traditional moving average as it takes volume into account so to access the anchored VAP on your left under projection click anchored vwap then on your chart click where you want the vwap to be applied from and you'll see it overlaid on your chart the middle line here is the vwap line when price is above the vwap line it signals a bull market and can also act as a form of support and presents long trade opportunities if price breaks through the vwap it can signal a possible Trend change going in the opposite direction price being below the vwap line signals an overall bearish Market the vwap line also acts as a form of resistance when price is below it if price breaks cleanly through it signals a larger Trend change is coming again you need to pair the vwap with price action methods this is the PayPal stock you have a large moving downtrend so you want to trade with the trend this here is your short trade setup with the longwick at the key resistance Zone that has also a weekly Zone you have an uptrend here a downtrend here and an uptrend here now since you're using these three reversal points here as part of your key Zone and the fact that the three reversal points are part of this larger moving uptrend here you need to set your vwap Anchor Point at the start of the uptrend move right here notice how the vwap area of value crosses perfectly with your short trade setup making it an even higher quality short trade entry you would look for an intraday Trend change confirmation before taking a short entry using our entry and exit strategy so next Ballinger bands before we continue we want to hear from you tell us in the comments below right now what video topics we should cover next as always please hit the like button as it allows for our team to continue you to produce more free videos on YouTube so first what is the Ballinger band indicator it is used to help you identify trending markets versus consolidating markets because of its ability to gauge Market volatility in simplified terms you can use Ballinger bands to identify overbought or oversold trade entries but also you can use it to identify breakout momentum trade entries so to access the Ballinger band indicator find your indicators type in Ballinger select the indicator and it will appear as an overlay on top of your charts leave the settings as a default which is the middle line being a 20 period moving average the upper band being two standard deviations above the middle line and the lower band being two standard deviations below the middle line so the bands are traditionally used to interpret Market volatility during periods of low volatility you'll often notice that the bands contract and can result in a sideways consolidating market during periods of high volatility you'll often notice the bands expand and can result in a trending market so one of the traditional ways Ballinger bands are used is as a form of support and resistance when price reaches the band above it can act as a form of resistance and bounce off of it and reverse downwards when price reaches the band below it can act as a form of support and bounce off of it in reverse upwards so to increase the quality of this setup you can do two things first apply this strategy to a sideways Market notice how the bands are moving horizontally and price is moving sideways so whenever price hits it results in a quality reversal and second pair the band touch with a key level and Candlestick price action you first identified your key level because of this reversal Point here to the left when price comes back up to the key level notice how it also lines up with where the upper Ballinger band is making it an area of Confluence you then wait for Candlestick price action to occur which you had through this longwick candle that formed right at the key level and the upper band which shows a reaction to the level as always a reaction does not equal an automatic trade so you need to look for a trend change confirmation to show that the uptrend is over and that the reversal has begun Trend change price action comes in many forms but in this case here a simple way would be to wait and see if you get a momentum candle like this to form off of the level before looking for a trade entry short now in the opposite direction this works the same you had your key level here because of this reversal point when price came back down you had a long with candle form at the key level and at the lower band making this an area of Confluence then once you had the momentum candle form off of the level you would look for a long trade entry through the same time frame or through a lower Inay time frame now let's dive into the baller band break strategy so the core of this strategy involves looking for a break outside of the bands like this and expecting price to reverse in the opposite direction now there are two kinds of Ballinger band brakes to look for type one is where you have a slight break and where the majority of the candle is still inside of the Bands this is a good quality break type two is where the candle breaks but the majority of the candle body is outside of the band the further outside of the band it is the better and evidently if the body is completely outside and doesn't touch the band at all anymore that is the best type two is a highquality Ballinger band break as it represents a very overbought or oversold region so let's combine the Ballinger band break with key levels you had your key level of support because of these two reversal points as price reached the level you had a Ballinger band break right at the key level also look at how far the candle body broke outside of the band this is a very highquality band break then once you had a trend change confirmation through the momentum candle you would take a long entry through the same time frame or through the lower intraday time frames one more example you had your key level of support because of these two reversal points when price came back here price breaks outside of the band at the key level and you also had multiple long Wicks forming which presented a great long trade opportunity and again when price came back here it broke broke outside with a lot of the