1. EMA

EMA - Exponential Moving Average is one of the most popular indicators in the trading world. The biggest role of the EMA is to help traders see the trend.

Another effective use of EMAs is to combine with other periodic EMAs to recognize trend changes, strength and resistance, and dynamic support.

A lot of traders trade on a cross of 2 EMAs but this way of trading can cause you to stop loss continuously if you encounter a chart like an image below:


There is no best EMA cycle, you have to watch how you trade to choose the right EMA.

2. Stochastic

The Stochastic is a popular momentum indicator used to identify overbought or oversold signals in a market.

As the picture below shows, the market is overbought when Stoch goes above 80 and oversold when it goes below 20:


Many traders enter the trade when Stoch crosses the 80 and 20 levels. As shown below:


However, the above approach may work in a sideways market, but in a trending market, it is not.

In addition, Stoch is also used to identify the divergence signals to determine the time of trend reversal.

3. Bollinger Bands

BB is an indicator that helps traders determine market volatility. A contraction in BB indicates low market volatility, while an expansion of the BB indicates high market volatility.

Many traders sell when the price hits the upper band of BB or buy when the price hits the lower band of BB. As shown below:


When BB contracts for a period of time, often the subsequent price action can cause the market to be most volatile, especially when news comes.

4. Momentum

The Momentum indicator is an indicator that helps traders determine the momentum of a trend.

When the indicator is above the zero lines, it shows that the uptrend's momentum is strengthening, and vice versa, if the indicator is below the zero lines, the downtrend momentum is strengthening.

5. Donchian Channel

The Donchian Channel is similar to the Bollinger Bands, however, the difference is that the Donchian Channel relies on the top and bottom of the market for a specified period of time.

For example, if you choose the 20 cycles Donchian Channel setting, then the indicator will show the low top of the previous 20 candles. As shown below:


A common use is if the market moves above the upper band, it is a buy signal and vice versa, if the market moves below the lower band, it is a sell signal.

6. ATR

ATR - Average True Range is an indicator that provides the level of price volatility of the market over a period of time.

The default setting is 14. cycle. It means the indicator measures price movements in 14 candles.

For example, if the ATR shows 50 on the H1 frame of a currency pair. This means that over the past 14 hours the currency pair moved an average of 50 pips.

The ATR is an effective indicator for traders in placing stop losses. The trader will rely on the price volatility that ATR provides to set a stop loss to avoid the volatility of the pair.

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