This summary covers all major technical indicators. Use it as a quick reference for understanding, selecting, and applying indicators in your trading.
Indicator Categories
Trend Indicators
Purpose: Identify direction
Key Indicators:
- Moving Averages (SMA, EMA)
- MACD
- ADX
- Ichimoku Cloud
Momentum Indicators
Purpose: Measure speed/strength
Key Indicators:
- RSI
- Stochastic
- CCI
- Williams %R
- Momentum/ROC
Volatility Indicators
Purpose: Measure price range
Key Indicators:
- Bollinger Bands
- ATR
- Keltner Channels
Volume Indicators
Purpose: Measure participation
Key Indicators:
- OBV
- Money Flow Index
- Volume Profile
- A/D Line
Quick Reference: Trend Indicators
Moving Averages
| Type | Best For | Speed |
|---|---|---|
| SMA | Support/resistance | Slower |
| EMA | Short-term trading | Faster |
Key Periods: 20, 50, 200
Signals: Crossovers, price crosses, slope
MACD
Default: 12, 26, 9
Signals:
- Signal line crossover
- Zero line crossover
- Divergences
ADX
Default: 14
Levels:
- < 20: Weak/no trend
- 20-25: Developing
- > 25: Strong trend
Ichimoku
Components: Tenkan, Kijun, Cloud, Chikou
Signals:
- Price vs Cloud
- TK Cross
- Cloud twist
Quick Reference: Momentum Indicators
RSI
Default: 14
Levels:
- > 70: Overbought
- < 30: Oversold
Signals: Zone exits, divergences, centerline
Stochastic
Default: 14, 3, 3
Levels:
- > 80: Overbought
- < 20: Oversold
Signals: %K/%D crossover, zone exits
CCI
Default: 20
Levels:
- > +100: Overbought
- < -100: Oversold
Signals: Level crosses, divergences
Quick Reference: Volatility Indicators
Bollinger Bands
Default: 20, 2
Signals:
- Band squeeze (low volatility)
- Band expansion (high volatility)
- Band walks (strong trend)
ATR
Default: 14
Uses:
- Stop loss placement (1-3 × ATR)
- Position sizing
- Volatility filtering
Quick Reference: Volume Indicators
OBV
Type: Cumulative
Signals:
- Direction confirms price
- Divergence warns
MFI
Default: 14
Levels:
- > 80: Overbought
- < 20: Oversold
Indicator Selection Guide
For Trend Trading
Primary:
- Moving Average (50 or 200)
- ADX for confirmation
Entry:
- RSI pullbacks
- MACD crossovers
For Range Trading
Primary:
- Bollinger Bands
- Support/resistance
Entry:
- RSI overbought/oversold
- Stochastic crossovers
For Breakout Trading
Primary:
- Bollinger Band squeeze
- ADX < 20 then rising
Confirmation:
- Volume increase
- ATR expansion
Effective Combinations
Combination 1
Trend + Momentum:
- 50 SMA + RSI
- Trade RSI signals with SMA trend
Combination 2
Trend + Volatility:
- MACD + Bollinger Bands
- MACD direction, Bands for entries
Combination 3
Momentum + Volume:
- RSI + OBV
- Double confirmation
Signal Types
Crossovers
| Indicator | Crossover Type |
|---|---|
| MA | Price cross, MA cross |
| MACD | Signal line, zero line |
| Stochastic | %K/%D |
Divergences
| Type | Price | Indicator | Meaning |
|---|---|---|---|
| Bullish | Lower low | Higher low | Potential up |
| Bearish | Higher high | Lower high | Potential down |
Overbought/Oversold
| Indicator | OB Level | OS Level |
|---|---|---|
| RSI | 70 | 30 |
| Stochastic | 80 | 20 |
| CCI | +100 | -100 |
| Williams %R | -20 | -80 |
Common Settings
Standard Defaults
| Indicator | Default |
|---|---|
| SMA/EMA | 20 |
| RSI | 14 |
| Stochastic | 14, 3, 3 |
| MACD | 12, 26, 9 |
| Bollinger | 20, 2 |
| ATR | 14 |
| ADX | 14 |
| CCI | 20 |
Best Practices
Do
- Use 2-3 indicators maximum
- Choose from different categories
- Understand what each measures
- Define clear rules
- Price action first
- Context matters
- Test before trading
Don't
- Overload chart
- Use redundant indicators
- Seek holy grail
- Ignore price
- Trade against trend
- Change systems constantly
- Trade every signal
Indicator Checklist
Before Trading
- [ ] Trend direction identified
- [ ] Appropriate indicators selected
- [ ] Signals properly interpreted
- [ ] Context considered
- [ ] Confirmation present
- [ ] Stop loss defined
- [ ] Rules clear
Market Condition Guide
Trending Markets
Use:
- Moving averages
- MACD
- ADX
Avoid:
- Mean reversion strategies
- Fading overbought/oversold
Ranging Markets
Use:
- RSI
- Stochastic
- Bollinger Bands
Avoid:
- Trend following
- MA crossovers
Volatile Markets
Use:
- ATR for stops
- Wider parameters
- Fewer trades
Low Volatility
Watch For:
- Bollinger squeeze
- Breakout potential
- ADX rising
Key Takeaways
- Four indicator categories: trend, momentum, volatility, volume
- Each category provides different information
- 2-3 indicators maximum
- Price action always primary
- Match indicators to market conditions
- Understand signal meaning
- Combine complementary indicators
- Consistent application is key
Technical Analysis Progress
Completed:
- TA Basics
- Chart Patterns
- Technical Indicators
Next:
- Advanced TA
This article is for educational purposes only and does not constitute financial advice.
Risk warning. This is education only, not financial, investment, tax or legal advice, and not a recommendation to buy or sell anything. Trading forex, CFDs, stocks, commodities, futures, options and crypto is high-risk; with leverage you can lose more than you deposit, and most retail traders lose money. Before you trade or invest in any form, check the local laws where you are and the rules of your country of residence, and consider your own financial situation; if in doubt, ask a licensed adviser. Past and tested results, and all examples, are for illustration only and do not guarantee future results.