Best Trading Indicators for Beginners on TradingView
Trading can feel overwhelming when youre just starting out. With so many technical indicators and tools available, it’s easy to get lost in the noise. If you’re diving into the world of trading, especially using a platform like TradingView, you need to understand which indicators are most effective for beginners. The right ones can give you clarity and confidence, helping you make informed decisions in real time, across multiple asset classes like stocks, crypto, forex, and commodities.
In this article, we’ll explore some of the best trading indicators for beginners on TradingView, with tips on how to use them, what they do, and why they work. We’ll also touch on the broader trends in the trading world, including the rise of decentralized finance (DeFi), the shift to AI-driven trading, and what the future holds for prop trading. Whether you’re trading stocks, forex, or even crypto, understanding these tools will help you get started on the right foot.
1. Moving Averages: The Foundation of Technical Analysis
What it is: The Moving Average (MA) is one of the most commonly used indicators in technical analysis. It smooths out price data to create a trend-following indicator. Moving averages are calculated by averaging the closing prices of a particular asset over a set period. There are two main types: Simple Moving Average (SMA) and Exponential Moving Average (EMA).
Why it works: Moving averages give beginners a clear picture of market direction by filtering out short-term fluctuations. The most basic trading strategy involves using the crossover of a short-term moving average (like the 50-period) with a long-term one (like the 200-period). When the shorter moving average crosses above the longer one, it can signal a potential buying opportunity.
Pro Tip: For forex or crypto markets, a 9-period EMA is often useful for spotting quick price changes, while the 50-period and 200-period SMAs work better for gauging long-term trends.
2. RSI (Relative Strength Index): Gauging Overbought and Oversold Conditions
What it is: The RSI is a momentum oscillator that measures the speed and change of price movements. It ranges from 0 to 100, with readings above 70 indicating an overbought condition and readings below 30 signaling oversold conditions.
Why it works: As a beginner, understanding overbought and oversold conditions is crucial for predicting potential price reversals. When the RSI moves into overbought territory, it suggests that the asset might be due for a pullback. Conversely, an oversold RSI could indicate that an asset is undervalued and could soon rise.
Pro Tip: Combine the RSI with other indicators, like moving averages, for stronger confirmation of a trend reversal.
3. Bollinger Bands: Volatility and Price Squeeze
What it is: Bollinger Bands consist of three lines: a middle band (SMA) and two outer bands that represent a standard deviation above and below the middle band. These bands expand and contract based on market volatility.
Why it works: Bollinger Bands are fantastic for identifying periods of high or low volatility. When the bands narrow (a “squeeze”), it signals that the market is about to break out—either up or down. Conversely, when the bands widen, it suggests that volatility is high, and prices may trend in the direction of the breakout.
Pro Tip: Use Bollinger Bands alongside the RSI or MACD to confirm breakout signals and avoid false moves in choppy markets.
4. MACD (Moving Average Convergence Divergence): Identifying Trend Shifts
What it is: The MACD is a trend-following momentum indicator that shows the relationship between two moving averages of an asset’s price. It consists of the MACD line, signal line, and histogram.
Why it works: The MACD is powerful for identifying trend changes. A MACD crossover (when the MACD line crosses above or below the signal line) can signal a shift in market direction. Additionally, the MACD histogram helps to visualize the strength of the trend—larger bars indicate stronger momentum.
Pro Tip: For beginners, use the MACD to confirm trends indicated by other indicators like moving averages or Bollinger Bands. It’s most effective in trending markets, not choppy ones.
5. Volume: Understanding Market Sentiment
What it is: Volume represents the number of shares or contracts traded in a given period. It is often shown as a histogram below the price chart.
Why it works: Volume is one of the most underrated indicators, especially for beginners. It’s essential for confirming the strength of a trend. If a price move occurs with high volume, it’s more likely to be sustained. Conversely, a price move with low volume may lack the momentum needed to continue.
Pro Tip: Look for volume spikes at key levels (support/resistance) for potential reversals or breakouts. Higher volume during a breakout is a strong indication that the move has strength behind it.
How These Indicators Fit Together
While each of these indicators can provide useful information on its own, they become even more powerful when combined. For example, a trader might use the RSI to spot overbought or oversold conditions, the MACD to confirm the trend, and moving averages to determine the overall direction of the market. By layering these tools, you can increase your chances of making profitable trades.
Prop Trading and the Future of Finance
The rise of prop trading (proprietary trading) is opening up exciting opportunities for both seasoned and beginner traders. With prop trading, you trade with a firm’s capital rather than your own. This allows you to potentially earn profits without risking your personal funds, but it also comes with additional risks.
As the financial landscape continues to evolve, decentralized finance (DeFi) is reshaping how we think about trading. DeFi eliminates intermediaries like banks, enabling peer-to-peer trading of assets in a decentralized manner. While DeFi has made trading more accessible to everyone, it also presents challenges like security risks, regulatory uncertainty, and high volatility.
Looking ahead, we’re seeing the rise of AI-driven trading platforms and smart contract-based systems. These technologies could revolutionize the way we trade, offering more efficient, transparent, and automated solutions. However, beginners should proceed with caution and educate themselves before diving into these advanced tools.
Final Thoughts
The world of trading is dynamic, constantly evolving, and, at times, overwhelming—especially for beginners. The key to success lies in choosing the right indicators and combining them in ways that make sense for your trading style. Whether youre interested in stocks, forex, or crypto, the indicators mentioned above can provide a strong foundation for understanding market movements and making more informed decisions.
As trading becomes increasingly accessible and technology continues to drive innovation, the future looks bright for new traders. Decentralized finance and AI-driven systems may hold the keys to new opportunities, but it’s crucial to remain vigilant and always learn from the past to avoid potential pitfalls.
The best traders aren’t just those who know how to read charts—they’re those who understand the tools, adapt to the changing landscape, and keep learning every step of the way. Get started today on TradingView, and start your journey towards financial independence.
Ready to trade smarter? Dive in, experiment with these indicators, and start crafting your trading strategy today!
