Transcript for:
Technical Indicators in Trading

So, our first indicator is RSI. It shows overbought and oversold zone. Three levels are very important in this. One is the level of 70. Second is the level of 50. And third is the level of 30. First, let's talk about 50. If RSI goes above 50. If this blue line goes above 50. Then it is believed that the stock is bullish. If it goes below 50. Then it is believed that the stock is bearish. Second, if this RSI line goes above 70. And when it comes back after going up. Then it is believed that the stock is overbought. And now there are chances of its price falling. And if this RSI line goes below 30. And when it comes back after going down. Then it is believed that the stock was oversold. And now there are chances of its price increasing. The default setting of this indicator is 14 period. Which is considered best. But you can adjust it according to you. Next indicator is Moving Average Simple. Or Simple Moving Average. As soon as you plot it on the chart. Then you get a line like this. Which is basically an average of your share price. And this is a Simple Moving Average. And this is a 9 period Moving Average. But its settings are changed according to different trading strategies. The popular setting in this is 50 period. So as soon as we have put a 50 period Moving Average. Now this line is the average price of the last 50 candles. So if the price goes above its average price. Then it is believed that there are chances of its price increasing. And if the price goes below its average price. Then it is believed that there are chances of its price falling. This indicator is often plotted twice on the chart. And their settings are kept different. Like we have selected Simple Moving Average of 50 period. So here we have selected another Simple Moving Average. So now you can see two lines. And here it is by default 9. So we change it according to our settings. So we have selected 200. So here the 50 period and 200 period Moving Average has been done. Now here you can change their colors according to your choice. Like I change the color of 1. Red color. And I leave the other color blue. So here my 200 period Moving Average is of red color. And the 50 period Moving Average is of blue color. So if our 50 period Moving Average line cuts the 200 period Moving Average line downwards. Then it is believed that the price can fall from here. And if our 50 period Moving Average line cuts the 200 period Moving Average line upwards. Then it is believed that the price can increase from here. This is a lagging indicator. So generally it gives a little late signal. But if you use it with price action. Then it is a very useful indicator. Now before telling the next indicator. If you want to open the best Demat account for trading or investment. Then I have given some good Demat account links in the description. So do check the description. Now our next indicator is EMA. That is Moving Average Exponential. It also tells the average like Simple Moving Average. But where in Simple Moving Average. First candle and last candle are given equal importance. Whereas in Exponential Moving Average. The last few candles are given more importance. Which is believed to have more accuracy than EMA. But if you see in actual. Then you won't see much difference. Here to explain to you. I have given 50 period Exponential Moving Average. But if I also put 50 period Simple Moving Average. So this orange line is 50 period Simple Moving Average. So you can see that there is not much difference between the two. But if we see. Then our Exponential Moving Average. That is this line. It is more accurate in many places. The rest of the Exponential Moving Average. It also works like Simple Moving Average. If the price goes above it. Then it is believed that the stock is bullish. If the price comes below it. Then it is believed that the stock is bearish. Now our next indicator is Bollinger Bands. To put this indicator. You have to search with Bollinger Bands. After going to the indicator section. And after that tap on it. Now as soon as you put this indicator. Here you get to see three types of lines. The blue line in the middle. You are getting to see. This is a Simple Moving Average. Which is by default of 20 period. After this, the upper line that you are seeing. This is called the Upper Band. And the line that you see below. This is called the Lower Band. Which is basically the standard deviation. Of this particular Moving Average. That is, it is believed that the price can go so high. And it can come so low. Now if we understand simply. Then people believe that. If the price has come near the lower band. Then there are chances of the price increasing from here. And if the price has come near the upper band. Then there are chances of the price falling from here. But I have seen in my personal experience. That when the price has come near the lower band. Then it is not necessary that the price will increase from there. But when it comes to the lower band. Then it starts going up again. Then it should be believed that the price can increase. And in the same way. When the price goes to the upper band. Then it starts coming down again. Then you should believe. That the price can fall from here. Let me clear that. The indicator that is shown here. I am telling you that. But you don't have to take a trade on their basis. If you want to take a trade at any time. Along with this. You have to use other strategies too. Next indicator is volume. This tells us that at a particular time. How many buyers and sellers are available. In a particular stock. So if the volume is increasing somewhere. It means that there are more buyers and sellers here. Now I have talked about this indicator many times. And I have said that this indicator is used. For confirmation. The reason behind which is. Suppose something big is going to happen in the stock. So it is obvious there. That more people are trading in that stock. Or more quantity is being traded in it. So we will know that from the volume. As you can see. That the volume increased in the stock here. And after that the price has