These questions are most frequestly asked >>
Which techniques is best for trading ? is it price action trading or indicator trading ?
Well, there is no simple answer for this complex question. Many people do price acton trading and many go with indicator trading. So there is no good
or bad technique. But if you ask me, I will say that yes , I am comfortable with price action trading.
(But don’t get me wrong. I haven’t tell that indicator is not good.)
Regarding indicator, which indicator is best ?
To answer this question 1st we have to know types of indicators.
1) Trend indicators
4) Bill williams.
Out of these four, the 1st two types of indicators are widely used. So we will discuss about the trend indicators and oscillators.
Trend indicators :
These are the indicators that follow the price chart. So it means they always placed within the price chart. Some example of trend indicators
are Moving average, Bollinger bands, Ichimoku kinko hyo. Look at the picture below for clarifications:
Oscillators are those moves between two extreme lines and bounded by that two extreme lines. These indicators do not lie in the chart , they are placed below the chart. Common examples are RSI, stochastic oscillator, MACD. Have a look to the picture below:
In the picture we can see that The RSI indicator is ranging between 70 and 30 .
Now come to the answer of our question. A single indicator is not that much reliable. There is higher chance to lose. So what can we do to increase our chance? We can use both two indicators for confirmation. I am showing a picture of this. have a look:
So , in the chart above we can see that we have used both the indicators here. So if you get from both the indicators to trade it will increase your chance to win the trade !