candle body outside as well as multiple very longwick candles right at the key level this is a very high quality long trade setup you have your key level of resistance because of this reversal Point here as price came back up you had a Ballinger band break right at the key level then once you had a trend change confirmation through the lower intraday time frames you would look for short trade entries so next the macd indicator so what is the macd indicator macd stands for moving average convergence Divergence the indicator tracks the relationship between two moving averages one fast and one slow now to keep things simple the macd indicator can be used for gauging or confirming Trend changes or Trend continuations so to access the macd indicator click on indicators type in macd and here it is moving average convergence Divergence once you click it it will then appear down here below your charts leave the settings as the default which are fast length 12 slow length 26 and Signal smoothing 9 the line in green here is the macd line also known as the fast length the line in white here is the signal line also known as the slow length and this here is the histogram now the first way to use the macd is through the crossover method so price is trending downwards then once the macd line crosses above the signal line it signals a possible Trend change from a downtrend to an uptrend meaning possible long trade opportunities present themselves going in the opposite direction when price is trending upwards and the macd line crosses below the signal line it signals a possible Trend change from an uptrend to a a downtrend meaning possible short trade opportunities present themselves the next way to use the macd is through the histogram method in an uptrend when you see the histogram bars getting larger and larger it shows a gain of upwards price momentum which can be used for continuation long trade entries but then when you notice the histogram bars starting to shrink it signals a loss of momentum and may result in a possible Trend change from an uptrend to a downtrend and presents possible reversal trade opportunities short going in the opposite direction in a downtrend when you see the histogram bars getting larger and larger it shows a gain of downwards price momentum which then can be used for continuation trades short but then when you notice the histogram bars starting to shrink it signals a loss of momentum and may result in a possible Trend change from a downtrend to an uptrend which then presents possible reversal trade opportunities long the next way to use the macd is through divergences so here is the anatomy of Divergence in an uptrend price makes a higher high whereas the macd indicator makes a lower high which shows a Divergence between price and the macd indicator now let's show this on the charts so again price makes a higher high whereas the macd indicator makes a lower high which is Divergence and triggered a trend change now what does Divergence in an uptrend tell you in terms of price action Divergence can act as an early signal of a possible Trend change from an uptrend to a downtrend or to be more specific it can present possible short trade opportunities now going in the opposite direction in a downtrend here is the anatomy of Divergence in a downtrend price makes a lower low whereas the macd indicator makes a higher low which shows a Divergence between price and the macd indicator now let's show show this on the charts so again price makes a lower low whereas the macd indicator makes a higher low which is Divergence and triggered a trend change so what does Divergence in a downtrend tell you in terms of price action Divergence can act as an early signal of a possible Trend change from a downtrend to an uptrend or to be more specific it can present possible long trade opportunities so next ichimoku so find your indicators type in ichimoku and select it now as a heads up we do not use all these lines but let's first break down what they are the line in blue is the conversion line the line in red is the Bas line the line in green is the lagging span the line in light green is the leading span a the line in light red is the the leading span B now the only part we use is this highlighted area here in between the leading span a and leading span B which is what we refer to as the core ichimoku Cloud this is why you don't need to know all the theory behind these lines because you don't need all these lines on your chart it looks messy will confuse you and give you a lot of contradicting signals so we're going to remove all these lines and only keep the leading span a and leading span B which forms the cloud now let's get into how the ichimoku cloud is traditionally used so first getting your directional bias by looking at whether price is above the cloud or below the cloud when price is above the cloud this often signals a bullish upwards Market when price is below the cloud this often signals a bearish downwards market so next gauging momentum by looking at the distance between price and the cloud starting in an uptrend the further away price is from the cloud like this shows heavy bullish momentum in contrast when you see price moving closer to the cloud like this or chopping around inside of the cloud it signals a loss of bullish momentum and price consolidating now in a downtrend the same thing price being further away from the cloud like this shows heavy bearish momentum in contrast when you see price moving closer to the cloud like this or chopping around inside of the cloud it signals a loss of bearish momentum and price consolidating so next when price breaks through the cloud it can confirm a trend change starting in an uptrend price is above the cloud signaling a moving uptrend when price then breaks through and ends up below the cloud it signals a trend change from an uptrend to a downtrend again price is above before it breaks through and below below the cloud this shows a trend change from an uptrend to a downtrend in a downtrend the same thing price is below the cloud signaling a moving downtrend when price then breaks through and ends up above the cloud it signals a trend change from a downtrend to an uptrend