As a trader, you’ll need to familiarize yourself with some of the best TradingView indicators to help you make informed decisions. Whether you’re just starting or are a seasoned professional, understanding how to read and apply these indicators can improve your strategies and boost your trading performance.
I’ve spent a considerable amount of time using TradingView and currently trade a strategy that is a combination of several indicators as well as price action and so as you can imagine, I’ve experimented with most indicators. Below, I’ll introduce you to the top 15 TradingView indicators that I personally find most effective. I’ll explain how each works, what it indicates, and how you can use them in your trading strategy.
What are the Top TradingView Indicators?
1. Moving Average (MA)
The Moving Average is a fundamental indicator that smooths out price data by calculating the average price over a specific number of periods, such as 10, 50, or 200. This makes it easier to spot the direction of the trend without being distracted by price volatility.
What it means: When the price is above the MA, it generally indicates an uptrend, while below it indicates a downtrend. MAs can also act as dynamic support and resistance levels, as price often reacts to these lines.
Types of Moving Averages:
- Exponential Moving Average (EMA): Gives more weight to recent price data, making it more responsive to current price movements.
- Simple Moving Average (SMA): A straightforward average over a specified period.How to use it: I typically use the 50-day and 200-day MAs together. If the 50-day crosses above the 200-day (a “golden cross”), it can be a bullish sign, while a cross below (a “death cross”) is bearish.
How to use it: I use the 200-day MA for long-term trend identification and the 50-day MA for short-term trends. The crossover between these two is especially significant—known as the “Golden Cross” (bullish) or the “Death Cross” (bearish).
For reference, I will include the MA in most of the images as this is the simplest indicator and can help ground your understanding in this fundamental principle – rather than simply viewing a random chart.
2. Relative Strength Index (RSI)
The Relative Strength Index (RSI) is a momentum oscillator that ranges from 0 to 100, showing whether an asset is overbought or oversold.
What it means: An RSI above 70 suggests that the asset may be overbought and due for a correction, while an RSI below 30 indicates oversold conditions, suggesting a potential buying opportunity.
Divergence: One powerful aspect of RSI is its ability to spot divergences. For instance, if the price makes a new high but the RSI doesn’t, it could indicate weakening momentum and a potential reversal.
How to use it: RSI is excellent for timing trades. I usually use it in conjunction with other indicators to avoid false signals. For example, when the RSI falls below 30 and begins to rise, I might look for bullish confirmation from another indicator before entering a trade.
3. Moving Average Convergence Divergence (MACD)
The MACD is a trend-following momentum indicator that shows the relationship between two moving averages of a security’s price. It consists of the MACD line (the difference between a 12-period EMA and a 26-period EMA) and the signal line (a 9-period EMA of the MACD).
What it means: When the MACD line crosses above the signal line, it’s considered a bullish signal. If the MACD crosses below the signal line, it’s bearish.
How to use it: I use MACD to confirm trends. It’s excellent for timing your entry into a trade. For instance, if I’m already seeing bullish momentum and MACD crosses up, that gives me additional confidence to enter the trade.
4. Bollinger Bands
Bollinger Bands consist of a central moving average and two outer bands representing standard deviations from the average. They help traders measure market volatility and identify potential reversal points.
What it means: When price touches the upper band, it’s considered overbought, and when it touches the lower band, it’s oversold.
Fun fact: John Bollinger, who created this indicator, emphasized that price touching the bands is not a buy or sell signal on its own but a sign of increased volatility. The bands expand during high volatility and contract during low volatility.
How to use it: I like to use Bollinger Bands to catch reversal trades. If the price touches the upper band and then starts to fall back toward the middle band, it could be a signal to sell. Likewise, touching the lower band followed by a reversal can signal a buying opportunity.
5. Fibonacci Retracement
The Fibonacci Retracement tool is based on the Fibonacci sequence, a mathematical pattern found in nature and financial markets. It helps traders identify potential support and resistance levels by measuring price retracements.
