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5 Most Used Indicators by Pro Traders on TradingView

TradingView, a browser-based charting platform, and social network helps global traders and investors discuss, spot, and share opportunities across the global marketplace. The platform’s indicators and risk management tools form a key component of a pro trader’s strategy.

TradingView intends to build a robust finance platform for accelerating and enhancing the community’s overall investment journey. Let us then explore 5 of the most popular indicators used by pro traders on this platform.

5 Popular TradingView Indicators Used by Pro Traders

Stochastic Oscillator

The Stochastic Oscillator indicator shows momentum and trend patterns. It helps compare an asset’s specific closing price with the asset’s prices over time on a scale of zero to 100. Any reading < 20 generally points to an oversold market. Likewise, reading > 80 indicates an overbought market. Under normal circumstances, when prices reach such extreme levels, then a market correction or rally can be expected.

Bollinger Bands

The indicator offers the normally traded price range for an asset.  The increase or decrease in the bandwidth indicates current volatility. When the Bollinger Bands are closer or narrower to each other, the asset is perceived to have lower volatility. On the other hand, wider bandwidth indicates higher volatility.  

Moving Average Convergence Divergence (MACD)

MACD, a trend showing momentum indicator, helps compare two moving averages for detecting changes. If moving averages are coming together (converging), it indicates decreased momentum. Moving averages moving away from each other (divergence) means strong momentum. Likewise, the indicator moving above zero (signal line) indicates a bullish trend, while a movement below zero points towards a bearish trend. By using this indicator, traders can evaluate possible buy and sell opportunities across support and resistance areas.

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Relative Strength Index (RSI)

RSI indicator aids traders in detecting momentum, market situations, and warning signals for volatile price momentum. The RSI ranges between zero and 100. A scale above 70 indicates an asset is overbought, while a scale below 30 considers the asset oversold. An overbought signal points towards a price correction for the asset, while an oversold signal signifies a rally.

Fibonacci Retracement

Fibonacci retracement indicator uses horizontal lines for determining possible levels of support and resistance levels, which means the indicator can specify at what level the market will move against an existing trend. Pro traders who are sure of an upward trend in the market often use this indicator to confirm the same. As the indicator shows an upward or downward trend, traders find it easy to decide when to consider stop/ limit options or open/close positions.

Conclusion

TradingView indicators help traders in analysing the market trends and price momentum. However, one indicator may suggest a “buy” option while another may suggest “sell” option.  So, pro traders do not apply an indicator in isolation or too many indicators together. You should have your online trading plan in place and then consider the indicators best suited to your plan.

Disclaimer: This blog is not to be construed as investment advice. Trading and investing in the securities market carries risk. Please do your due diligence or consult a trained financial professional before investing.

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