If I was limited to a handful of technical analysis indicators/techniques, which ones could I not live without?
Over a few years, Iíve tested out a lot of different indicators and even though each has pros and cons, Iíve found myself drifting back to needing the following:
To follow a trend
- MACD (Moving Average Convergence/Divergence)
- Slow stochastic oscillator
- Bollinger Bands
- Triple exponential moving average (EMA) - my personal favourite combination being a 9/100/200 period - for support and resistance, and Elliott Wave progression
- Coppock Curve
- Buy/Sell ratio
- Ichimoku Kinko Hyo
To gauge potential tops and bottoms, divergence signals (Bullish or Bearish)
- Relative Strength Index (RSI)
- Money flow
- Ultimate oscillator
- De-trended price oscillator
Exits and entries
- Pivot points; particularly the second support (S2 - for entry) and second resistance (R2 - for exit) levels. Though in reality, if I happen to be in profit and the price is moving fairly rapidly, Ďpancitementí (think panic crossed with excitement) often takes over with respect to exit!
Everyone is different, so people will use what they find comfortable for their own investing goals. It is generally expected to never rely on just one indicator.
Many investors also like to use Fibonacci Levels. I avoid these because I find them highly subjective and dependent on where the initial level is placed, and I seem to do just fine without them.
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