What it means: Common retracement levels include 23.6%, 38.2%, 50%, 61.8%, and 78.6%. These levels act as areas where the price may reverse or consolidate before continuing its previous trend.
Caveat: I like to use the common fibonacci levels but some other markets also have different levels that they respond to – you should do your own research to see if there are other retracement levels that a particular commodity reacts to – that’s all i’ll say on that!
How to use it: I use Fibonacci retracement to set entry points during pullbacks in a trend. If a stock is trending up, I wait for it to retrace to the 50% level (or lower) before buying.
6. Average True Range (ATR)
The Average True Range (ATR) measures market volatility by calculating the average range between the high and low prices over a specific period. It helps traders assess how much an asset is expected to move.
What it means: A higher ATR indicates more volatility, while a lower ATR suggests less volatility. However, ATR doesn’t indicate the direction of the trend.
How to use it: I use the ATR to set stop-loss levels based on current market conditions. For example, if the ATR is high, I’ll set wider stops to account for increased volatility, preventing me from getting stopped out prematurely.
7. Parabolic SAR
The Parabolic SAR is a trend-following indicator that places dots above or below the price. It helps traders identify potential entry and exit points by marking the direction of the trend.
What it means: If the dots are below the price, it indicates an uptrend. If they are above the price, it suggests a downtrend.
How to use it: I used to use the Parabolic SAR to help set trailing stops. As the trend continues, the dots move closer to the price, which helps me lock in profits as the price moves – however, as i sometimes trade volatile markets it can be a false flag.
8. Ichimoku Cloud
The Ichimoku Cloud is possibly the most complex – or some would say comprehensive indicator and is primarily useful for JPY pairs as it was identified in Japan and is still used by day traders there. It’s an all-in-one indicator that provides insights into support, resistance, trend direction, and momentum.
What it means: Simply: When price is above the cloud, it’s bullish; when below, it’s bearish. The Ichimoku Cloud consists of five lines: Tenkan-sen (Conversion Line), Kijun-sen (Base Line), Senkou Span A (Leading Span A), Senkou Span B (Leading Span B), and Chikou Span (Lagging Span). The “cloud” is the space between Senkou Span A and B.
How to use it: Again, it’s something i used to use when trading JPY pairs, which aren’t really a big component of my trading nowadays although I know some traders love it! I used to use Ichimoku to identify not just the trend but also key support and resistance zones. If the price is inside the cloud, it’s typically a no-trade zone due to indecision in the market. But if it breaks through the cloud with conviction, it could signal a strong bullish or bearish trend.
9. Stochastic Oscillator
The Stochastic Oscillator is a momentum indicator that compares a particular closing price to a range of its prices over a certain period of time. It ranges from 0 to 100, and like the RSI, it indicates overbought or oversold conditions.
What it means: Similar to RSI, it identifies overbought and oversold conditions. A value above 80 is considered overbought, while below 20 is oversold. However, just like with other oscillators, overbought does not necessarily mean an immediate sell, and oversold doesn’t imply an immediate buy.
How to use it: I often use this in sideways markets. If I see the Stochastic Oscillator falling below 20, I look for a buying opportunity, and if it rises above 80, I prepare to sell. Another effective strategy I use is the Stochastic crossover. When the %K line crosses above the %D line in the oversold zone, it could be a buy signal, and vice versa for a sell signal in the overbought zone. I will combine this with other indicators like the MACD for confirmation.
10. Volume Profile
Volume Profile shows the amount of trading activity at different price levels.
What it means: High volume at a particular price level can indicate strong support or resistance.
How to use it: I like using the Volume Profile to identify areas where a lot of trading has occurred, as it often acts as a magnet for future price movement.
11. On-Balance Volume (OBV)
On-Balance Volume (OBV) measures the cumulative buying and selling pressure by adding volume on up days and subtracting volume on down days.
What it means: If OBV is rising, it suggests that smart money is flowing into the asset, even if the price hasn’t moved much yet. A falling OBV, on the other hand, indicates distribution and potential future declines in price.
