Hey hey: what's up my friends, so in today's training i want to share with you the best stock trading indicators for beginners. So, let's get started. The first indicator that i want to share with you is moving average. Why two reasons moving average allows you to identify the direction of the trend, so this means at any one point in time.

You know what to do. Should you be buying in the stock markets, or should you be selling next moving average helps you to identify the area of value, so this allows you to buy low and sell high in the stock markets. Make sense all right, don't worry. If you know you don't know how to do this right now, because in the later part of the video i'll share with you step by step, how to apply the moving average.

But first i want to talk about. You know the moving average indicator. What is this about, and you know why does the squiggly little line goes up and down on your chart, so a moving average in essence right? It's a trend following indicator. It works best in a trending market and the value of your moving average is derived by taking the average right of the past prices.

So when you see your moving average line, you know goes up goes down what it's actually doing is taking into account the average right over the last few candles, depending on how many uh time period moving average you're using so, for example, let's say we go with A five period moving average. What it does is that it looks over the last five candles and look: what is the closing price? Of course you can use a different price. You can use the opening price closing high low whatsoever, but in this case let's just keep it simple, the closing price. So, let's say the last five candles.

The closing price is one dollar two dollars three dollars: four dollars and five dollars and you're using a five period moving average. So what is the value of your moving average and it's very simple? What you're going to do is to add up all these numbers together and divide by 5, because it's a 5 period moving average, so you take 1 plus 2 plus 3 plus 4 plus 5 divide by 5.. What i'm gon na get you're going to get 3. Okay, so this value is 3., so once you have this value 3, it will be plotted as like a dot on your chart.

Okay, i'll explain why later how it will end up looking like a normal moving average, but for now, let's treat it like a dot on your chart and, let's say the next candle open and it closed. Let's say at six dollars so clearly when this price up, when the market is closed, at six dollars on this candle, the moving average will be updated. So what is it gon na? Do it's gon na look again right at the recent five most candles, so this is the reason five most candles right and their respective prices. So it's going to be two dollars, plus three dollars, plus four dollars, plus five dollars, plus six dollars divided by five, and that will give you your most recent moving average figure and there will be a four okay, so you're going to take these four and again Plot it like a dot on your chart, okay, so you keep doing this for the next.

You know 10 20 numbers what's going to happen. Is that when you connect the dots right, it will appear like a moving average on your chart, whether it slopes up higher or whether it slopes down lower depends on the prices, the closing prices, whether is it heating up higher over time or heading down lower over Time and that's kind of like the secret right to how moving average goes up and down so now that you have understood the fundamentals, how do you use it? So first, let's talk about how do you use moving average to identify the direction of the trend? In other words, right to know, what should you be doing? Should i be buying or selling very simple? What you want to do is to plot the 200-day moving average on your charts and then look for buying opportunities right if the price is above it. So, for example, you pull out your chart and let's say the price you know goes up goes down, goes up, goes down, goes up goes down. What you want to do is to overlay this with a 200 period moving average, which will look something like this.

So very simple: if the price is above the 200-day moving average, what you want to be doing is to tell yourself rainer. Oh i'm some weird talking to myself, but, let's imagine you know i'm talking to to someone called john right, john doe, hey john! If the price is above the 200-day moving average, you want to be looking for. Buying opportunities make sense, john okay, so in this case, price now is above the 200-day moving average. You should look for buying opportunities, so let me share with you a few charting examples.

So you know how this looks like so look at this chart over here. All you need to do is if you're using trading view, go to indicators and look for moving average. Okay, you can see over here they have exponential weighted or the normal one. Honestly, it's not gon na make much of a difference in this case, it's just a normal moving average that i have over here, and you can see that the price now is above the 200 period moving average.

This is the current closing price, and this is the 200 period moving average, since the price is above it. What should you be doing? You should be looking for buying opportunities. That's right next, one, how about zoom? If you look at this, the price right now is, at this price point 200 period. Moving average is here.

What should you be doing? You should be looking for buying opportunities, that's right and last one right, uh, fiverr, again same thing: price above the price is here 200 day moving average is here: what should you be doing? Looking for buying opportunities? That's right if the price is above, the 200 moving average look for buying opportunities. If the price is below it, you want to stay in cash. You don't really want to look to shock the stock markets because in the long run it's trending higher. So it's much easier to stay long or remain in cash.

Okay. So that's the first technique that i want to share with you. Second one: how else can you use moving average? I mentioned that you can also use it to identify your area of value because here's the thing just because the market is in an uptrend doesn't mean you want to buy immediately, because it could be far away from an aerial value. It's kind of like this.

You know just because you met a girl for the first time doesn't mean you're going to marry her. She could be, you know, for the first time she could be have the face. You know all full of makeup. You do not know how she looks like underneath.

The makeup you bring home her home and you go. Ah, you know you get shocked right or how about you know you meet a girl for the first time it could be a transgender, it could be a psychopath or whatsoever. So this is why it's the same as trading just because the market is in an uptrend doesn't mean you want to hit the buy button. Just like that.

