🚀 Learn Trading with Hasanat: What are Trend Indicators?
Welcome to the first lesson in mastering your charts! Today, we're diving into Trend Indicators—the foundational tools for understanding market direction on platforms like Binance.
A trend indicator's main job is to filter out the market "noise" and show you the prevailing direction of an asset’s price movement. This helps you trade with the momentum, not against it.
The most popular and easy-to-use trend indicators are Moving Averages (MA).
Simple Moving Average (SMA): This calculates the average closing price over a set number of periods (e.g., 50 days). It's smooth but can be slow to react.
Exponential Moving Average (EMA): This gives more weight to recent prices, making it react quicker to new price action. Traders often use the 10, 20, 50, and 200-period EMAs.
How to Use Them
Look for the crossover! When a shorter-term MA crosses above a longer-term MA (e.g., the 20-period EMA crosses above the 50-period EMA), it's often a signal of a strengthening uptrend (a bullish signal). The opposite (shorter-term crossing below longer-term) signals a downtrend.
In short: Don't fight the trend! Use MAs to confirm the direction before placing a trade.
