Technical analysis is a valuable tool for natural gas and crude oil traders. It provides a method for looking at past market data to help forecast future price movements. Using distinctive tools, trading indicators, and charts traders are able to discern vital price patterns and market trends, and afterward utilize that information to identify optimal trade entry and exit points and targets at which trade profit should be taken.

Technical analysis varies from fundamental analysis, which looks at the impact of related economic and financial factors, for example, weather and gas inventories, on prices.

Where the latter technique helps shape traders’ initial assumptions about possible price movements within specific periods, the former technique helps the traders determine the right timing for their decisions.

This article examines Moving averages, MACD, and the RSI, three popular traditional indicators that are available for anyone to use:

Moving Averages

It’s unbelievable how helpful a simple Moving Average can be. Being a trend following indicator, a moving average helps smooth historical prices and does away with arbitrary fluctuations. There are three prevalent types: simple moving averages (SMA), weighted moving averages (WMA), and exponential moving averages (EMA). While SMAs are normally thought to be better at determining support and resistance levels, EMAs are highly responsive to price changes and are typically used for tracking a trend’s direction or entry and exit signals.

Moving Average Convergence/Divergence (MACD)

Another valuable technical indicator from the moving average family is the moving average convergence/divergence. This indicator is used for discerning variations in price direction, momentum, and duration of a price trend. The MACD is a momentum oscillator generated by subtracting a longer EMA from a shorter EMA. A signal line is also calculated by taking a nine-period average of that value.

The rationale behind the MACD is the same as the rationale behind EMA analysis. When a MACD line falls below a signal line, this is a bearish signal and, on the other hand, when the signal line overcomes the MACD line, the signal is bullish.

There are also other types of more advanced signals generated by the MACD, which are beyond the scope of this brief article.

Relative Strength Indicator (RSI)

Relative strength indicator is a momentum indicator and is among the most widely used indicators in technical analysis. It oscillates in the scale of 0 to 100, quantifying the correlation between average gain and average loss, depending on the closing prices of a recent trading period. One core function of this indicator is to help learn about the overbought and oversold conditions of an asset. For instance, when the RSI surpasses level 70 the natural gas will be regarded as overbought. Or, if the RSI falls below level 30 the natural gas will be deemed to be oversold.

Conclusion

Despite the fact that trading is a complex procedure that requires traders to have a lot of common sense, alertness as well as detailed market knowledge, the trading indicators we have discussed make this task very easy technically. These technical indicators are a popular choice of most traders. There are also many other technical indicators on the market, such as the KasePO, KaseCD, and Kase Easy Entry System (KEES), all part of the popular Kase StatWare package, that are much more powerful than even these.

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