With so many indicators available, knowing WHICH one to use and WHEN is as important as knowing HOW to use it. This cheat sheet maps each indicator to the market condition where it works best.
Trending Markets (ADX > 25)
| Indicator | Use For | Signal |
|---|
| Moving Averages (50, 200 SMA) | Trend direction | Price above = long. Below = short. |
| MACD | Momentum + direction | Crossovers for entries. Divergence for warnings. |
| ADX | Trend strength | Above 25 = trend. Above 40 = strong. Falling = weakening. |
| Ichimoku Cloud | All-in-one trend tool | Price above cloud = bull. Below = bear. Inside = no trade. |
| ATR | Volatility-based stops | 1.5-2x ATR for stop placement. |
Ranging Markets (ADX < 20)
| Indicator | Use For | Signal |
|---|
| RSI (14) | Overbought/oversold | Below 30 = buy. Above 70 = sell. |
| Stochastic | Fast momentum signals | %K cross in OB/OS zones. |
| Bollinger Bands | Volatility + entries | Touch lower band = potential buy. Upper = potential sell. |
All Markets
| Indicator | Use For | Signal |
|---|
| Volume | Confirmation | High volume on moves = conviction. Low = suspect. |
| Fibonacci | Price targets + entries | 38.2%, 50%, 61.8% for pullback entries. Extensions for targets. |
| VWAP | Institutional reference | Price above = bullish bias. Below = bearish. |
| Divergence (any oscillator) | Reversal warning | Price vs indicator disagreement = potential reversal. |
Indicator Combinations
- Trend + Momentum: 200 SMA (direction) + MACD (timing) + RSI (confirmation)
- Range: Bollinger Bands (boundaries) + RSI (oversold/overbought) + Volume (confirmation)
- Breakout: Moving averages (trend) + Volume (confirmation) + ATR (stop placement)
- Divergence: RSI or MACD (divergence) + Support/Resistance (context) + Candles (entry trigger)
The Golden Rule
Never use more than 3-4 indicators simultaneously. More indicators = more noise = worse decisions. Pick 2-3 that complement each other (not redundant) and master them. Apply this focused approach on Mal.io.
Mal.io
منصة مال بوابتك المالية في العملات المشفره و الويب ٣
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