What Are The Best Indicators For Trading In Nifty?

Trading indicators are great to make both short-term as well as long-term profits in nifty.

These indicators differ in style and kind of stock to be traded. In this post, we have listed some of the top trading indicators from reputed Nifty tips provider that will help you make well-informed decisions and invest better.

Trend Line

This is a trend indicator where three connecting rising make an uptrend while three falling tops create a downtrend. The stock price above an uptrend line implies the nifty market is bullish, while the price below the downtrend line indicates that the market is bearish.

It is best to buy when price moves towards uptrend, but sell when price moves towards downtrend line.

Simple Moving Average

This is another trend indicator where an average of the prices of closing stock is taken over selected time duration. For short-term investment you can consider a simple moving average of even 10 days. For long or medium-term investments, the simple moving average can be taken for 100-200 days.

It is worth buying stocks when the price moves towards a simple moving average, but sell when the price falls below long-term moving averages.

Rate of Change

This is a momentum indicator that computes the percentage change in prices or rates of two selected time durations. Most of the Nifty traders prefer using a 14-day rate of change.

A positive value of the ROC means that prices of stock are increasing, while a negative ROC value implies that the prices are decreasing. If there is a turnaround in ROC then this indicates that there is a turnaround in the price.

Moving Average Convergence Divergence

This is a momentum and trend indicator that computes the difference between 12 to 26 days of moving averages. This indicator shows an upward and downward or falling price trend. A rising moving average convergence divergence shows upward price while a falling average shows a downward price.

In most of the cases, a 9-day moving average of the indicator is considered to buy and sell stocks. If the MACD is more than the 9-day average then you may buy the stock. Alternatively, you may sell it.

Bollinger Bands

This is a volatility, trend as well as momentum indicator that comprises three different lines an upper line, lower line, and a 20-day moving average. The lower and upper bands or lines are marked as standard deviations from the 20-day moving average.

This trend indicates the gap, trend, and volatility between lower and upper lines. Falling prices towards lower band at high volatility indicate that the stock is oversold. Prices increasing towards upper band at high volatility signal that counter is over-purchased.

Relative Strength Index

With this momentum indicator, it is possible to compute the average price increase or decrease during a certain time period in relation to the price of the stock. The relative strength index or RSI is marked between 0 and 100.

If the RSI is above 70 or 80 then it is considered that the market is over-brought. However, if the RSI is between 30-20 then it indicates the stock is oversold.

Fibonacci Retracements

This is a trend indicator that computes the percentage of stock prices on the basis of the Fibonacci number series. These percentages are 23.6, 38.2, and 61.8, which are termed as golden ratios.

When the price of a stock falls then stocks retrace their prices to some extent before the beginning of the next trend. As per the Nifty tips providers, such retracements happen around the above-mentioned golden ratios.

These indicators play a vital role in generating important trading signals. Closely monitoring the stock market trends and considering these trends can help you make better investments and stay safe in the dynamic nifty market.

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