now moving on so the ichimoku cloud can be used as a form of support and resistance starting in an uptrend when price is above the cloud and price pulls back to the cloud notice how it reacts to the outline of the cloud and Cloud border acting as a form of support what this means is long trade opportunities Arise at these areas where price can bounce upwards from now price can also enter the cloud before reversing which is another way the ichimoku cloud acts as a form of support so going in the opposite direction in a downtrend when price is below the cloud and price pulls back to the cloud notice how it reacts to the outline of the cloud and the cloud border acting as a form of resistance what this means is short trade opportunities Arise at these areas where price can bounce downwards from so price can also enter inside of the cloud before reversing which is another way the ichimoku cloud acts as a form of resistance again multiple reactions as resistance before reversing downwards and again multiple reactions as resistance before reversing downwards now you can combine an ichimoku Cloud break with an ichimoku Cloud pullback entry for higher quality trade setups you have your moving uptrend and price being above the cloud price then breaks through the cloud and below it signaling a trend change from an uptrend to a downtrend price then immediately pulls back and forms multiple long with candles at the ichimoku cloud resistance which presented a short trade opportunity once you have an intraday Trend change confirmation you would take short entries now these kinds of setups that occur right after the break through the cloud are of higher quality because you are getting into a trade at the start of a fresh Trend meaning the trend has legs and room to move a lot further price is above the cloud which signals an uptrend once price breaks below the cloud this is a trend change from an uptrend to a downtrend you then had an immediate pullback and Candlestick reaction to the ichimoku cloud resistance which presented a short trade opportunity once you had your intraday Trend change confirmation you would take short entries so going in the opposite direction in a downtrend price is below the cloud signaling a moving downtrend price then breaks through the cloud and above it signaling a trend change from a downtrend to an uptrend price then pulls back inside the cloud as support presenting a long trade opportunity once you had an intraday Trend change confirmation you would take long entries so again prices below the cloud signaling a moving downtrend price then breaks through the cloud and above it signaling a trend change from a downtrend to an uptrend price then pulls back to the cloud as support and forms this very longwick candle presenting a long trade opportunity once you had an intraday Trend change confirmation you would take long entries so now you can also use the ichimoku cloud for trade exits you have your moving downtrend you have your trend line connecting the swing highs once price broke through the trend line signaling a trend change from a downtrend to an uptrend you would be taking long entries through finding long trade setups on the lower intraday time frames then once price reached the ichimoku cloud you would consider closing out those long positions in case price reversed off the ichimoku cloud so moving on to the next strategy so this strategy involves finding a trade setup in the same direction as the ichimoku cloud directional bias for a higher quality trade entry starting in an uptrend and above the cloud this is the aen 15-minute time frame price is above the cloud giving you a bullish upwards directional bias so what you do is you look for any type of long trade setup so that you are trading with the bullish momentum given to you from the ichimoku cloud the trade setup came right here through this area of Confluence where you have the support level and the moving average both Crossing you then had multiple candles reacting to the level failing to push through giving you a validated long trade setup you would then go to the very low time frames to wait for a trend change confirmation before taking long entries so let's show this again this is the 1H hour time frame price is above the cloud giving you a bullish upwards directional bias so you want to look for long trade opportunities to trade with the upwards ichimoku directional bias this is where the long trade setup occurred as you had this great key level here with multiple reversal points making it of higher quality you then had multiple on with candles reacting to the level and failing to push through giving you a validated long trade setup you would then go to the very low time frames and wait for a trend change confirmation before taking long entries so let's show this again this is the 4-Hour time frame again pric is above the cloud giving you a bullish upwards directional bias so you want to look for long trade opportunities to trade with the upwards ichimoku directional bias this is where the long trade setup occurred because you had a great support level with multiple touches as well as a trend line with multiple touches both Crossing making this a higher quality trade setup you then had shrinking candles followed by multiple long with candles reacting to the level which validates the long trade setup and makes this a very highquality long trade you would then go to the very low time frames to wait for a trend change confirmation before taking long trades so now going in the opposite direction in the downtrend and below the cloud price is below the cloud giving you a bearish downwards Direction directional bias so you want to look for short trade opportunities to trade with the downwards ichimoku directional bias this is where your short trade setup occurred where the trend line resistance level and moving average all crossed you then had a ton of candles reacting to the level and failing to push through showing that this area is valid and presented a higher quality short trade setup as always wait for a trend change confirmation through the lower intraday time frames before taking short entries so moving on to the next strategy now this