Chapter 11
Using Indicators to Facilitate Chart Analysis
IN THIS CHAPTER
Starting with the fundamentals of indicators
Looking at momentum indicators
Working with volume indicators
Deciding how many indicators to use simultaneously
Early on in the development of technical analysis, chartists tried to find methods to gauge the strength of a trend as well as find reversals. The answer came in the form of indicators, and StockCharts.com has 50 different indicators that technicians can choose from. In this chapter, we explore some of the key indicators for those just starting to learn the world of charting. The main types of indicators are as follows:
- Momentum indicators
- Buying and selling pressure indicators using volume
- Leading indicators for executing trades (we discuss these types of relative strength indicators in Chapter 12)
Beginning with Indicator Basics
Indicators derived from movements in price are lagging when the price move has already happened. That doesn’t make them ...
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