stock analysis stock indicator

Stock Analysis Indicator

Stock Analysis Indicator has gained an importance status is technical analysis.  One of the reason indicators has been widely used because there is many investors believe share investment could be simplified by only judging the analysis indicator.

Stock indicator is an importance tools that help investor quickly assess individual technical chart, however share investment is more than merely analysis indicator. N Keep learning and apply the knowledge learn in the stock trading.

Availability of Stock Analysis Indicator

There are many indicators for stock chart analysis, such as Stochastic indicator, MACD, moving average, Stop and Reversal, Bollinger Band, RSI, etc.  In most of the stock analysis chart, we always come across technical chart that come along with difference technical indicators.  An investor will easily get confuse among so many indicators.

Common Misconception Using Indicator

Technical analysis indicator only apply for certain time-cycle period, moreover some indicators only suitable for dedicates time-cycle period.  Investor is advised to understand the nature of indicator before putting it in the technical chart.

In stock trading, we always experience difference conclusion while applying indicators in chart analysis.  More over, even same indicator may also derive to difference conclusion due to the difference of time-cycle.  For instance:

1.                  A-indicator gives sell signal for medium-short time cycle period however long-medium time-cycle period still maintain buy-in signal;

2.                  A-indicator shows buy-in signal for medium-short time cycle period but B-indicator has not shown buy-in signal for same time-cycle;

3.                  A-indicator gives buy-in signal, but B-indicator with difference time-cycle still give sell signal;

There are much more scenario that investor face while applying indicator in the technical analysis.

How to Select Stock Analysis Indicator?

From our trading experience, we do not see any advantages by applying more indicator in a particular technical chart, perhaps, it confuse the investor.

Indicator was invented having their goal to accomplish.  Most of the indicator was calculated from same set of data source, but with difference perspective.  For instance Stochastic Indicator is providing investor the info about the relevant price position within a time period, which also the time-cycle.

Investor should only select the suitable indicators that match to their stock analysis procedure and trading strategy.  We always remind investor select not more than 2 indicators for their stock analysis.

For stock investment, especially comes to technical analysis, we always emphasize the concept of Less is More.  Investor needs to learn any technical indicator and use it across all stocks.  Meanwhile, we also recommend investor not only consistently using the same indicator but also setup a stock analysis procedure.