strategy involves finding trade setups at key levels or areas of Confluence where the ichimoku cloud also lines up to increase the quality of a trade setup starting in an uptrend and above the cloud this is the 4-Hour time frame price is above the cloud so you have a bullish bias you then had the support level here this is where the long trade opportunity setup was because you had multiple candlesticks reacting to the support level and the cloud as always find an intraday Trend change before taking a long entry again price is above the cloud so you have a bullish bias you have your support Zone here because of these two reversal points long trade opportunity here where you had price reacting to the support level and the cloud this is the 4-Hour time frame price is above the cloud so you have a bullish bias key level here because of this reversal point and this false breakout reversal point this is where your long trade opportunity presents itself because price reacted to the key level and trend line and also entered the cloud as always find an intraday Trend change confirmation before taking a long entry this is the 1-hour time frame price is below the cloud so you have a bearish bias short trade set up here because you had multiple long with candles reacting to the resistance level and the bottom of the cloud so next Fibonacci so in an uptrend these are the Fibonacci levels we look for first the 50% Fibonacci level which is what we call good because it represents a deep pullback within a moving Trend next is the Zone in area between 50% fib and 61.8% FIB which is what we call great because it represents a deep pullback within a moving Trend then we have the 61.8% Fibonacci level which is what we call best because it represents a very deep pullback within a movie Trend in the opposite direction in a downtrend the same thing 50% Fibonacci is good the Zone in area between 50% fib and 61.8% FIB is great and 61.8% Fibonacci is best so two very key points one Fibonacci retracement levels act as a form of support and resistance as they represent areas of value within a moving Trend this means trade opportunities present themselves at these Fibonacci levels because the big boys look to add to their winning positions at these areas of value which creates momentum for your trade and two treat Fibonacci levels as areas and not as a solid line or solid number because you use Fibonacci levels in combination with price action and not on their own so it doesn't have to be a picture perfect setup let's now show this right on the charts you have your moving uptrend through the higher highs and higher lows these runs are known as your impulse moves these pullbacks are known as your corrective moves price starts pulling back right here and you decide you want to look for a possible pullback long entry to trade with the uptrend but you're not just going to jump in blindly at any random spot you want to enter a trade setup at an area of value within the moving uptrend so you take your Fibonacci tool click at the recent swing low here drag it up to the recent swing high and then move it a bit to the right so that it stretches out and then click again to lock it in your Fibonacci levels are here to the right so once price reaches any of these Fibonacci levels you would look for Candlestick price action followed by a trend change confirmation before taking a long entry if you want to use the same Fibonacci tool and platform we use go to tools. trade.com now going in the opposite direction in a downtrend you have lower highs and lower lows these runs are known as your impulse moves these pullbacks are known as your corrective moves price starts pulling back right here and you decide you want to look for a possible pullback short entry to trade with the downtrend but you're not just going to jump in blindly at any random spot you want to enter a trade setup at an area of value within the moving downtrend so you take your Fibonacci tool click at the recent swing High here drag it down to the recent swing low and then move it a bit to the right so that it stretches out and then click again to lock it in your Fibonacci levels are here to the right so once price reaches any of these Fibonacci levels you would look for Candlestick price action followed by a trend change confirmation before taking a short entry let's now show this combined with price action you have your uptrend through the higher highs and higher lows price pulls back to the 61.8% Fibonacci level which represents a very deep pullback and an area of value within a moving uptrend you had longwick candles form right at the FIB level showing that price is indeed reacting to the FIB level you then wait for a trend change confirmation before taking long trades which you had through the bullish momentum candle that is also a candle color change now in the opposite direction you have a downtrend through the lower highs and lower lows price pulls back to the 50% Fibonacci area which represents a deep pullback and an area of value within a moving downtrend you had multiple candles with the Wix sticking out that formed right at the FIB level showing that price is indeed reacting to the FIB level you then wait for a trend change confirmation before taking short trades which you had through either the bearish momentum candle or after the double top pattern formed so this was using Fibonacci levels in the simplest form let's now take it up a notch and combine Fibonacci levels with support and resistance and areas of Confluence combining FIB levels with support and resistance in areas of Confluence gives you higher quality trade setups meaning a higher percentage chance of success and of the trade going a greater distance for higher profits so this reversal Point here gives you a key level this here is your area of Confluence where the support level moving average and Fibonacci all lined up perfectly once price pulled back to the area you had a longwick candle form right at the area of Confluence and with the wick touching the 50% FIB level you also had a candle color change and inside bar which shows momentum loss once you had an intraday Trend change confirmation you would look for long entry points