Technical Analysis Tools for Successful Traders

You can hardly succeed in trading by predicting market moves on your own. Success highly depends on choices made based on specific rules delivered by your strategies. Most traders use technical analysis tools to develop winning strategies.

Technical analysis tools help traders determine whether a stock is cheap or expensive. With accurate information, they quickly make profitable moves. Visit tradingbeasts.com and see what it takes to become an elite trader.

5 Technical Analysis Tools for Successful Traders

There are many technical analysis tools in the market. Choosing the most useful might be overwhelming. Check the list below.

Volume Indicator 1

Volume is the amount of shares trading within a specified period. The period may range from a month, a week, a day to an hour. Volume indicators highlight the strength of a downward or upward price move.

High volumes show the start of a new trend in the stock. Conversely, low volumes signal market bottoms or stagnant prices within a trading range or sideways move. 

If a stock moves upwards, its volume on the upward moves should be high and less on the downward moves. On the other hand, less volume on the upward side and high volume on the downward side indicate a downturn. 

With the help of an efficient volume indicator, you will mark the best areas to trade.

Aroon Indicator 

The Aroon indicator pinpoints the trend’s strength and continuity. Traders search for a move below or above zero to ascertain whether a new trend will appear.

Crosses below zero and above zero indicate a downward trend and upward trend respectively. The upward trend is the “Aroon up” while the downward trend is the “Aroon down.”

Any signal on the zero lines without any movements means that the stock will consolidate for some time. The Aroon indicator helps traders uncover emerging trends. In the long run, traders gain profit and avoid losses. 

Simple Moving Average

The SMA is used to give resistance and support areas. It gives a daily average of the last 200-days, 50-days, 20-days or a period of your choice.  The crosses are indicators to sell, cover, or buy stocks. 

There are varieties of moving averages. The simple moving average, however, provides adequate information for traders.

An SMA can be used alongside other indicators to provide perfect results. Don’t forget that some indicators rely on similar information and thus generate similar results. 

Autochartist

This tool is perfect if you want to understand patterns better.  Its main advantage is that it is a web application. You can access it through your browser without downloading or installing.

Understanding and recognizing technical patterns like a rising wedge, flag, head and shoulders, false flags, among others, is not easy. Autochartist will do the work for you. It recognizes technical patterns automatically.

The tool scans charts and signals when identified patterns. It is a quick way to understand patterns, their meanings, and save time. 

Forex Volatility Tool

This tool shows the movement of a currency pair. For instance, it can show you the average daily movement for the last 30 days. It indicates the currency pair movement per hour, its volatility on a specific day and volatility change over time. 

Generally, the volatility tool gives you a clue on what to expect on a particular day or time. You can use the information to assess whether a trade will gain or lose. It, however, can’t tell the direction the price will follow. 

Bottom Line

You can use more than one technical analysis tool to make more informed and better trading decisions. Review the tools and pick those that suit you best. Don’t discount your trading experience when using these tools. 

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Jesse Fin
 

Jesse worked as a journalist for a large tv station in Korea in her past life. She now works full time at home as a blogger and loves to help her friends manage their personal budgets.

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