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Little-known but effective indicators of technical analysis

Started by Admin, Feb 07, 2024, 09:30 PM

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Topic keywords [SEO] forex-indicatorstechnical-analysis


From this article you will learn:
  • What are some little-known indicators?
  • Examples of their use;
  • Recommendations for using these indicators.

Technical analysis in financial markets includes a variety of tools and methods for analyzing price dynamics and trading volumes. In addition to well-known indicators such as moving averages and relative strength, there are also less common but very effective indicators that can prove to be real hidden heroes for a successful trader. In this article we will look at a few lesser known tools and provide examples of their use. It is important to say that the recommendations we give below are not a priori correct. The signals given by these indicators may be erroneous, so use other indicators to get a better understanding of the situation.

1. Volume Percentage Change indicator (Volume Percentage Change)
This indicator represents the relative change in trading volume compared to the previous period. It can help identify changes in market activity that may portend a change in trend. For example, a rise in volume with an increase in price may indicate support for the current move.

Example of use: If the price of an asset is increasing and trading volume is also increasing, this may indicate the true strength of the trend. Conversely, a decline in price with increasing volume may signal a potential correction.

2. Price Standard Deviation indicator (Price Standard Deviation)
Price Standard Deviation measures the volatility of the market. This indicator measures how much prices deviate from the average value of an asset. When volatility is high, traders can expect large fluctuations, which can be used to make entry or exit decisions.

Example of use: If the standard deviation of the price is increasing, this may indicate a possible strengthening trend. Traders can use this information to manage risk and adapt their strategies.

3. Accumulation/Distribution Indicator (Accumulation/Distribution)
This indicator shows the relative strength and direction of capital flows into an asset. It is based on volume and price movements, which allows you to identify changes in the proportion of purchases and sales.

Example of use: If prices are rising but the Accumulation/Distribution Indicator is declining, this may indicate that growth is based on weak volume and may not be sustainable.

4. Dynamic Support and Resistance Levels indicator (Dynamic Support and Resistance Levels)
This indicator adapts support and resistance levels depending on the current price dynamics. It takes into account changes in market volatility, which allows you to more accurately identify areas where prices may change direction.

Example of use: If the market is trending, dynamic support and resistance levels can be more accurate than traditional methods because they take into account the current volatility.

5. Relative Volatility Index (Relative Volatility Index)
The Relative Volatility Index measures current market volatility and compares it to historical data. This indicator can help traders determine if the current volatility is high or low relative to past periods.

Example of use: When the Relative Volatility Index is high, traders can expect stronger price swings, which can create opportunities to trade short-term trends. A declining index may indicate a period of stability, which may be of interest to those who prefer to trade in calmer market conditions.

6. Bollinger Bands with Volume (Bollinger Bands with Volume)
This modification of the well-known Bollinger indicator includes trading volume, which helps traders to more accurately assess the strength and stability of the current trend.

Example of use: If the price touches the upper Bollinger Band and the trading volume also increases, it may indicate the continuation of the uptrend. At the same time, a price decline with increasing volume near the lower band could reverse.

7. Relative Correlation Indicator (Relative Correlation Indicator)

This indicator shows the relative correlation between two different financial instruments. It can be useful for traders engaged in pair trading or creating diversified portfolios.

Example of use: If the Relative Correlation Indicator shows a strong negative value, it may indicate that two assets are moving in opposite directions.