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Start Trading In Share Market With Technical Indicator
When buying or selling any shares you need to do technical analysis. There are many indicators available for this. We will take complete information of all the indicators.
Today we are going to learn about RSI (RELATIVE STRENGTH INDEX) indicators here.
RSI is very useful when trading indicators. We can definitely increase our profits by studying some of the basics of these indicators.
Let’s see, the RSI indicator is the RSI indicator placed on the Nifty 50. This chart is placed on the 1 hour timeframe.
RSI tries to tell you 2 important things.
- Has the stock gone oversold?
- Is the stock overbrought?
What is the structure of RSI?
The RSI chart index ranges from 01 to 100.
In which if the index is below 30 then the stock is oversold.
And if the index is above 70, then the stock is overbrought.
How do RSI indicators work?
The default setting of RSI is 30-70.
If the stock is in the oversold zone, it is a buy signal for you.
And if the stock is in the overbrought zone, it will definitely be a sell signal for you.
In this we can try to get maximum accuracy by balancing observation and study.
The chart of any script should not be based on a single timeframe.
Always trade intraday with 1 minute-5 minutes and half an hour coordinating the time chart.
When trading in delivery, the chart should be traded with a balance of 1 day-1 week and 1 month.
Trading is very risky so new traders should avoid intraday trading at the beginning.
Connors RSI combines three factors on the basis of which we can make estimates for buying and selling stocks.
- The PM mainly provides RSI data on the movement of stock prices.
- Duration of Up / Down trade.This indicates that there has been a lot of buying and selling at a certain price.
- Relative Magnitude of Price change.
In this, RSI shows how much the previous price has changed compared to today.
This is one of the technical indicators in which STOCHASTC RSI plays a unique role in monitoring the market momentum and monitoring the overbrought and oversold market conditions.
StochaRSI differs from other technical indicators such as the Relative Strength Index (RSI) in that it moves faster on the Oversold than the Overbrought price compared to the RSI.
We hope you have found out about RSI Indicator.
We will now take a look at Bollinger Bands indicators, which can be used to make more profit in the stock market.
Structure of Bollinger Bands
Bollinger bands consist mainly of 3 lines.
- Upper Band: Standard Deviation.
- Middle Band: The moving average of the previous day.
- Lower Band: Standard Deviation.
Which is always changing on price volatility.
The default setting of Bollinger Bands is (20,2). There is no need to change this setting as in this setting you can adjust the trading using the correct timeframe.
How to use Bollinger Bands?
To understand the Bollinger band, for example, let us take a look at Tata Motors here.
- When volatility increases in the share price of Tata Motors, the size of the Upper and Lower Bands increases.
- When the volatility in the share price of Tata Motors remains the same, the upper and lower bands continue to merge. This can also be called Sideways Price Action.
- When the volatility in the share price of Tata Motors is very low, the upper and lower bands become smaller.
This gives you a signal that now is the right time to buy and sell in the market.
Use of Bollinger Band
Let us understand in simple language how to use bollinger band while trading.
- When the caddy touches the upper band, understand that it is now a bullish trend. Don’t buy then. But if a negative caddy pattern is formed, there is no problem in selling.
- Whenever the caddy touches the lower band, understand that there is a bearish trend now.
How to identify Support and Resistance Level?
Only by recognizing the level of support and resistance while trading can we bring accuracy in trading.
So let’s see how to identify support and resistance levels.
- If a Bullish Cadel touches the middle Bands and immediately after that the second or third Bullish Caddle moves to the Upper Band, then it is a Bullish Trend. In the language, a pattern of candlestick is formed in this shape, which we call as Dubble Top pattern.
- If a Bearish Cadel touches the Middle Bands and immediately touches the 2nd or 3rd Cadel Lower Band, it is a Bearish Trend. This is what we can call Successful Bearish Candlestick Pattern (Resistance). Character shaped candle patterns are formed. This is called Dubble Bottom Pattern.
How to choose a stop loss?
- If you take stock in Bullish Trend from where M pattern is formed or from where Bullish trend started, choose its Low Price as Stop Loss.
- If you take stock in Bearish Trend from which W pattern (English letter) is formed or Bearish Trend is started, its Low Price should be chosen as Stop Loss.
Important : Before trading on this pattern, it is important to look at the level of RSI.
Also different timeframe is equally important for each trading.
|Intraday||Short Term||Long Term|
|5 minutes||15 minutes||1 week|
|10 minutes||30 minutes||1 month|
|Half an hour||1 hour|
We hope you enjoy the Bollinger Bands Indicator.If you have any questions about this, please let us know in the comments.
MACD is one of the most useful indicators when trading.
Let’s look at the MACD indicator.
Invented by Gerald Appel in 1979. Stock market, futures market, commodity market, forex market are useful everywhere.
What Is MACD?
MACD (Moving average convergence divergence)
This is a trend indicator, so this indicator shows trends with accuracy like moving average and supertrend indicators.It is very easy to use.MACD indicator shows you trends by combining two EMA indicators.
EMA (Exponential Moving Average)
Structure of MACD
The MACD indicator consists mainly of 4 things.
MACD LINE (Fast Line)
This line has a 12 day and 26 day EMA (Cadlastic) Ratio.
SIGNAL LINE (Slow Line)
Indicates the 9 day (9 cadastral) ratio of MACD.
ZERO LINE (Base Line or Center Line)
The difference between MACD line and SIGNAL line is shown by ZERO LINE.
It works just like volume indicators.
This is the default setting of MACD (12,26,09). There is no need to change it as this is the default setting that works properly.
How does MACD work?
Changes in the MACD indicator and the signal line in the MACD indicator give you buy and sell signals. There are two types of crossovers.
Positive crossover (bullish)
When the signal line crossovers the macd line upwards, it is called a positive crossover. Then we get a buy signal.
Negative crossover (bearish)
When the signal line crossovers to the lower side of the macd line, the negative crossovers. Then we get the sell signal.
Share Market Some important
MACD Double Top
It’s not about price changes, it’s just about the double top of indicators.
When the MACD line is at the top of the double top zero line, the probability of a recession is higher. Also, if the MACD line is double top at the bottom of the zero line, there is a bullish trend.
It acts as a volume. The histogram shows positive and negative changes. It accurately shows trend and momentum.
How can i Buying & selling?
When there is a positive crossover in MACD, buy on its next cadastric. Sell when a negative cadastric pattern is formed.
Hopefully, you have got detailed information about MACD indicator. If you have any questions about this, you can ask in the comments.
Also I hope to you get some basic information about the share market.
Further Reading : Share Market No.1 Opportunity To Build Money – Part 1