fallen rapidly. Now here we can clearly see. That the volume has increased. But if you want to know. Where the volume has actually increased. For this, you have to go to the volume settings. And here you have to go to style. And click on the volume moving average option. After that, you will see a blue line in the volume. So if the volume is above blue. Then you can assume that the volume has increased here. And if the volume is below blue. Then you can assume that. The average volume here has decreased. Here I will clear one thing for you. That if the volume is increasing. Then it does not mean that the price can increase from here. And if the volume is decreasing. Then it does not mean that the price can fall from here. The volume is only telling us. That the trading activity has increased here. So if the trading activity has increased. Then the market can increase or fall. So we have to use it for confirmation. Like suppose after doing your analysis. Here it seems that the market can fall from here. So by looking at the volume below. It can be confirmed that there are more chances. That the market will fall from here. And according to that you can take a decision. Before telling you the next indicator. If you want to get the best Demat account for trading or investment. Then I have given some good Demat account links in the description. Which I myself use. So do check the description. And from there do get your free Demat account. Now our next indicator is MACD. That is Moving Average Convergence Divergence. As soon as you apply this indicator. It gets plotted here on the chart. Now this indicator looks dangerous to you. But let me tell you that this is a very simple indicator. This indicator gives you many types of signals. And this indicator is made up of exponential moving average. The blue line in this is called MACD line. Which is the difference between the exponential moving average of 26th and 12th period. That is blue line is MACD line. The orange line that you can see here. This is called signal line. Which is basically the exponential moving average of 9th period. Apart from this, the bars that you can see here. This is called Histogram. And this histogram is the difference between MACD line and signal line. So where there is more difference between these two. There you will see bigger histograms. Where there is less difference between them. There you will see smaller histograms. So now let's understand what this indicator tells us. So the first thing you can understand by looking at the histogram. If the histogram is made upwards. And if they are big, then it means that the stock is bullish. If the histogram is made downwards. Then it means that the stock is bearish. Second, MACD signals us through crossovers. Whenever our MACD line cuts the signal line of this orange line downwards. Then it is assumed that the price can fall from here. You can see that the price has fallen. And whenever our MACD line cuts this orange line upwards. Then there are chances of the price to rise from there. You can see that the price has risen from here. Apart from this, the third way that MACD gives us confirmation. That gives through this baseline. The line that you can see in the middle here. This is a baseline. So whenever our MACD line and signal line. Cuts above the baseline. Then it is assumed that this is a buy signal. And whenever our both these lines come below the baseline. Then it is assumed that this is a sell signal. And there are chances of the price to fall from here. So this is how the MACD indicator works. If you like the video, then do like the video. And do subscribe to the channel. Now our next indicator is the super trend. This is the simplest indicator. Because it tells you very easily. Where you have to buy and where you have to sell. So if this super trend is visible above. That is, this line is above. Then it is assumed that the stock is bearish here. And as soon as it is above. Then you can assume that the price can fall here. And whenever you see that the super trend. Has come down from above and has become green. Then you can assume that there are chances of the price to rise from here. This is a very simple indicator. Which gives you a buy and sell signal easily. But this indicator only works well in the trending market. If the market is sideways. Then if you trade on the basis of this indicator. Then you will get to see a lot of fake signals. You don't have to use this indicator to trade alone. Always use it with the help of volume and other strategies. Next indicator is Parabolic SAR As soon as you put this indicator in the chart, you will see these dots in the chart This indicator is very simple because whenever you see these dots above the price then you can assume that the stock is in downtrend and whenever you see these dots below the price then you can assume that the stock is in uptrend With this indicator, you can find the trend of the chart Along with this, if you do trading then trailing stop loss is a very important concept With this indicator, you can set your trailing stop loss This indicator gives buy and sell signals very easily but if you trade only with this indicator then you will face a lot of loss With this indicator, you can find the trend and it can help you in your trading but you should not trade only with this indicator Before telling you about the next indicator if you want to know about the important trading tools then please comment below If you leave good comments, then we will make a video on this topic Next indicator is Pivot Point Standard This indicator tells you support and resistance in the chart As soon as you put this indicator here then you will find the chart very strange and it will be very difficult to understand First of all, you have to change some settings The settings that we are changing now you have to do the same changes in the settings As soon as you change the settings then it becomes very easy to see the chart Here you can see R1 This R1 is our first resistance Here you can see R2 This R2 is our second resistance Similarly, you can see S1 in the chart This is our first support and S2 is