Top 5 Underlooked Technical Indicators
When you search for technical analysis, you will get strange data about indicators. There are some underrated technical indicators too. There are hundreds of technical indicators you can use in technical analysis. But for some financial markets, there are specific underlooked technical indicators.
Such type of trading indicators can provide trading signals with high accuracy. But still, traders from various trading markets are not utilizing these technical indicators.
But can such technical indicators help you? Or they are applicable to a particular trading market only? There are various opinions on this topic. That is why we are here with the top five underlooked technical indicators.
Explore the top five underlooked technical indicators
These top five underrated technical indicators are being used by many traders. From forex traders to stock traders, almost every financial market is using such indicators.
But still, there is some ignorance that the whole community is giving to these indicators. We are here to help you know these underrated technical indicators.
List of Five UnderLooked Technical Indicators
As a trader who trades a variety of financial products, you cannot depend upon a single trading strategy or indicator. That is why you need to research more about market indicators and their use. Here is the list of five underrated technical indicators. These indicators are being used by a large number of traders.
Many of these indicators are used in the wrong way by newbies traders. While on the other side, some traders depend upon indicators that are being used by other traders. And there are some underrated technical indicators. These indicators are not used by traders more often. That is why they are underrated.
#1. Trend Line
The first indicator which is an important part of charting is the trend line. This type of indicator is being used to capture the trend and to forecast the price action details. It is simple as compared to the other technical indicators such as Fibonacci retracement and support & resistance.
But most of the traders out there are ignoring the trend line. But, we cannot say that the trend line is not used anymore. But it is known as one of the simplest things on charts. And nowadays some myths using simple things won't give you much benefit in trading.
#2. Simple Moving Average
After trend lines, there is something profitable but always underrated. We are talking about simple moving averages & as its name suggests, a simple moving average is easy and simple to use. There are some advancements in this technical indicator which makes it less effective as per the traders. But, this simple moving average is still in use and it is still effective enough.
The EMA is the advanced trading system developed after a simple moving average. But it is easy to learn how to trade using simple moving averages as compared to other indicators.
#3. Parabolic Stop & Reverse
Parabolic SAR and the reverse technical indicator is also a vital technical indicator. Very few publications are out there in the market about Parabolic stop and reverse. A line that indicates the indicator value is being used by Parabolic stop and reverse.
Parabolic stop and the reverse line is also known as PSAR. It is not so popular as other trading strategies and trading indicators. This technical indicator is known for determining entry and exit points. And also, it is used in various technical analysis strategies to figure out the entry and exit points.
No matter if you are an intraday stock trader or stock market trader. You can capture bearish or bullish sentiment with parabolic stop and reverse indicators.
#4. On-Balance Volume
Volume is an important metric to track for any traded financial instrument. No matter if it is a commodity or currency pairs in the currency market. That is why the on-balance volume indicator is being used in the market for a long time.
But most of the traders out there have neglected this technical indicator. There are several reasons for this negligence.
#5. Ichimoku Cloud
Ichimoku Cloud is an important technical indicator that helps traders to make buy or sell decisions. Chart patterns of the Ichimoku cloud are easy to read. But still, many traders find it hard to understand as compared to other technical indicators such as Bollinger band and others. Ichimoku Cloud is very useful but it is always underlooked by traders.
Why Technical Indicators Are Underlooked?
A novice forex trader will always use an indicator or trading software that is overlooked. That is why underlooked indicators are going to be more underrated in future. But why are these indicators underlooked? There are several reasons behind it, let us find why they are underlooked.
Reasons Behind Underrating
From day-trading to online trading, there are different reasons behind underlooked indicators. The reasons also particularly differ from indicator to indicators. Following are some of the major reasons.
Sometimes a technical indicator is recommended in investment advice. But it shows inaccurate results and it results in its underrating. After such cases, that particular indicator will be underlooked on various trading platforms.
Myths & Rumours
Sometimes underrating technical indicators is not reality. There are myths and rumours or sometimes false trading tips that are also responsible for this. So must see past performance for a technical indicator before using it.
No matter if you have learnt using a technical indicator in free trading courses. But when you start using it in the real world, it becomes complex. Sometimes complexity due to technical factors also makes an indicator more underrated.
Sometimes a technical indicator is underrated due to a lack of references. There must be references to back a technical indicator. When experts and influencers never recommend a technical indicator, then it becomes underrated.
How To Use Underlooked Technical Indicators?
No matter if a technical indicator is underlooked, you can still get benefit out of it and you can use such technical indicators. Following are some of the steps that you need to perform to use such technical indicators.
Choose The Best One
First of all, choose the best technical indicator for you before you enter the market. You need to check whether an underlooked technical indicator is useful for you or not.
Practice Trading With It
Now the next step is to practice trading with technical indicators. There are many ways to do it. Demo trading is the best way to practice a strategy in which you have your selected indicator.
Start Using In Actual
Based upon your results that you get from demo trading practice, start using an underrated technical indicator in the real world.
Many technical indicators are underrated and these technical indicators can be useful because very few traders are there to use them. If you are also willing to get more benefit going out of the box, then you can also try such indicators. But, it becomes hard for novice traders to identify underlooked technical indicators.
After proper identification, you need to check whether an indicator can help you in your trading account or not. Try using underrated indicators on various trading platforms and trading plans. After that, you will get the final underlooked technical indicator for your strategy.
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