let's show this again you have a mov moving downtrend followed by consolidation then a break above and higher high which shows the start of a fresh Trend change and upwards momentum these two reversal points here give you your key level this here is where the support level and 50% FID level both lined up once price pulled back to the area you had multiple candles with the wick sticking out showing a reaction to the area once you had an intraday Trend change confirmation you would look for long entry points so again these reversal points give you a key level price breaks through the very key level showing how strong the uptrend is now you don't know if this is a false breakout or not so one way to get around this problem is to look for a pullback entry which you had right here where the support level moving average trend line and 50% Fibonacci all lined up perfectly making it an area of Confluence you had multiple candles with the Wix sticking out and a double bottom pattern form all which shows a reaction to the area you can take a long entry after the bullish momentum candle and higher high or for an earlier entry point look for the intraday Trend change confirmation now going in the opposite direction in a downtrend you had a short trade setup here where the moving average and key level both crossed this is also where the 50% FIB level lined up you had a candle color change and Wix sticking out and created a successful short trade another short trade set up here where the moving average and key level both crossed this is also where the 50% to 61.8% fit Zone lined up you had multiple long with candles form showing a reaction and another successful short trade another short trade setup here this is also where the 50% FIB level lined up you had multiple candles with the Wix sticking out and a double top pattern all which shows a reaction and created another successful short trade so next the RSI indicator RSI stands for relative strength index and it's an indicator that you apply to your charts that is often used for identifying overbought or oversold markets so let's apply the RSI to our charts at the top here click indicators type in R and it'll show up right here click relative strength index and then it will be applied to your charts along the Bottom now this line here is 70 on the RSI and this line here is 30 on the RSI everything at or above the 70 Line is what we call the overbought Region everything at or below the 30 line is what we call the oversold region so in relative terms when the RSI line touches the 30 just like it is right here it indicates that the price of the asset you are looking at is cheap when the RSI line touches the 70 just like it is right here it indicates that the the price of the asset you are looking at is expensive when the RSI enters oversold they'll start buying and entering long positions expecting price to go up when the RSI enters overbought they'll start selling and entering short positions expecting price to go down so you can also use the RSI to find divergences so in this uptrend here price made a higher high but on the RSI it made a lower high which created a Divergence and resulted in a reversal of price again to the left price made a higher high whereas the RSI made a lower high which created a Divergence and resulted in a reversal of price so going in the opposite direction in this downtrend price made a lower low whereas the RSI made a higher low which created a Divergence and resulted in a reversal of price so next exponential moving average the exponential moving average or EMA is an indicator that removes the random fluctuations of price resulting in a cleaner visualization of the actual price movement this here is the exponential moving average the most commonly used moving average is the 50 EMA but other popular settings are 100 and 200 we use a variant of the moving average and if you're a member you'll know exactly what we're referring to so in a downtrend when you see price trending below the moving average this confirms bearish momentum and you would lean towards taking short entries you can also use the moving average as a form of resistance for bounce short trades if you see price break above the moving average this signals a loss of bearish momentum and that a possible Trend change is coming from a downtrend to an uptrend in an uptrend when you see price trending above the moving average this confirms confirms bullish momentum and you would lean towards taking long entries you can also use the moving average as a form of support for bounce long trades if you see price break below the moving average this signals a loss of bullish momentum and that a possible Trend change is coming from an uptrend to a downtrend if the moving average is cutting right through price this shows a sideways directionless market now the best way to use the EMA is to combine it with areas of Confluence for high quality entries this here was your long trade setup first you have a clear moving uptrend so you want to trade with the trend you're at a key Zone through these reversal points you're at the 61.8% Fibonacci retracement level which is a high quality area of value within a moving Trend you're at the stochastic 20 which represents oversold and an area of value where prices deemed as cheap within this time period now price is also reacting to the exponential moving average through this longwick candle and during an uptrend the EMA acts as a form of support here's a bonus tip the moving average was also recently respected right here close by to the left meaning the market is respecting the moving average during this time period all of these factors make for a very high quality long trade setup now the indicators that we covered in this video are just the basics if you want access to the advanced trading tools we use that give us a huge advantage over other Traders go to WIS trade.com tell us in the comments below right now what your favorite indicator is to use but more importantly how you use it make sure to hit the like button on this video as it allows for our team to continue to produce more free content on YouTube so thanks for watching and I'll see you in the next [Music] episode