Volume
higher than average volume can confirm tops and bottoms at times. See how well it
did this on Ford stock below.
Volume can also confirm and add validity to a breakout and help confirm that it’s
not a false breakout. See how it helped confirm the downside break down of Hewlett
Packard stock. Trend lines/Support/Resistance/Volume are some of the best indicators
you’ll ever find.
Recap
To recap: The best technical indicators are firstly trend lines/support/resistance/volume.
After that would come the versatility of the MACD. It can be left on the chart at
all times. Use only buy signals in the uptrend and sell signals in the downtrend.
Use both signals in a range.
In Trends use 2-3 of the following maximum:
1. Trend lines
2. Moving Averages
3. MACD (buys in uptrend or sells in downtrend)
4. ADX (above 30)
5. PSAR (for stops in strong trends) OR
6. ATR levels for stops
In Ranges, use 2-3 of the following maximum:
1. Support/Resistance
2. MACD – both buy and sell signals
3. Bollinger Bands
4. RSI
5. Slow Stochastics
6. ADX below 30
7. ATR levels for stops