Home Technical Analysis Chart Indicators: Analysed & Tested

Chart Indicators: Analysed & Tested

Chart indicators are tools traders use to predict the future direction of a stock’s price more accurately. They are used to analyze historical data and trends, such as price, volume, and momentum, so traders can decide which stocks to buy or sell.

Our articles provide a unique analysis of the reliability, success rates, and how to trade the most important stock chart indicators.

Chart indicators can be used to identify entry and exit points in the markets, as well as to measure potential rewards versus risks. With chart indicators, traders can better assess when to enter or exit a position more confidently.

Reading & Trading Volume Profile Indicators Like a Pro

Volume profile technical analysis indicators provide a uniquely detailed overview of volume distribution across price levels, offering traders insights into market structure and supply and demand zones.

Aroon Indicator Explained: Best Settings & Strategy Tested

In technical analysis, the Aroon indicator identifies trend reversals and trend strength. This oscillating indicator has two parts: the "Aroon Up" line measures uptrend strength, and the "Aroon Down" line for downtrend strength.

KDJ Indicator Explained: Best Settings & Strategy Tested

The KDJ is a stochastic oscillating technical analysis indicator that helps traders predict price reversals. According to our research, the KDJ has a 63% success rate if configured correctly.

Weighted Moving Average (WMA) Explained & Reliability Tested

Our research reveals the WMA underperforms other moving averages with only a 7% win rate on a standard OHLC chart. However, using it on Heikin Ashi charts produces excellent results.

RSI Indicator Explained: Best Settings & Strategy Tested

The Relative Strength Index (RSI) is an oscillating momentum indicator that measures the speed and change of stock price movements. RSI uses a scale from 0 to 100 to indicate overbought or oversold conditions.

Elliott Wave Theory: Usage, Rules & Reliability Tested

Elliott Wave Theory is a scientifically unproven technical analysis indicator used to attempt to predict price movements in financial markets. I highly recommend avoiding this indicator.

10 Best Free TradingView Indicators & How to Trade Them!

Our testing shows the best TradingView indicators for advanced analysis are Volume Profile HD, VWAP, Supertrend, ATR, Relative Volatility, and RSI. TradingView's candlestick and chart pattern recognition also improve trading outcomes. 

3 Top Momentum Indicators Explained & Tested

In technical analysis, momentum indicators help traders identify the strength and direction of a stock's price. We explain and test three popular momentum indicators for reliability.

Donchian Channels Indicator Explained & Profitability Tested

The Donchian Channels indicator in technical analysis helps traders understand market trends and potential price breakouts. It consists of three lines formed by taking the highest and lowest low of a predetermined number of periods, typically 20.

ATR Indicator: Settings, Reliability & Usage Tested

The average true range (ATR) is a nondirectional momentum indicator that measures price volatility. Our 1,205 test trades showed a solid 1.77 reward-to-risk ratio with an average 8.5% winning trade.

VWAP Indicator: 13,681 Test Trades Prove the Best Settings & Strategy

Using VWAP with a 14 setting on a daily Heikin Ashi chart is vastly superior to conventional OHLC charts. Using an OHLC chart, the strategy barely breaks even with a low-profit expectancy of 0.15. In contrast with a Heikin Ashi chart, the strategy is incredibly profitable, with a profit expectance of 0.83 and a reward-to-risk ratio of 3.03.

Is the Supertrend Indicator Super? 4,052 Test Trades Show How to...

Based on our extensive testing, it has been determined that when used as a standalone indicator, Supertrend does not demonstrate reliability or profitability. With an average profit expectancy of 0.24, it is recommended to combine Supertrend with other indicators.

OBV Indicator: Best Settings & Trading Strategy Explained

On-balance volume (OBV) is a cumulative indicator in technical analysis designed to show the volume flow relative to a security's price movements. The OBV reflects the collective buying and selling pressure crystallized through the volume trend.

How to Trade the DMI Indicator Profitably: 9,764 Trades Tested

Our testing, based on 9,764 trades over 25 years, proves the DMI indicator is profitable and reliable, outperforming the S&P 500 index.

ADX Indicator: Best Settings & Trading Strategy Explained

According to our in-depth testing, an ADX(DMI + 14) setting crossing above 20 is a profitable buy signal, and crossing below 20 is a reliable sell signal. These settings resulted in an ADX 28% outperformance versus the S&P 500 stocks.

10 Best Day Trading Indicators Proven with Data!

Our research on 10,400 years of exchange data shows the best day trading indicators are the Price Rate of Change, VWAP, Weighted Moving Average, Hull Moving Average, Simple Moving Average, and RSI.

Mean Reversion Trading Strategy Explained with Examples

The mean reversion trading strategy suggests prices and returns eventually move back toward the mean or average. Reliable indicators like Stochastics, RSI, and Bollinger bands are based on mean reversion to identify overbought and oversold conditions.

How to Trade the McClellan Oscillator: Advanced Strategy

The McClellan Oscillator is a technical analysis tool designed to assess the market breadth of the New York Stock Exchange (NYSE). It is renowned for its effectiveness in revealing the underlying strength or weakness of the market by comparing the number of advancing to declining stocks.

Do Pivot Points in Stocks Work? We Test 66,480 Trades To...

Traders utilize pivot point indicators to predict when stock prices will reverse direction. But does it work? I tested 66,480 trades on 210 years of data, and the results are surprising.

How to Trade the Money Flow Index (MFI) Indicator

To optimally trade using the MFI indicator, traders should look for overbought, oversold, and divergence conditions as key signals. For the best results, consider backtesting your strategy.

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MetaStock Review 2024: Charts & Analysis Fully Tested!

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