11/05/2018
Short Term (1day,3day,7day)
Mid Term (7day,21day,30day)
Long Term (1Month and 3Months/30day and 90days).
These indicators, are created by taking information from one specific Exchange Market. Only Closing prices are used. This helps a trader to track the market and time the trades.
Each line is an average price line of the makert price, for different time-frames...e.g) 1-Day,3-Day,7-Day,21-Day,30-Day etc. Each of these lines move at different speeds, therefore giving a trader an advantage of waiting for the right time to act.
The shortest time frame being a 1-Day Moving Average Line, it can move up and down few times while the 7-Day line remains unmoved.
But if the 1-Day line moves upward and later followed by the 7day line, the upward trend is forming and lost traders obey long-term indicators to avoid falling victim of price bounces and market reversals.
Usually, if a short term shows a particular trend, refer to the midterm and long term indicators to see if they will also confirm the trend...one all three lines point towards the same direction it means that trend is confirmed.
Short term indicators (1-minute,5-minute,1-hour,1-day) have a tendency to go up very high and back down very low in a short space of time, and usually traders get confused and end up selling while the market is still moving up midterm to longterm. Such people will be trading against the trend and these trades will be inspired by panic selling and panic buying.
If you're looking at 1-Day/1-week/1-month/1-year charts, wait for 1Day to drop and see if 1Week will drop aswell...if that is happening then it's a first selling signal. If 1 month follows then it's a sure selling period and only when the 3 lines begin to disect at the bottom, you can stop selling.
Therfore in short, these lines give a signal when they crossover each other. The first intersection may be the first action point, the second one should be a strong action point because once all 3 lines go to the same direction, it's probably too late to embark on the trend.
Check any indicator with two or three lines and notice what happens when the fast line crosses over the slow line. Usually, in fact always the trend reverses especially on long-term indicators.
EVERY INDICATOR SIMPLY SAY-"IF (y) HAPPENS THEN (z) USUALLY HAPPENS. "IF (a) HAPPENS, (b) USUALLY FOLLOWS.
These lines also move in ways that leave trails, and such can form USUAL PATTERNS or SHAPES signaling a particular market condition.
Hence history always repeats itself, market conditions and investor's behaviour is more likely to happen again.
The way people behaved during a falling market before, are more likely to behave the same way the next time around.
No one can predict the market movement, but if tracked...the market movement can be predicted over a longer period of time.
Some indicators can measure the momentum of the trend, and predict the Top of the market or The bottom of the market.
It's not important what you're looking at, rather what you see matters most.
