When it comes to trading, everyone has an opinion on the best tools to use. “Best Tool” is an extremely relative term when it comes to anything, especially trading. Depending on your strategy and timeframe you look at while trading, each trading tool will be different. Here, Apiary Fund reviews some of the most common trading tools and how to use them in your trading along with our YouTube channel at youtube.com/apiaryfund.
Indicators are one of the most commonly tools individuals use in their trading. Most of these indicators are based on a sort of moving average. With this in mind, the moving average seems to be on top of the trading tools to use. A lot of traders, regardless of the timeframe they trade, review the moving average as their most valuable trading tool. Multiple price pattern moves can be made out with the moving average. An extremely common application with just one moving average has to do with price crossover. Once the price intersects and deviates from the moving average, the theory is that by the next period of the moving average, the price will converge back on the average and then have its next break. While this isn’t always the case and price movement will stray far beyond the period and moving average, especially on larger time frame charts, the idea is commonly used at the start of a crossover. The CCI, a popularized trading indicator, follows this idea with its crossover of the 0 level.
Other applications of the moving average include crossovers of the moving average with a secondary average on the chart. This includes mainstream indicators like MACD, Accelerator Oscillator, and Awesome Oscillator. These three are just a few of the many indicators that look at moving average crossovers to display the results to you. These indicators can sometimes be more reliable than just one moving average with the price since if the price is going to deviate longer than the period, these indicators will account for that. That makes these a bit more powerful when it comes to trading longer timeframes or when looking for more ideal entries and exits at times.
Then, you have your non-indicators. Depending on the trader you ask, chart reading is more important than any indicator you can add onto any chart. Chart objects, or drawing tools, are used to show traders the patterns that are already on the chart with more ease. These include all your Fibonacci sequences, support and resistance, and trend patterns. The Fibonaccis, for example, look at price movement ratios to make predictions. Support and resistance are great for quicker traders and more frequent trades, as price fluctuates between two set points on a chart. Price patterns such as wedges, head and shoulders, flags, and pennants all predict when price is going to break out and in which direction. The main benefit to these chart reading strategies is that they’re apparent on a wide variety of timeframes and don’t really degrade in their usefulness as you change timeframes like certain indicators can.
All in all, your strategy will vary mainly on your timeframe and a big part on your preference. If you don’t like how something looks on your chart, no amount of review is going to change that for you. Finding what works best for you, though an Apiary Fund review or any other review won’t change that. If you’re interested in seeing some of the Apiary Fund reviews of indicators, chart objects, and more, then the Apiary Fund YouTube channel is a great place to start to see how an indicator works and to find the best trading tool for you.