How to use it: OBV is great for confirming trends. If I see OBV rising alongside price, I’m more confident in the uptrend. For example, if the price is making higher highs but OBV is flat or declining, it might signal that the rally is running out of steam and could soon reverse.
12. Chaikin Money Flow (CMF)
Chaikin Money Flow uses volume and price to gauge buying and selling pressure. It uses both price and volume to assess whether an asset is under accumulation (buying pressure) or distribution (selling pressure). This indicator ranges between -1 and 1, where positive values suggest buying pressure and negative values suggest selling pressure.
What it means: If CMF is above zero, it indicates buying pressure; below zero, it indicates selling pressure. A high CMF value indicates that the asset is being accumulated (strong buying pressure), while a low or negative CMF value suggests distribution (strong selling pressure).
How to use it: I like using CMF to confirm breakouts. If CMF is positive and price breaks above a key resistance level, it adds confidence that the breakout is real.
13. SuperTrend Indicator
The SuperTrend indicator is a trend-following tool that adjusts its position based on volatility. It’s based on the average true range (ATR) and works like a dynamic stop and reverse system. Supertrend is plotted above or below price depending on the trend direction. A buy signal is generated when the price crosses above the Supertrend, and a sell signal is generated when it crosses below.
What it means: When the price closes above the SuperTrend line, it indicates a buy signal, while closing below indicates a sell signal.
How to use it: I use the SuperTrend as a trailing stop in trending markets. It helps me stay in a trade longer by keeping me on the right side of the trend.
14. Pivot Points
Pivot Points are a well-known indicator in technical analysis used to determine support and resistance levels. They are calculated based on the high, low, and close of the previous trading period (day or week). Pivot Points help traders identify potential reversal or breakout zones.
What it means: The pivot point itself acts as a major support or resistance level. Prices above the pivot point are considered bullish, while prices below the pivot are bearish. Additionally, there are support (S1, S2) and resistance levels (R1, R2) that provide key areas where price might pause or reverse.
How to use it: Frankly, I don’t use them anymore but when i did they were actually pretty good – I don’t know whether it was just noise or not but you can backtest it for yourself.
15. Donchian Channels
Donchian Channels are created by plotting the highest high and the lowest low over a specified period. The channels consist of three lines: the upper band marks the highest high over a specified period, the lower band marks the lowest low, and the middle line represents the average of the two.
What it means: When the price breaks above the upper channel, it suggests a potential bullish breakout, and below the lower channel, a bearish breakout.
How to use it: Again, not something I actively use but it used to be popular particularly in the 80’s with the Turtle Traders – if you don;t know about then have a quick google, essentially they were trend traders who ended up being quite successful.
Final Thoughts
When developing automated trading strategies, combining multiple indicators can create a more robust and well-rounded system. The key is to use complementary indicators that confirm each other, rather than using too many indicators that provide redundant information.
For example, a trend-following indicator like the Supertrend can be combined with momentum oscillators like the RSI or MACD to filter out false signals. The Supertrend might tell you that the market is in an uptrend, but using the RSI to identify overbought conditions can help you avoid entering the market just before a reversal. Additionally, you can use OBV or Volume to confirm that there’s enough momentum behind the price move.
When automating a strategy, I recommend testing different combinations of indicators and settings to see what works best for your particular asset class and trading style. For instance, a simple automated strategy could trigger a buy when the price is above the Supertrend, the RSI is above 50, and the OBV is rising. Similarly, you could program a stop-loss based on the Average True Range (ATR) to ensure that you’re protecting against excessive volatility.
The beauty of platforms like TradingView is that you can backtest these combinations over historical data to see how they perform in different market conditions. With the right blend of indicators, you can build a powerful automated system that not only helps you enter trades at the right time but also manages risk effectively. Happy trading!
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James is a former FTSE100 AI Director and trader with 10+ years trading his own capital. He is the Managing Director of SpreadBet.AI and currently trades his own capital through both CFD trading & spread betting as well as working with one of the leading prop firms in the world.