our second support Apart from this, you can see a line called P This is called a pivot line and it is believed that if the share price has opened below the pivot line then the price will remain below the pivot line and if the price has opened above the pivot line then the price will remain above the pivot line So if you find it difficult to find support and resistance in any chart then you can use this indicator If you don't know what support and resistance is then let me tell you that if the price goes to its resistance then it is believed that there are chances of the price falling As you can see here, the price went to its resistance and then the price slowly fell But if the price goes to its support like here the price has gone to support then it is believed that the trend can reverse from here and there are chances of the price increasing But it is also believed that if the price breaks its resistance like here it had its first resistance and the price broke this resistance then the price can increase very fast and if the price breaks its support downwards then the price can fall very fast from there So this is how support and resistance works Now our next indicator is VWAP that is Volume Weighted Average Price From its name, you can understand that this is actually the average price but here the volume is also given as weightage Now what is volume? I have already told you about it Volume is an indicator that tells us how much is being traded in that particular stock So here I will also put the volume indicator So you can see that the VWAP here VWAP tells the average price by giving the volume as weightage Now this VWAP might look like a Bollinger band But let me tell you that the VWAP line here is only a blue line that you have to go to the settings to change and the rest of the things that you can see here in its style, you have to remove them So from here you will remove the upper band and lower band So now the line that you are seeing this is our VWAP line So now the VWAP that we are using here this is a particular session VWAP It is a particular day VWAP If you want to do intraday trading then you should use the session VWAP But if you want to do swing trading then you can use the weekly VWAP and in this case, your VWAP will change completely So it is very important to change the VWAP according to the account you are trading So here I select the session VWAP again So now this is also very simple It is just telling you that if the price has gone above this VWAP then it means that the price will increase from here and if the price comes below this VWAP line then it means that the price will fall The reason behind this is that basically this VWAP line is an average price and the volume is also given as weightage So if the average price in which the volume is also given as weightage then the actual price is going up in the market So it means that the market is fast and now the market can increase more And if the price is coming below the average price in which the volume is also given as weightage then it means that the market is slow due to which the price has a chance of falling If you are liking the video till now then do like and subscribe to the channel Now our next indicator is ADX which is the Average Directional Index This indicator tells us the strength of the trend I have told you a lot of indicators that tell us whether there is an uptrend or a downtrend But how much strength is there in that trend? We get to know this from the ADX indicator A very simple rule is followed here If the ADX is less than 20 then it is assumed that the trend here is a weak trend and if you take a trade in this then you will not get a big movement and you can stay stuck in the market for a long time Whereas if the ADX is above 20 then it is assumed that the trend here whether it is an uptrend or a downtrend it is a very strong trend and if you take a trade in it then you can see big movements As you can see that the ADX here is below 20 and in this way, you can see the entire sideways market But as soon as our ADX went above 20 after that you got to see a big trend So by using the ADX indicator you can avoid a lot of fake trends and you can capture the strong trends Now our next indicator is the stochastic oscillator After using this indicator you will see that a pattern like RSI will be drawn in your chart So this indicator is also compared with RSI and it is assumed that this indicator is better than RSI This indicator moves in the range of 0 to 100 and three levels are very important here The first level is 50 The second level is 80 and the third level is 20 Here we see two types of lines One line is of blue color which is also called %K line and this is basically our stochastic line and the second is our %D line which is the orange color line and this is basically our simple moving average of 3 periods This indicator is also used like RSI and whenever these two lines go above 50 then it is assumed that the stock is bullish and whenever these two lines go below 50 then it is assumed that the stock is bearish and with this whenever these two lines go above 80 and after that they start going down then it is assumed that the stock is overbought and now there are chances of the price to fall and its opposite whenever the price goes below 20 and after that it starts going up then it is assumed that the stock is oversold and now there are chances of the price to rise The crossovers between these lines are also very important and whenever these two lines go above 80 and go down then it is assumed that the stock is overbought and now the price can fall and in the same way whenever these two lines go above 20 then it is assumed that the stock is oversold and now there are chances of the price to rise So this is how the stochastic indicator is used So here we have discussed all the important indicators I hope you liked the video If you liked the video then please like and subscribe to the channel The link of the free Demat account is given in the description And if you want to learn about 30 candlestick patterns in just 20 minutes then you can watch this video Thank you