Magic Tools For Stocks Success? How To Use The Most Important Indicator
The Moving Average and the Golden Cross
Before you start looking at technical indicators, you should understand trends and support/resistance levels.
Today we will enter the wide field of technical indicators. There are a lot of them and with modern computer technology and Chart Technique, they became more and more popular.
I advise against using too many technical indicators.
But you should know the most important ones. They can be quite useful. Today I present you the most important and at the same time very simple indicator in my opinion:
The Simple Moving Average (SMA)
The SMA shows the general trend
Basically, a technical indicator is a statistical value calculated from the existing data of a historical stock price. So the statement is always related to the past. That is clear. No formula, no matter how clever, can look into the future.
However, since we are dealing with mass psychology and trends when it comes to price movements, technical indicators do get some validity.
Purely statistically, they predict the future…
