So if there was just one indicator you could recommend, which one would it be, and why?
I know there's no such thing as a silver bullet, but I'm looking for a place to start learning. Thank you for your feedback.
I know there's no such thing as a silver bullet, but I'm looking for a place to start learning. Thank you for your feedback.
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2 comments
Hi @yellowsub2, I don't think it would be sensible to narrow this down to just one indicator, because one indicator by itself won't give you the full pictures.
Most traders swear by certain indicators like Moving Averages, Bollinger Bands, and the Relative Strength Index (RSI).
Moving Averages smooth prices, and help plot a trend. This could be an uptrend, or a downtrend.
Bollinger Bands give you a feel for how extended a price is from its central tendency
The Relative Strength Index identifies 'over-bought' or 'over-'sold' conditions.
Together, these indicators an help you identify entry and exit points.
If I had to pick one, I'd choose Bollinger Bands. They help me confirm whether a given instrument is in an uptrend, or a downtrend. For example, when prices push higher, and tend to hover 2 or even 3 standard deviations away from their mean, this tells we're in an uptrend. And this is the kind of market I want to buy on pullbacks.
I'm less keen about the RSI, because it can stay 'over-bought' for extended periods of time in a bull market, and make you miss out of most of an uptrend.