Stock trading is a very challenging profession. Those who have extensive knowledge about this market, often mess things up and fail to do the proper data analysis in a systematic way. If you want to protect your capital, you should be able to find false trade signals in the market. Things will be really tough at the initial stage but once you become good at analyzing the critical data in the market, you will become confident with your actions. To evaluate the critical variables, you must learn to use the advanced indicators in the market.
In this article, we will discuss the top four indicators used by professional traders. Learn to use this indicator as it will significantly improve your trade execution process and let you trade in a very structured way.
- Stochastic indicator
The stochastic indicator is a very popular oscillator used by professional traders in the market. By using the stochastic indicator, a trader can easily find the overbought and oversold state of an asset. If the reading of the stochastic indicator is above the 80 levels, you may consider the market is in an overbought state. In such a situation, you should be looking for the sell signal. On the contrary, if you spot the stochastic indicator below the 20 levels, you should be looking for the buying signal as the market is in an oversold state.
Never think you know every bit of detail while using the stochastic indicator. Try to learn the use of the stochastic indicator in the demo trading account and boost your skills. Once you become good at this, you should be able to earn a decent amount of money.
- Moving average
Professional traders at Saxo Bank Dubai always encourage the rookie traders to learn the use of the moving average in the demo account. If you manage to master the use of the moving average, you should be able to make significant progress in your life. Never think that you can earn a big amount of profit without doing the proper data analysis. Take your time and learn to evaluate the critical variables of the market in a standard way. Once you become good at using the moving average, you should be able to make decent progress and this will definitely allow you to earn consistent profit in the market.
While using the moving average, try to focus on the higher time period. If you do so, you will be able to focus on the quality trade signals. Test different period moving averages and see which works best for your trading business.
- Bollinger band
The Bollinger band indicator is widely used to find reliable support and resistance levels in the market. If you want to become good at trading, you must learn to use the Bollinger band in a higher time frame. Never think you can evaluate the critical market dynamics in the lower time frame. In a lower time frame, the trade signals are not that accurate and this will create a massive problem for your trading business. While using the Bollinger band indicator, try to use the price action confirmation signals. If you take the trades with the help of the price action confirmation signals, you should be able to earn more money and thus the overall trade execution process will become much easier.
- Zigzag indicator
Some of the retail traders often think that using the zigzag indicator is not a great way to find the endpoint of the retracement. But if use it in a higher time frame, you should be able to find reliable trade signals with a high level of accuracy. Never think you can become a profitable trader based on the zigzag indicator only. Try to use this indicator with the Fibonacci retracement tools as it will improve your decision-making ability and let you trade this market with strong confidence. If required, you may ask for a guideline from professional traders.