No you want to let the price come to you come to your area of value. Just like you know, relationship right, you want to make the girl work hard to get you to come to you. Instead, usually you know when that happens, you have a much better chance of success. Okay, so same thing here for trading when you use moving average when you're looking to buy in an uptrend trade it from an area of value not far away from it.

So now, how do you do that? So very simple? What i like to do is to use the 50-day moving average because it tends to act as an area of value in a healthy trend. So, let's say price is heating up higher. We trace higher, we trace higher retreats. So what i want to see is the 50-day moving average right, the price respecting it once you know twice so this way right when i see the price bounce off the 50-day moving average a number of times right.

I know that it's acting as an area of value - and this is where you know it's the best kind of like the best time right for me to enter a trade. So let me just share with you some charts, so you can see what i mean. So if you look at fiverr, you can see that this market, it's in an uptrend, but just because it's an in-app up trend, it doesn't mean that you want to buy immediately. So what you can do is again you've seen a little price above the 200-day moving average.

We should only look for buying opportunities, but we don't want to be buying at this highs so where you want to buy instead is again just overlay with the 50 period. Moving average and now things are much clearer. You notice that this market seems to be respecting the 50-day moving average. This is an area of value over here this black.

This i mean this thing that i've shaded over here, okay, so this means right. You want to market to retrace back down into this area of value, and then you look for buying opportunities right. This right will give you a much favorable risk to reward on your trade. Okay, another example.

If you look at kirkland same thing, do you want to be buying this stock at this highs over here? Well, you could right, but a much better option is to let it come to an area of value and again the 50-day moving average serves as an area of value notice, how it tested a number of times once twice twice almost fourth time, and here there's a Good chance it could find potential buying pressure at this area of value. Okay, one last example cvna, and this one to point out is that when you look at area of value on your chart, it's not a level. It's not a fixed price point. It's an area! So you can see that over here.

In this case the price did, you know whipsaw around this area value quite a bit because it's an area. So i want you to treat this as an area on your chart, not a fixed price point level. It's an area of value, and this is where you want to look for buying opportunities in an uptrend and that's what moving average can do for you second indicator that i want to share with you is the average true range indicator? Okay? Why is that? And it's very simple because average true range indicator: it helps you set a proper stop-loss, so you don't get stopped out of your trades too early. So, for example, i'm not sure if you know this has happened to you before, where you know you buy at support, then what happens is that the market bounce up higher dips down back below support hit your stop loss? You get stopped out here, one bit cross and then it rallies higher.

Has it happened to you before? If it does right, then you probably want to use this average true range indicator to prevent this from happening. So let me just share with you an example over here, so you see over here this this stock right t-r-i-l. Many traders will look at this right. Oh rainer, look at how bullish this stock is it's in an uptrend, rainer.

It came into this area of support. Then we have this green bullish close time to buy, let's buy rainer and then he buying the next candle open and where do they set their stop-loss? Oh right now the textbook says you say you should set your stop-loss below the lows of the candle, so you set it here. What happens market seems to know. Your intention seems to know where you put your stop-loss next thing, you know is that it triggers your stock and then rarely higher.

So how can you prevent this? How can you avoid this, and it's not difficult really, the average range indicator right can help you with it, and here's how let me share with you so before we get started. Average range is in essence, right. A volatility based indicator. Its value is derived by taking into account the range of the historical candle, so instead of you know, looking at the prices like the moving average, what it does is that it looks at the range of the past candle whether the range is tight.

Whether is it big small okay, so that's what it does. So how do you use this indicator? First and foremost, you want to identify the price structure. This could be something like a swing low. It could be support, it could be a moving average could be a trend line, etc.

This is basically right, an area of value right. This is what i mean by the price structure, the area of value that you are trading from number two. You want to set your stop loss, one atr below it and it's very simple. Let me just share with you how this works.

Let's say: you're trying to buy at support okay, so what you want to do is to identify the price structure. So, in this case, it's support. Next thing you want to do is to set your stop loss, one atr below it. So what you're going to do is to pull out your atr indicator, find out.

What's the value all right and then minus it from the lows of support? So let's say the lows of support: the value is x, your one atr value is y okay, so just take x, which is the lows of support, minus y and, let's say, z, algebra. I don't understand rayna and my head is hurting. Don't worry, let me give you an example. Okay, so again, let's have a look at this one here, this uh trillium therapeutic example.

So what i'm going to do is i'm going to pull out the average true range indicator: okay, okay. I use uh 20 period because there's 20 trading days in a month - and i use sma just you know - be consistent. Keep things simple. So we can see that right now the average true range is about a dollar and fifty nine cents.

I'm going to keep things simple, make it rounded up to a dollar sixty cents, as you can see over here, okay! So now, when the candle closed, bullishly higher, what i'm going to do is to find out what's the lows of this uh, this price point, because this is the lowest low at support. Okay, so let's say this lowest low is currently trading at about 11.61, as shown on trading view. So what i'm gon na do is to take eleven dollars and sixty one cents minus one dollar and uh. Let's do the 59 cents to make my life harder.

So what you're gon na do is that if my math right serves me right, the answer should be ten dollars and two cents. Trust me, i'm not good. In math, i'm just doing my math right now live as i am in front of this screen. You should be ten dollar and two cents, so your stop-loss should be at that level.

