INDICATORS
What are indicators;
Indicator are tools used to forecast future prices.
it helps in determining where the market prices might be headed.

Here are list of some major and popular indicators you can work with, I’ll be explaining them one after the other and also telling you how you can trade with them
1. Moving average[EMA (Exponential moving average) and SMA(simple moving average)]
2. RSI(Relative strength index)
4. Stochastic
5. Bollinger band
6. MACD
7.ADX( Average directional index)
8. Parabolic Star

You have to also know that despite these indicators proving to be very profitable, they are not 100% accurate, that’s why you have risk management that would be discussed later in this class

With practice, you’ll be able to further understand how your indicators work and be more profitable with it

We’ll go on to a first indicator now which is the RSI
We’ll start with the RSI

*R.S.I (RELATIVE STRENGTH INDEX)*
The R.S.I is a popular indicator used by a lot of traders, it’s very straight forward.
It is used to identify reversal points in the market.

How it works;
The R.S.I is scaled from 0 to 100 from bottom to top. When the R.S.I line crosses above the 70 mark
towards 100, it indicates overbought(the market has been buying, and there are not enough bulls in the market anymore, and the market is set to reverse). when it crosses below the 30 mark towards 0, it
Indicates over sold (the market has been selling, and there are not enough bears in the market anymore, and the market is set to reverse).

How to trade with the R.S.I
When the R.S.I line crosses the 70 mark towards 100 it shows a sell opportunity, and when it crosses the
30 mark towards 0, it shows a buy opportunity

You buy at point 1 becauased the market has over sold and the buyers are about to take control

Then you sell at point 2 because the market has over bought which indicates the seller about to take control of the market

Bollinger band
Bollinger band is used to measure market volatility.

How it works;
The bollinger band expands when there is high volatility and contracts(closes up) when there is low volatility in the market.
Looking at the diagram below, we can see that the bollinger band closes for some time and then expands.

The bollinger band has uses such as;

•The bollinger band can used to detect early move in the market.
Looking at the diagram, you’ll notice that a candle broke above, you’ll also notice an expansion in the
bands, as the band expands it indicates potential trend change. with this, you can be able to tell the direction of the trend on time.

•The bollinger band can also be used as support and resistance
The upper band can be used as resistant line and the bottom line can be used as support.

1: support
2: resistance

Further explaining how It can be used to identify new trend, looking at the diagram below, you can see that the breakout and expansion of the band helped in identifying a new trend after ranging for a while.

So basically the bands expands when there is a potential change in trend

How to trade the bollinger band

1. In a ranging market
Using the band as support and resistance;
when a candle gets to the top line, you sell.
When the candle touches the buttom line, it is time to buy.

Buy at 1
Sell at 2

2. In identifying new trend
when a candle breaks *above* the band and the band expands, it means that it is time to buy as it forms a new trend, when a candle breaks *below* the band and the band expands, it means that it is time to sell as it forms a new trend.

The diagram above shows a downtrend after a break below

If you had entered at the break you would have caught some pips