Trading Indicators: What you need to know

June 22, 2021

Are you ready to start trading seriously and want to keep an eye on how the market is performing, can use it to try and predict future movements or just analyze price movement patterns of a trader? asset. However, getting started can be harder than expected. All the different names can be confusing, not to mention you need a basic understanding of market movements to stay in touch with new developments.

Lucky for you, we've developed a brief but helpful guide to what indicators are, the most popular ones and all you need to know. Looking for a place to deploy all that new knowledge? Try PrimeXBT trading , a derivatives trading platform that can fulfill all your trading needs.

Technical Indicator: One liner

Trading indicators, or more specifically known as technical indicators, are signals generated by price, volume, and open interest in an asset. Users who follow technical analysis will closely monitor these signals and their patterns to predict future price movements. It's by no means an exact science, but it should help you make an informed choice.

There are quite a few indicators, but here are the ones you should know about:

Moving Average: this indicator shows the direction the price moves without taking into account short-term price rallies and is usually done over a few months.

Exponential Moving Average: puts more weight on recent price points, making it more receptive to new information.

Random Oscillator: compares a specific closing price to an asset's price range over time to show momentum and trend strength.

Bollinger Bands: provide a range in which the price of an asset typically trades — the narrower the bands, the lower the price volatility of the asset.

Fibonacci retracement: this indicator can determine the extent to which the market will move relative to its current trend — a retracement also known as a pullback or temporary drop.

Standard Deviation: helps traders figure out the size of price moves to estimate how volatility affects price movements.

Moving Average Convergence Divergence (MACD): combines two moving averages to detect changes in momentum.

Of course, this is a complete list. You'll probably never need any other metrics than those listed, or maybe you'll find your favorite among those not covered here. However, it's important to note that you can't just use one indicator and expect safe results - but you shouldn't use too much either as it can lead to incredible confusion (not to mention to potential headaches).

When it comes to cryptocurrencies, making the right transaction at the right time can be difficult with all the confirmation times. This is why derivatives trading is the most popular choice for those who watch the markets carefully, as they allow much more flexibility with the same efficiency. As the platform with the widest asset spreads - besides cryptocurrencies you can also find indices and commodities here - PrimeXBT trade is almost certainly the perfect choice to start your trading based on on technical analysis.

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