The 5 most accurate indicators for traders

Modern traders need to understand that reading the market with Technical Analysis is no longer difficult if you have the right tools. Currently, there are many technical indicators to choose from, but limiting yourself to only the 5 most reliable ones is a smart strategy. This article will introduce the indicators used by Thai traders, including Moving Average, RSI, MACD, Volume, and Visible Range, to help you understand how to use each one.

Comparing the 5 Indicators

Moving Average: Price Moving Average Line

Moving Average (MA) is a core indicator used by top companies to observe the asset price trend—whether it’s bullish, bearish, or sideways.

How to Use

• When the price is above MA → Bullish signal, prepare to buy
• When the price is below MA → Bearish signal, prepare to sell

There are several types of MA, including Simple Moving Average (SMA), Weighted Moving Average (WMA), and Exponential Moving Average (EMA). EMA is the most popular because of its accuracy in reflecting current prices.

Calculation Method

Moving Average is calculated from the average of past prices. For example, MA 5 means the average price of the last 5 days. Generally:

• Short-term: MA 5 (about 1 week)
• Medium-term: MA 35 (about 2 months)
• Long-term: MA 200 (about 1 year)

Trend confirmation: If short-term MA > medium-term MA > long-term MA → Uptrend; if short-term MA < medium-term MA < long-term MA → Downtrend.

Advantages

• Easy to use and clearly visible
• Good for dynamic support and resistance

Limitations

• Lagging indicator; signals are delayed compared to actual price
• Often gives false signals in sideways markets

RSI: Indicator of Price Change Strength

RSI (Relative Strength Index) measures price momentum to see if the price is Overbought (overbought) or Oversold (oversold), with values between 0-100.

How to Use

Standard values: 30 and 70

• RSI < 30 → Overbought, oversold, buy strategy
• RSI > 70 → Overbought, sell strategy

RSI also helps identify price reversals. When combined with other indicators, its accuracy in decision-making for entry and exit points increases significantly.

( Calculation Method

RSI = 100 - [100 / (1 + Average Gain / Average Loss)]

Where:

• Average Gain = average of gains over the past 14 bars
• Average Loss = average of losses over the past 14 bars

The 14-bar period is standard, but traders can adjust it according to their trading style.

) Advantages

• Accurate for short-term entry and exit points
• Excellent for spotting divergence signals

( Limitations

• In strong trends, RSI may stay overbought or oversold for a long time
• May cause traders to sell too early or miss long-term trend opportunities

MACD: Convergence and Divergence of Moving Averages

MACD )Moving Average Convergence Divergence### is a powerful indicator that shows both trend and momentum. It is based on comparing two EMAs with different periods.

( How to Use

• MACD > Signal Line → Bullish, uptrend, buy strategy
• MACD < Signal Line → Bearish, downtrend, sell strategy

Buy and sell signals occur when the MACD line crosses the Signal line.

) Calculation Method

• MACD Line = EMA###12### - EMA(26)
• Signal Line = EMA 9 of MACD Line

Using closing prices over 12, 26, and 9 days respectively.

Advantages

• Comprehensive, indicates both trend and momentum
• Highly reliable

Limitations

• Complex calculation; may be difficult for beginners
• Lagging indicator; signals come after price movement

Volume: Trading Volume as Confirmation

Volume is the trading amount of an asset. This indicator helps confirm whether price changes are genuine or just short-term adjustments.

According to Technical Analysis principles, if the price breaks resistance with high volume, the breakout is genuine, and the price may continue to move.

( How to Use

Price Rising:

• Price up + Volume up → Strong bullish move
• Price up + Volume down → Weak bullish move

Price Falling:

• Price down + Volume up → Strong bearish move
• Price down + Volume down → Normal bearish move

) Calculation Method

Use the trading volume shown in the candlesticks over your selected (Timeframe).

Advantages

• Confirms the reliability of price action
• Helps detect strong support/resistance break points

Limitations

• Cannot indicate price direction alone
• In Forex markets, volume data may not represent global activity, only broker data

Visible Range: Visualizing Price Density

Visible Range ###Volume Profile### is an indicator derived from volume that shows where most investors have their cost basis. This data helps identify clear support and resistance levels.

( How to Use

• Price > Visible Range → Uptrend, buy strategy
• Price < Visible Range → Downtrend, sell strategy

Visible Range displays the price levels with the highest trading volume, indicating strong market zones.

) Calculation Method

Calculated from the average trading price over a specified period.

Advantages

• Visualizes the true market cost, more accurate than normal trend lines
• Helps find significant support and resistance

Limitations

• Charts may look complex; difficult for beginners
• Some platforms may charge extra for this feature

Summary and Recommendations

These 5 indicators are considered the most accurate for traders today. However, choosing which indicator to use depends on your trading style and the assets you select.

Before live trading, perform backtesting to verify whether the chosen indicator suits the asset. Also, establish clear entry and exit plans, and set Stop Loss / Take Profit levels.

Remember, indicators are tools to assist, not guarantees. Market analysis, risk management, and discipline are essential for long-term success.