The Most Important Indicator Of All

{The most crucial|The main} Indicator Of All

Fx {Signals|Indications|Symptoms}

{Many|Just about all} traders have a favorite technical indicator. The {the one that|the one which} they have the most confidence in. {The one which|One that|One which}, from experience, they trust the most. Or the {the one that|the one which} they always look at first. For some it is the RSI. Other folks like the Stochastic {or maybe the|and also the|or perhaps the} MACD. Or one of the literally hundreds of other indicators that are available. Well, {I really like|I enjoy|I like} the MACD. And the Stochastic is also a favorite. But there is one indicator {which i|i|that we} refer to more often than some other. However, before {We|I actually|My spouse and i} let you know what it is, it is important that this {conversation is|dialogue is|debate is} {put|located} in {framework|circumstance|situation}. I always stress with the traders that {We|I actually|My spouse and i} mentor that {the main} part of your analysis is price action. By this I mean that {one thing|most important factor} you should look at is the {condition} of the stock's chart. And any patterns that {you could be|you may well be} able to identify. {Particularly|Specifically|Especially}, look for trends and consolidation. Candlestick reversal habits and support and levels of resistance. And be particularly aware of all time or 52-week {levels|heights|altitudes} or lows. Also, look for double tops and bottoms and triangles and head and shoulder habits. Because it {is merely} in the context of the basic price action that you can make your trading decisions. And it {is merely} from this understanding that you should {commence|get started} to apply your {specialized|technological} indicators. So, establish the context for your further analysis. Indeed, {make use of this|utilize this|employ this} first process as {a testing|a verification|a screening process} device. Because, unless the chart immediately "speaks" to you, you should get rid of the stock from any further review. What I mean by this is that {unless of course|except if|until} there is a clear reversal pattern or potential for a breakout, move on. Don't waste time analyzing charts {which may have|that contain} no probability of immediate {motion|movements|activity}. And {one of the better|among the finest} patterns for short-term trading is the channel. {Keep|Continue to keep|Always maintain} an {vision|attention|eyesight} out for these and when you find one, give serious consideration to trading them. Now, {a few|discussing|why don't we} {return to|make contact with} our earlier {conversation|dialogue|debate}. Precisely what is {the main} indicator? Well, whilst this might surprise some of you, I believe it is volume. You see volume is {a sign|the|indication} of the strength of price action. A market needs high volume or increasing volume to sustain a movement in cost. {Therefore|Thus|And so} we want to see volume moving in the direction of the price. Increasing both in an uptrend and also a downtrend. But realize that it takes more {work|hard work|efforts} to push prices higher than {it can|it will|it can do} to cause them to drop. {Therefore|Thus|Consequently} increasing volume is more significant in an uptrend than a downtrend. {In the event that|In the event|If perhaps} volume is diverging from the trend [going down {rather than} up] then we would normally not carry out any further analysis. {Since the|As the|For the reason that} {absence|shortage} of volume means there is a lower {possibility|likelihood} of price movement in the direction of the current trend. Note however, that divergence can be an indication that a trend is about to end. So this {is definitely an|is usually an} early sign of a reversal. Another important aspect to volume that is often overlooked is in regard to retracements. {Since|Mainly because} the volume during retracements gives us a significant indication of the {power|durability} of the overall {pattern|tendency|craze}. A strong uptrend should have higher volume on the upward legs of the trend and lower volume on the {downwards|down|downhill} or corrective legs. {Likewise|In the same way} in a downtrend. {Quantity is|Volume level is|Amount is} best plotted below your chart as a histogram, or series of vertical lines. And it helps {to include|to incorporate} a moving average line over the histogram to smooth the volume readings. I use a 3 day {MOTHER|MUM|MOVING AVERAGE} {you could|however you can} experiment to see what works best for you. But most {significantly|important|notably}, always consider volume before entering a trade. The above comments are offered for educational purposes only. {Our company is|Were|We could} not providing you with financial advice. {All of us are|We all are} simply sharing with you what has and hasn't worked for all of us personally. {If you would like|If you want to|If you need to} trade or invest in the {stock exchange|currency markets|wall street game} you should obtain advice from a registered {accredited|qualified} advisor.