INDICATORS
Technical indicators are fundamental tools for any successful trading operation, serving primarily as indispensable guides for market analysis and decision-making. They are mathematical calculations based on historical price, volume, or open interest data, designed to forecast future price movements.
Their core function is two-fold: first, they quantify market dynamics by helping traders confirm trends, identify momentum shifts, and measure volatility (e.g., using Moving Averages or Bollinger Bands). Second, and most critically, they generate actionable trading signals, allowing traders to pinpoint optimal entry and exit points for positions by identifying potential overbought or oversold conditions. Essentially, indicators transform raw market data into structured, predictive intelligence, mitigating emotional bias in investment decisions.
DISCOVER
RSI (Relative Strength Index)
The RSI is a momentum oscillator that measures the speed and change of price movements to evaluate whether an asset is overbought or oversold. Readings above 70 and below 30 are commonly used to signal extreme market conditions and anticipate potential trend reversals.
MA (Moving Average)
A Moving Average is a trend-following indicator that smooths out price action over a specified period by calculating a constantly updated average price. It primarily serves to confirm the direction of a trend and identify dynamic support or resistance levels.
MACD (Moving Average Convergence Divergence)
MACD is a momentum indicator that reveals the relationship between two Exponential Moving Averages (EMAs) of an asset. It is used to identify the strength, direction, and duration of a trend, generating buy or sell signals when the MACD line crosses its signal line.
BBand (Bollinger Bands)
Bollinger Bands measure market volatility, consisting of a central Moving Average (MA) and two standard deviation bands above and below it. Widening bands indicate high volatility, while narrowing bands signal a period of consolidation.
Open Interest
Open Interest represents the total number of outstanding derivative contracts (futures or options) that have not yet been settled or delivered. A simultaneous increase in price and Open Interest is often interpreted as strong conviction in the current trend.
Vol (Volume)
Volume measures the total quantity of a financial asset traded over a given period and is a key indicator of market liquidity and conviction. A significant price movement accompanied by high volume is considered more meaningful and sustainable than a low-volume move.
EMA (Exponential Moving Average)
The EMA is a type of Moving Average that gives more weight to recent price data, making it more responsive to price changes than the Simple Moving Average (SMA). It is commonly used for short-term trend determination and signal generation.
Ichimoku (Kinko Hyo)
Ichimoku is a comprehensive indicator that uses five lines to provide a holistic view of trend, momentum, support, and resistance. Its « cloud » (Kumo) is a central element used to confirm trend direction and identify areas of strong volatility or consolidation.
F&G Index (Fear & Greed Index)
The Fear & Greed Index measures the emotions influencing investment decisions, based on seven different market indicators. It is used as a contrarian indicator, potentially signaling buying opportunities when fear is extreme, and selling risks when greed is dominant.
Volatility Index (VIX)
The VIX, often called the « fear index, » measures the market’s expectation of future volatility over the next 30 days, derived from S&P 500 index option prices. A sharp rise in the VIX indicates increasing market anxiety or uncertainty, and is often associated with price declines.