Using the indicator for analysis and trading has long been popular among us traders. Many trading strategies are formed by combining technical indicators together.

Most traders when approaching trading start from using technical indicators. But over time, traders will feel confused because there are too many indicators and do not know which indicator to use effectively.

Although there are many indicators in the technical analysis world, it is better to choose only the popular ones, which are used by many traders for analysis. And here are the top 9 famous indicators in the trading world that traders should know.

1. Moving Average (MA)

The MA is already too famous in the trading world. This is an indicator that helps traders identify trends and trend changes. The indicator represents the average closing price of the previous n trading sessions.

The 2 most used moving averages are SMA and EMA. MAs with large periods such as MA 100, 200 are mostly used to identify long-term trends. In addition, moving averages are also used as dynamic support and resistance in the trend. If the price retraces there, the trader can look for an opportunity to enter the trade.


2. MACD

This is a very powerful indicator used to identify trends. This indicator consists of 2 lines and MACD Histogram. When the 2 lines above the MACD separate, it shows a divergence signal, indicating that the market is in a strong trend. When the two lines intersect, the MACD will return to zero, indicating that the market is about to change the trend from up to down or from down to up.

The figure below shows that the MACD has given a very good bullish or bearish signal:


3. RSI

This is an indicator developed by Welles Wiler in 1978 but it is still the most trusted indicator by traders to this day. The RSI measures the recent price movement expressed from 0 to 100. This indicator is mainly used to identify overbought and oversold market conditions. If it is above 70, the market is in overbought conditions, and vice versa, below 30, the market is in oversold conditions.

RSI works better in a sideways market. If you use this indicator to trade with the trend, it needs to be combined with other indicators to confirm the trading signal.


4. Bollinger Bands (BB)

Bollinger Bands is an indicator to measure the current price movement of the market. The indicator consists of 3 lines, the middle line is the SMA line, the upper and lower lines have a standard deviation of 2 from the middle line.

The standard deviation is a measure of the market's price volatility. If the market is volatile, BB will expand. If the market volatility is weak, the BB will narrow.


5. CCI

The CCI indicator was developed in 1980 by Donald Lambert. This indicator is mostly (above 75%) in the range of -100 to +100. Breaking out of this range indicates a market with extremely strong price changes in the average price.

6. Fibonacci

Fibonacci is one of the tools used by many technical traders because of its effectiveness. Especially price action traders.

In Fibonacci, 61.8 is considered the golden ratio and is also stopped in trading as a level to determine the end of retracements. There are also other levels like 38.2 and 50.

The levels above the Fibonacci are also seen as dynamic support and resistance levels that are combined with other resistance levels to determine the confluence support-resistance area.


7. Stochastic

Stochastic is an oscillator mainly used to identify overbought and oversold market signals. If the indicator crosses the 80 level, it shows that the market is in oversold condition. If below 20, the market is in overbought state.

Similar to RSI, Stochastic should also be combined with another indicator for more confirmation for a trade setup.

8. ADX

ADX is an indicator that measures trend strength. It shows whether the current trend of the market (up or down) is strong or weak. This indicator has 3 lines, ADX, -DI, ​​+DI. If +DI crosses above –DI, the market is entering an uptrend and vice versa.

The ADX is used to determine the strength of the trend. An ADX between 25 and 50 is considered a strong trend and above 50 is considered very strong.

This is a powerful indicator used by many traders to trade trending markets. At the same time combined with oscillators is also very good to limit signals much. For example in combination with RSI or Stochastic.

9. ATR

ATR is an indicator that measures the price movement of the market. Shows the average price movement over a certain period of time. This is a very powerful indicator used to calculate stop loss as well as profit target for a trading strategy.