Watching YouTube videos or reading blogs with similar titles is synonymous with ‘research’ and ‘analysis’ for a big part of the population. And this is exactly how people lose their hard-earned money.
Trading or investing requires a clear understanding of the coin or stock and its underlying value. It doesn’t mean you need to always know the protocol/company to the T, like their debt-to-equity ratio and other fine details. However, at the minimum, you should know the following about a coin/stock:

• Entry price at which you can afford to buy a coin/stock
• Potential returns or expected growth in price
• The time needed to reach the expected price

Technical Analysis (TA) is a popular technique to evaluate stocks or coins based on similar data points and elements. This articulation will tell you about TA while also delving into trading indicators before we conclude with the best indicators for you.

What Is Technical Analysis?

Imagine you are visiting a mall for the first time and you enter the food court to get some food. There are a plethora of options from popular franchises to eateries of local cuisine. Now, how do you decide where to eat?
Idea 1
You can always visit a couple of vendors, observe their hygiene, taste a little bit, and decide to eat at a specific place. In a food court with 20 different vendors, you are less likely to visit all of them and repeat the practice. This means you are likely to miss the best food available in the food court.
Idea 2
There is another technique you can adopt. This involves standing in a corner with keen eyes. You observe which vendor has the most customers and deduce it as the place with the best food. Here, you bet on the assumption that the crowds’ preferences will match yours.
TA or Technical Analysis is very similar to idea 2. Market data drives your analysis of a stock/coin and you trade or invest based on trends and patterns derived from it.
If TA is as easy as we make it sound, is it a foolproof way to maximize profitability?
Not really. Since TA is dependent on the market and its participants, there are certain assumptions that you’d have to make while making a TA-based trade.

The Market Discounts Everything

This assumption is born out of the belief that every factor related to the stock/coin has been considered and is reflected in its price. For stocks, right from dividend declaration to employee layoffs, everything is presumed to be factored into its latest price. Similarly, in crypto, hashing difficulty, governmental adoption, and even tweets are assumed to influence a coin/token’s price.

Prices Always Move in Trends

When a naive investor opens the trading chart, they feel overwhelmed looking at the several random price movements. Green and red lines or candles are their nightmares now. But, TA experts assume that regardless of the time frame, price movements always are part of a trend. Once the trend is formulated, prices move in the same direction.

History Tends to Repeat Itself

This is a psychological assumption deeply engraved in the ABCs of technical analysis. Market participants often react similarly when the price moves in a certain direction. Emotion beats logic as several bearish trends have seen a lot of selling and similarly during bull runs, participants FOMO themselves into buying stocks/coins at nearly their all-time highs.
Now, after learning what the strategy is, we are going to learn about the tools required to make the strategy work. The most prominent tool for a TA-based trader is Trading Indicators.

What are Technical Indicators?

The price charts of any coin/stock are free for diverse interpretations. Hence, during TA, technicals like support levels can go for a toss as every trader with their prejudice intact can draw support lines at different price points. Support and resistance zones are vital and drawing them should never boil down to destiny.
To remove this uncertainty and provide a level-playing field, technical indicators are used. They are mathematical calculations used to plot lines on the price chart to identify trends and key price points of a coin/stock.
Think of trading indicators as a map that guides you through the maze of ambiguity. Using them in coalition with a bit of market psychology and understanding of risk will enable you to make better trading decisions. Given their quantitative nature, you can also automate your trades using these indicators.
Now that we understand how TA works and how we can use indicators to be better traders, let us delve into seven of the best technical indicators.