http://www.wealthchaperone.com/videos/indicators/ There are two types of indicators. Trend indicators, used when the stock is trending and sideways indicators, used when the stock is moving sideways. The trend indicator MACD (Moving Average Conversion Diversion) is explained in this video. It was formed by Gerald Apple and indicates a get ready signal. Mr. Apple took note that as the two moving averages moved further apart the stock was in a stronger trend. As they got closer it was a signal that the trend may change. Stocks can move sideways. In this case we would use indicators that perform well with sideways stocks. An example of these indicators would be stochastics. The basic idea is that they will look back in time to find highs and lows in the stock while it was moving sideways and when they reach those areas again the indicator will give a buy or sell signal.
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