So i'm going to pull out the horizontal line. This one should be at ten dollars and two cents, two cents, okay. So this all right. Let me just walk you through from here this low to this pink line over here is, in essence, 1, atr and 180r.

The value is defined, as shown over here, a dollar and 59 cents. So what this tells you is that the historical volatility of this market over the last 20 days over the last 20 candles is about a dollar and 59 cents. This market moves an average of a dollar and 59 cents a day based on looking over the last 20 day prices. So let's give this this market, or rather give your trade some room to brief right based on this recent volatility.

So that's how you set your stop loss and if you do that right on hindsight, clearly you wouldn't have gotten stopped out okay. So this is how you use the moving average in your trading right. So this is pretty much it right. Identify the price structure identify the area of value that you're trading from and then set your stop loss 180 here below it.

Some traders want to be more conservative. You can use 1.5 atr or 280r. Some want to be. You know, having a tighter stop loss.

You can use 0.5 atr, it's entirely up to you right for me. Personally, i use one atr below the area of value. The third and final indicator i want to share with you is the rate of change indicator. Why? Because it helps you to filter down the best stocks to trade, because when you're trading stocks, let's say the u.s stock markets, there are like thousands of stocks out there and often you're gon na find two similar trading set up happening at the same time.

And you wonder to yourself man, which one should i choose? It's like you know, let's say two girls, all right like you at the same time and your feelings for both girls, but you do not know which one to choose, i'm pretty sure you would choose one over the other, based on a certain criteria that you have. Maybe one is meatier than the other. One is more intelligent. One is smarter, one dress better.

I i don't know. What's your criteria, that's your preference, but you basically have a ranking ranking criteria. Okay, but i guess a smart one would basically choose both girls, then both but anyway, you have a ranking criteria and it's the same for trading right. You have to have a ranking criteria to favor one stock over the other, even though they might have similar chart patterns that you're about to trade.

So that is what the rate of change indicator can help you with. So in essence, right. This indicator, the rate of change, is a momentum based indicator. It measures the percentage change in price.

So let me show you how to use this indicator to find the uh, or rather to filter down the best stocks to trade, and it's very simple. What you want to do is to filter stocks according to their 50 weeks rate of change. In essence, right, you want to ask yourself right, you know i'll just show it to you later right, filter stocks according to their 50 weeks roc and then focus on buying higher roc value stocks. So, for example, let me just share with you here.

If you look at the charts over here, let's say you have two similar trading setup. So let's say one is called kirkland right. It looks like a price is, at this swing, low, looking to bounce higher okay, you look at this green candle, and maybe you have another one. That is a cvna.

That looks something like let's say like this: okay, again similar setup price, you said: there's a swing low, looking to bounce higher so which one do you choose? Do you choose cvna, or do you choose kirkland? You might be spoiled for choice, so sometimes you might even have five or ten stocks which are behaving similarly. So what you want to do is to pull out your roc indicator, just gon na pull up roc rate of change. Click on this i like to use the weekly time frame to reference it over the last 50 weeks, so in essence, right what this tool does this indicator this 50 week roc indicator does, is that it tells you right over the last 50 weeks right. How much did this stock gain in price? How many percent did it get in price? So if you look at this right for cvna, it has gained 163 percent over the last 50 weeks - okay cool.

Now, let's compare it with kirkland so for kirkland at a point. In time it has gained gain 384 percent, big difference right. Kirkland is much stronger in terms of roc value. So with that in mind, what we're going to do is that, well, what i'm going to do is that i'll favor buying kirkland over cvna, that's how you use the roc indicator.

To kind of you know, filter for the best uh higher probability trading setup, and the reason for this is quite simple is because in the stock market, it's proven academically right that strong momentum, stocks, or rather stocks that have performed well over the last six to 12 Months, they tend to continue to outperform the market, okay, so this is why we are using this roc tool to help us filter out which stocks right are the stronger performing ones, and we are going to favor those stocks right over other stocks which are not as Strong or have a high or have a lower roc value, we don't want no stocks, we only focus on stocks which have the highest or the higher roc values. Okay, so that's how you do or use the roc indicator - and one thing to point out is that you want to avoid stocks right that are trending down low. When stocks are trending now lower, their roc value will probably be negative, avoid those stocks because they are in a downtrend, only focus on the strongest highest roc value stocks. These are the stocks which are the strongest and the higher have the highest, or rather have the strongest momentum, and it's the same for relationships.

You want to avoid girls that, have you know horrible past, or you know, cheating on boyfriends and stuff, like that. It's not going to end well so same for stock trading focus on the best ones, the strongest ones right, those with the best track record. So with that said right, let's do a quick recap to what we have discussed today: number one, the best stock trading indicators that i recommend is moving average. Why? Because it helps you to identify the direction of the train and to help you identify the area of value next one we talk about average.

True range indicator: how you can use it to set a proper stop loss, so you don't get stopped out of your trades too early. And finally, we spoke about the rate of change indicator to help you filter down right for the best stocks. You should focus on and by the way, if you've enjoyed you know. Such training on stock trading then go down to this website.

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