If you have an active trading style and are looking for a way to improve your profitability, chances are you’ve heard of TradingView before.
This well-known platform is chock-full of popular indicators, offers superior charting capabilities, and instantly connects you to an online community of like-minded traders. Whether you are looking for a technical indicator or a fundamental indicator, TraderView has exactly what you need to analyze the data you are looking for.
However, since there are so many premium indicators on the platform, you may find yourself wondering which is the best TradingView indicator. Well, although the answer really varies depending on what you need, we are going to answer that question in the article below!
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What do indicators do?
Although indicators do not provide financial advice in the traditional sense, stock traders can use them to inform themselves of potential price movement. The vast majority of indicators can be used over a specific period of time, so traders can track current movements, past movements, or both!
While you may have an excellent indicator for tracking price action, chances are, you’ll want to use more than one. Fortunately, TradingView allows you to use multiple indicators on the chart, giving you all the information you need about market movements and trends on one screen.
Different types of indicators allow you to track different types of data, so it is important to be aware of the differences between them. Let’s take a quick look at the different types.
The four types of indicators
These indicators are useful for determining the current momentum of an asset within the market. Not only can they tell you the total strength of the current moves, but they can also be used to predict when a reversal will occur.
Trend indicators – sometimes referred to as “oscillators” – allow you to track market trends (movement). These are very useful for not only identifying the current market movement but for predicting the future movement as well.
Unlike trend indicators, the volatility indicator simply tells you how volatile the market is at a given point. The higher the volatility, the greater the potential for bigger gains! On the flip side, higher volatility also indicates a higher chance of losing, so this is definitely something you want to keep in mind.
Volume indicators allow traders to track volume across the market. By using a volume indicator, traders will be able to see which sectors (or even specific stocks) of the market are trading over/under.
Best TradingView Indicator: Our top contenders
Now that we’ve briefly gone over the different types of indicators, let’s take a look at our favorite picks. As mentioned above, which one is “best” for you ultimately depends on the specific type of data you’re trying to track.
However, we are sure that each of these will be an invaluable tool for you at some point or another!
relative strength index
The Relative Strength Index (or “RSI”) is a type of momentum indicator that is particularly useful when trading options on individual stocks. This index ranges from 0 to 100. The higher the number, the more stocks are bought.
The lower the number, the more shares are sold. In general, you’ll want to avoid stocks below 30 or above 70.
Stop the parabola and reverse
This trend indicator – also known as Parabolic SAR – shows traders expected price movement (relative to the current market price) using pips. A point placed above the current price indicates a downtrend, while a point placed below the current price indicates an upward trend.
With this information, traders can decide whether they should buy or sell.
Bollinger bands are a volatility indicator that tracks resistance levels in the market. This type of indicator shows the moving average of a market and then places two lines (bands) on the outside of the market average.
The divergence between the bands tells traders whether the market is calm or up (and how far it is).
Accumulation / distribution line
The Accumulation and Distribution Index shows traders the flow of money into a stock and the flow of money out of a stock. You can think of it as a visual representation of the “supply and demand” of that particular stock.
From monitoring oversold conditions and tracking market volatility to anticipating price movements and more, there is no doubt that using an accurate trading indicator – or indicators – can help traders turn a profit.
Just because an indicator is complex does not always mean that an indicator is worth your time. In fact, the simplest pointers sometimes provide the most effective information! Chances are, if you’re looking for an indicator, TradingView will have it (regardless of the indicator!).
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