a description of the system
The equipment: Materials the trader can use
The technical analyst has access to a wide variety of tools. All of them provide some kind of information, be it price direction, trend strength, setbacks, trend speed, and a thousand other things.
After many years of studying hundreds of them, I decided on two basic indicators, two simple averages and one exponential one.
The Moving Average Convergence/Divergence, or MACD, comes first. It is an indicator that combines two price measurements and interrupts them at midpoints in an oscillator (open range). This oscillator's strength is that it is both straightforward and faithful to predetermined behavioural patterns.
My selection for a second indication was the DMI (Directional Movement Index). Three distinct lines are drawn using this indicator. The bulls' degree of activity throughout a specific time period is shown by the D+. The D- represents the bears' degree of activity over a specified time period. The ADX is a tool that tells us how strong the current trend is in the market. similar to how the MACD works
I look at the trio of moving averages—the SMA100, SMA200, and EMA50—in its whole. If we examine the set of moving averages collectively, they provide us with a wealth of information in addition to serving as areas of support and resistance. Do fast averages fall in front of or behind slow averages? Is the pricing higher or lower than these medians?
Our ability to comprehend the market climate at any given time will be substantially improved by knowing the answers to these two questions.
Finally, trend lines are the genuine validators of any scenario that we may raise because they are a useful tool for both Technical Analysis and trading. The effectiveness and validation capacity of support and resistance lines are comparable.