Hey hey: what's up my friends, so in today's episode i want to share with you: how do you combine right trading indicators like a pro because here's the thing right, i see many new traders when they get started in trading one of the first few things they Look for is indicators, radar indicators, you know moving average macd rsi and they wait for all these indicators right for all their signals to align right thinking that you know the more the indicators align the higher the probability of the trading setup right, but that couldn't be Further from the truth right, why is that? Well i'll, explain more in today's episode right, but first right before you get started in indicators right, you must understand one thing: you must understand right what indicators can be used for right indicators? There are many out there, but you have to ask yourself this question: what are those indicators built for? You know what are they used for so based on my trading experience right, most indicators right can be used for one of these four categories. Okay, the first category is indicators can help you identify market condition right whether the market is in the range, whether it's trending, whether it's in a low volatility, environment, etc. Number two indicators can help you better time. Your entry or other indicators can serve as an entry trigger right telling you that you know now it's time to enter a trade provided right.

The other market conditions are met. Okay, number three indicator site can also help you, or rather to signal to you when to exit a trade, especially whether you know you want to be riding a train or whether you going to capture a swing in the market. Indicators can also serve that purpose and the fourth category is this right. Indicators can help you identify areas of value on your chart, especially when the market is trending right, for example, in a healthy trend, i would say the 50 period moving average.

It's a it's. A very useful tool right to identify area of value right in this type of trending healthy trend, market, okay. So these are the four main categories of what indicators can be used for, and you must understand this okay, so once you understand this right, then the second thing right that you want to move on to is to understand the purpose of your indicators. So yes, most indicators right can serve one of those four purposes, but some indicators can serve all of these four purposes and some of these indicators can only meet one of those or two of these purposes.

So let me explain so, for example, uh fibonacci extension right. It's an indicator for me to me to me right: it's an indicator that can be used right to help you exit your trade, especially in trending market. When the market you know uh is on this uh trending move up higher right. When is you know, you know, a trend consists of a series of higher highs and higher lows right, it makes it goes up, comes down, goes up, comes down, goes up.

So when you are trading with this trend and as the market is going up right, you might want to you know, exit your trade before it makes a pullback. But we know where, where at what point in time right or which point of reference, do you use right to know? You know when to exit before the pullback occurs, so this is where uh the fibonacci extension tool can be useful. You can use. You know the 127 extension or the 138 extension right to help.

You know to signal to you like when to exit your trade right, so this is how a fibonacci extension tool is useful. On the other hand, you can use a tool like the average true range indicator that indicator serve multiple persons number one. It can help. You define the volatility of the market, whether you know volatility of the market.

Is you know historically? Is it high or low right? Now number two: using that volatility of the market information you can use right that figure to help you set better, stop loss. You can never use it to trail, your stop-loss or in a trending market, that's possible as well. So you can see that you know the atr indicator serves some multiple purposes and finally, a moving average. This indicator is even more versatile.

It can help you, you know uh, or rather you can. You know, meet all four of your categories that i've said earlier number. One moving average can help you identify the market condition whether is it trending or range number two moving average can help you act as an area of value as what i've shared earlier right. The using the 50 period moving average in a healthy trade number three moving average can help you serve as an exit right.

Basically, you can use it to trail. Your stop-loss right with the hopes of you, know, riding a trend: okay, uh. As for entry trigger, moving average can be like something like a moving average. Crossover can also serve as an entry trigger, so you can see right that you must understand the purpose of your indicators and see where it fits among the four categories.

Some indicators meet only one or two categories: some indicators like the moving average, can, you know, fulfill all four categories, so it pays to understand right. The purpose of your indicators. Moving on number three before you use any indicators, you have to know what you need. What do you need out of your indicators right? Because some of you might be a price action trader and then using indicators to kind of like supplement your your trading? For example, you you read the charts using you know.

The naked price section just make a chat to identify the current market condition, but you can use indicators to maybe let's say help. You manage your trade to know where to set a proper stop loss, or rather to know you know how to you know, trail your stop-loss with the hopes of writing a trend. So you have to know what you need in the first place right. What do you want out of your indicators? Because if you do not know what you want out of your indicators, then it's going to be a complete mess.

You just pick everything and anything that comes your way and your trading is it's hopeless, okay, and the fourth and final thing that i want to share with you all right. The fourth and final tip is this is that you only want to use one indicator from one category. So what do i mean by this? So, for example, let's say you are using moving average, for example right you want to use it to to manage your trades to exit your trade, to use it to trail your stop loss. Then that's fine.

You can use moving average, but don't use moving average. Don't use the chandelier crosstalk, don't use all these other fancy indicators right to help. You manage your trade, because this is where you're going to get conflicting signals. Okay, so just one indicator from one category: if you want to use an indicator to, for example, help you uh to access the entry trigger to enter your trade, then just use one indicator.

Maybe you know rsi crossing above 30. That's that's the indicator. Great! Don't don't use the rsi, don't use the stochastic. Don't use all so many indicators to to time your entry, because, again right, if you have too many indicators for one category, you will get conflicting signal.

Okay, so pay attention to that as well. Okay! So a quick recap right for today's episode. Number one know what your know the categories right, or rather the functions of what trading indicators can be useful. It can help you know, define market condition, identify area of value uh serve as an entry trigger exit.

Your trade events, okay, number, two know the types of indicator know the purposes of your indicators out there. This you know means that you have to really understand. You know what this indicator is about. You know how it works and stuff like that.

Number three know what you need. Okay, are you do you need help with you know, defining the trend. Do you need help with you know, entering your trade, so know what you need and then find the appropriate trading indicators for it and finally, finally, number four not more than one training indicator from each category. If not, you will get conflicting signals and you will be confused alright.

So with that said, i have come to the end of today's episode. I will talk to you soon. You.