Top Indicators Every Trader Should Know

Indicators are tools for organising price information, not crystal balls. Knowing what each one measures — and where it fails — matters more than memorising settings.

Moving averages

Moving averages smooth price to show the prevailing trend. They lag by design, so they work best for confirming trends rather than predicting turns.

Relative Strength Index (RSI)

RSI measures the speed of recent price changes. Readings above 70 or below 30 suggest stretched conditions, but in strong trends RSI can stay stretched for long periods.

MACD

MACD tracks the relationship between two moving averages and helps identify shifts in momentum. Crossovers are more meaningful when they align with the higher-timeframe trend.

Volume

Volume shows conviction. Breakouts on rising volume are generally more reliable than those on thin participation.

Open interest

In derivatives, changes in open interest alongside price help distinguish fresh positions from short covering or long unwinding.

This article is educational and is not a recommendation to buy or sell any security.