- What: Use two moving averages — one short-term (like 9-day EMA) and one long-term (like 21-day EMA).
- Why: Helps identify when trends are starting or reversing.
- How:
- Buy signal: When short-term MA crosses above long-term MA ("Golden Cross").
- Sell signal: When short-term MA crosses below long-term MA ("Death Cross").
- What: RSI (Relative Strength Index) measures how "overbought" or "oversold" a stock is.
- Why: Helps time reversals — when a trend might change direction.
- How:
- Buy when RSI < 30 (oversold).
- Sell when RSI > 70 (overbought).
- What: MACD (Moving Average Convergence Divergence) shows momentum and trend direction.
- Why: Catches strong trend moves early.
- How:
- Buy signal: When MACD line crosses above the Signal line.
- Sell signal: When MACD line crosses below the Signal line.
- What: Bollinger Bands are dynamic bands plotted 2 standard deviations away from a moving average.
- Why: Helps identify volatility expansions (big moves starting).
- How:
- Buy if price breaks above the upper band with high volume.
- Sell if price breaks below the lower band with high volume.
- What: VWAP (Volume Weighted Average Price) tells you the average price weighted by volume.
- Why: Institutions often buy/sell near VWAP — a key level.
- How:
- Buy if price is below VWAP and starts moving back up.
- Sell if price is above VWAP and starts moving back down.
- What: A momentum indicator comparing a stock’s closing price to its price range over time.
- Why: Helps find pullbacks in strong trends.
- How:
- Buy when the %K line crosses above the %D line below 20.
- Sell when the %K line crosses below the %D line above 80.
- What: Horizontal levels where the price often bounces or reverses.
- Why: Breakouts can lead to big moves.
- How:
- Buy when price breaks above resistance with high volume.
- Sell when price breaks below support with high volume.
- What: Fibonacci retracement levels (23.6%, 38.2%, 50%, 61.8%) suggest where a trend might pull back before continuing.
- Why: Helps predict healthy pullbacks.
- How:
- Buy near the 38.2%-61.8% retracement zone in an uptrend.
- Sell near the same retracement zone in a downtrend.
- What: ATR (Average True Range) measures the stock’s volatility.
- Why: Helps set dynamic stop losses and find high-volatility trades.
- How:
- Look for price to move 1.5x ATR above recent highs for breakout buys.
- Set stop loss using ATR multiples (e.g., 1x ATR below entry).
- What: Parabolic SAR dots appear above or below price to signal trend direction.
- Why: Easy visual way to spot trend shifts.
- How:
- Buy when dots switch from above to below price.
- Sell when dots switch from below to above price.
