Today, we're going to talk about the Best Trend Indicator. Stay tuned.
Welcome everybody to Coffee With Markus.
Today as you can see, I'm not at home. I'm in a hotel room in Florida.
I traveling again when I wanted to join you here to Coffee With Markus
because one of the questions that I received all the time is
How do I find out whether stock is trending or not?.
so today, we're going to talk about the "Best Trend Indicator".
Now, by doing this, let's jump to the charts, right away.
Here we go, Here, I brought up the website www.finance.yahoo.com
website everybody has access too and if you want analyze any stock see, let's see one of the most active stocks today is (SQ).
so why don't we bring up (SQ) ?
doesn't really matter, so you bring up as Q and then here we can click on full
click on full screen, when you do this now you have an opportunity to add indicators and now the question is what indicator do You use?
Now, first of all, indicators are fantastic because they're objective.
Indicators tell you whether a market is going up down or sideways. And let me show you how to do this.
first of all, there is no one best indicators. There are dozens, maybe even hundreds of indicators out there.
And I personally like to use three indicators likely to go up down or sideways.
The first indicator that like to use is the Relative Strength Index (RSI) Click here, on our site and we wanna use
setting of "7" that's when I personally like to use and we took the overbought and over sold to "50".
Here we go, now you see the RSI and generally, whenever (RSI)
is above 50, it means that now we have Bullish Market Conditions, and when it is below 50 means
for the past, I wanna say week or two... this stock was in Bullish market conditions.
One indicator is not enough.
The second indicator, I like to use the "Stochastic".
so bring up the stochastic. I like to use a setting of 14, We only need stochastic
let me set this one to white, We only need to see the red line, here.
Fantastic!
Whenever the stochastic is above "50" it means that, now we have "Bullish Market Conditions"
and if below "50" We have bearish market conditions. Now, as you can see here.
First, the (RSI) confirm that we have Bullish Market Conditions
and a few days later, the stochastic, also turned above 50.
So this means that on this particular day here, right here this. This is when the stock move from a sideways move
into an up trend based, on these two indicators. Now,
I like to use the third indicator as well.
And the third indicator that I like to use is
Moving average convergence divergence (MACD)
(MACD) the regular settings here everything. This up and here what I would like to see with this indicator is that the purple line
is above the orange line. So if you take a look at these three Indicators
than you see that this particular day to 2/20/2018 on February twentieth all three indicators
indicated Bullish Market Conditions. Meaning? that they are so I was above 50
and the stochastic was above 50, and the RSI the purple line was above it's moving average the orange line.
So this is when right now there's an opportunity to buy. As you can see for the next few days this
stock was just going side ways but then today is exploded.
So we wanna had an entry here at around I wanna say $45 and then it jumped up to $50.
So that's a move of 10% that's what we are looking for We wanna see stocks that are ready
to explode within a week or two. My sweet spot for being a trade is anywhere between 5 and 20 days.
Now, an opportunity that identify today
"VOYA"
I don't even know what these guys are doing cause all I do is look at the indicators that told me
that today was a day were all indicators are pointing up.
so actually it happened yesterday, as you can see,
yesterday, the RSI was above "50" The stochastic was above "50"
and also that (MACD) moved above it's signal line, so the purple line is above the orange line.
simply hard to see here but if you look on this side right here on the
left side, you see that on the previous day the purple line was at 0.09 and the orange line -.2
so this is were here. We have a perfect entry and the entry was it around $51 and as
you can see today, is already up to $51.97. So here, this means that
now we are no longer sideways move, this means that now this stock has the potential to go up to
$55 or even higher because again that's what like to see that is stock is moving around 10% within 5 to 20 days.
In summary, what is the best trend indicator for stocks?
Well, for me, it is three indicators and let me go back here to the screen when we come back on to the camera.
Right, so we are talking about "Three Indicators" and the indicators that I like to use
(RSI) The Relative Strength Index
Stochastic, and also the (MACD)
Now, why indicators? Because indicators are more objective.
You see here. It is crystal clear
RSI
is above 50 or below 50, there's no room for interpretation.
And that's what I want when trading, because when trading I wanna trade, what
I see and not what I think, because whenever I trade what I think, it went horribly wrong.
indicators are black and white and I can see indicators are easy to use, even if you're
absolutely new to trading. And the beautiful thing these days.
It doesn't require fancy software. You can trade indicators so you can chart indicators on free websites like
finance.yahoo.com
Alright, I hope that helps and clarifies what is the best trend indicator for stocks.
in my opinion, it's three.
hit like if you like this, leave a comment If you have any questions about these indicators.
And share this with your friends who might be interested in knowing what the best indicator for stocks is.
and I'll see you the next time.
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