5 Most Popular Technical Indicators Explained in 5 Minutes

IQ Option, the online cryptocurrency exchange, has recently released a blog post on the 5 most popular technical indicator tools and how they are used.

IQ Option, the online cryptocurrency exchange, has created a blog post highlighting the 5 most popular technical indicators used and explains how they can be utilized. This is a list for new traders who want a basic understanding of these concepts. The five technical indicators showcased are Moving Average (MA), Alligator, Moving Average Convergence Divergence (MACD), Relative Strength Index (RSI), and Stochastic Oscillator.

Moving Averages (MA) is used to predict potential upward and downward trends. An indicator of a trend is when the MA crosses the line from above or below, signaling the upcoming trend. The Alligator indicator consists of three Moving Averages within different periods. A buy signal is received when the “lips” of the alligator cross the “teeth” upwards; if it crosses down then it signals a downward trend. The Moving Average Convergence Divergence (MACD) consists of two lines to spot trends. When these lines start to cross, depending which crosses, it indicates an emerging trend. The RSI, or Relative Strength Index is used to determine the strength of a trend and when it may reverse. Once the indicator breaks out of the 70% and 30% levels, it may indicator the strength and continuity of the trend. The Stochastic Oscillator doesn’t predict price patterns, but the momentum of the asset’s price. The price momentum changes before the trend reverses, so this indicator may help users find chart reversal points.