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1. lntroduction to Technical Indicators
' . Technlcal indicators help traders understand the overall condition sf the rnarket-
. They give information about trend strength, mornentum, and potentia! tuming points.
. lndicators do not predict the future.
. They support your decision and help you filter bad trades.
" Always combine them with structure, levels, and candlestick reading:
. ln this module we study
. Moving Averages
." RSI
. MACD
. And how to apply them on realcharts
2. Moving Averages
"
.
A rnoving auerage smooths out the price and helps !.ou see the general direction of the rnarket, v"ry
Sirnple Moving Average SMA d,-#rf
" Gives equalweight to every candle l
" Good for long term direction
" Comrnon settings 50 SMAand 200 SMA i** -Y/4ltu \t
" Helps read the rnajor trend clearly wd
" Exponentlal Moving Average EMA *
' Gives more weight to recent candles of,t Yirst
. Faster reaction to price changes rpr.lu4 = +'--
"
"
Common settinge I EMAand 20 EMA
Usefulfor intraday and swing trading pullbacks
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" How to Read MovingAverages
" Price above rnouing average shmrs a bultrish envlronrnent
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"
Frice below rnoving average shows a bearish environment
Two moving averages can alss be used together to show trencl shifis
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For example
lf a fast moving average crosses above a sla*v moving average
' it often signais rnomenturn moving upward rnft
" And the opposite for dovunward trends CrcSStr
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3. RSt
. Relative Strength lndex**
. RSI measures rnomentum-
. lt tells you if the market is moving toCI fast or losing strength.
' Key RSI Levels
. Above 70 often indicates price may be heated or extended upward
. Below 30 often indicates price rnay be stretched downward
. These levels do not mean buy or sell by themselves
. They are warnings of momenturn conditions
. RSlTrend Behavior
. RSI rising cenfirns price strength
. RSI falling confirms weakness
. When RSldisagrees with price, it creates divergence
. Divergence rnay signal a possible change in direction
. This works best on higher timeframes
4. MACD
. Moving Average Convergence Divergence**
. MACD is a momry-rtum and trend strength indicator.
' lt works using two moving averages inside it.
. I\FACD Components
' MACD line
. Signalline
. Histogram
. The histogram grclws and shrinks as momentum changes"
. How to Read MACD
. MACD line crossing above the signal line shows bullish momenfum
. Crossing below shows bearish mornenfuim
. When the MACD is above the zero line, the environment is usualty bullish
. Below zero line usually means bearish
. MACD helps confimr trend strengrth and momentum shifts.
5. Combining Xndicatcrs
Each indimtor has a spcifrc }ob Mo,nnE
aveffirges sfiew dir*ction
' RSI shows morfientum
c hTIACD confilrns strength
* A sirnple exafftptre flow
a ldentifu trend with moving average
o Check RSI far rnomentunn condition
c Check il{ACD far confirmation
o Then rnark you!: Ievels and look for a proper entry
c Indicators are support taols
. Price action and market [Link] rernain your prirTlary guides
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The general directien c$ the rnarket, up *r dcrsn-
g Confirrnation
When an indicator suppsrts what the price is already shc*ri*?*"
$TUmEftXT ffiAfERIAL
MODULEVII$
Rislt Management
7. Why Risk Management Matters
Risk management helps traders protect their account from unnecessary losses-
No matter how good the strategy is, losses will come. The goal is nat to avoid losses but to
control their size-
Key points
. Protect caPital first
. LoBg term survival in the market
. Keeps emotiorrs stable
. Helps develoP disciPline
. Reduces fear while tradiqg
. Builds confidence in decision maki*g
8" Risk to Reward Ratio {RRR)
RRR compares your potential loss to your potential gain"
Example
. Risk $10 to make $20 --* RRR = 'l:2
. Risk $20 to make $60 -' RRR = 1:3
Why RRR is imPortant
. You can stay profitable even with low win rates
. Prevents closing trades too early
. Helps you decide if a trade is worth taking
. Higher RRR improves long term results
Bad examPle ta avoid
. Risking $50 to make $10 -* deskoys account overtime
Positioru $izing
position sizing means choosing the cotrect trot size based om:
" Your account balance
" Your stop loss distance
'Risk percentage
'Lrlarket volatilitY
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. hlever risk a blg part of y*ur accs*nt in *ne trsds
e Maryr prafessi*nal traders risk 0"5 percent ta 2 percent per trade
Fosition sizing [Link] csncept
* Choose your risk amount {exarnple "l percent of account}
E ldentify stop loss plps
' Caicuiate the lot size that n:atches ycur aiioweri icss
o Enter trade only if everything aligns
Exarnpile
Account = 1S0O USD
Risk = 1 percent ---+ 10 USD
Stop loss = 2A pips
Lot size = chosen so that 20 pips = t 0 USD
$, Rxsk Ruiles and Discfptine
Dally [oss limlt
s When you reach your nnaxinnurn daily loss, st*p trading
s-osing streak natXe
e If you Isse 3 trades in a r*w, take a break, review and reset
S#as,ket sostdition rlsks
* Spread widening
a Slippage during news
a Overtrading an high voNatility
Discipline
. Stick to your risk plan
, Avoid impulsive decisions
. Consislency rnalters mere than speed
1 [Link] for $tudents
. Calculate for one chosen trade
. Account balance
. Percentage you decide to risk
. Stop loss size in pips
. Maximum risk amount
. Lot size you will use
. RRR of the trade Explain why the trade is valid.
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{, GLO$SARY - $dlodutre VIIf,
' Riek $#ana$emant
Process of controltring how rnuch rnsney y*u lose in the rTlarket-
o Risk to Rora*l netio (RRR,
A comparison shoving the size of potential reward versus potential risk.
' Fositisn Sizing
Choasing the l*t slze hased trn ysur risk a#l&rir*t ard stop ttlss.
. Stop Loss
A price level where the trade closes automatically to protect you from bigger losses.
o Risk Fercentage
The percent of your accou*t y*u decid* to risk per trade-
s Drawdsffiffi
Tenrp orary decline sf your ascount caused by trosing trades.
r Slippage
Difference between expected entry price and actual filled price during fast markets.
. Spread
Difference between bid and ask price- It affects your enlry and costs-
{r Volatility
How fast and how rfiush price xrlov*s.
. Daily Loss Limit
Maximum amount you allow yourself to bse in one trading day.