A useful approach to technical analysis is to treat indicators as decision-support tools rather than prediction engines. Each indicator highlights a different aspect of market behaviour, and combining them thoughtfully often produces more reliable signals.
One of the most common mistakes is relying on a single indicator without understanding its assumptions. For example, moving averages help smooth price noise, yet they lag turning points. RSI can identify momentum extremes, but in strong trends it may stay overbought or oversold far longer than expected. MACD offers trend-momentum insights, though its signals are more meaningful when supported by clear price structure.
My preferred method is to read indicators in context. I look for confluence between trend direction, momentum shifts, and key support or resistance zones. When several tools point to the same conclusion, the probability of a successful trade improves. Above all, discipline and consistency matter more than any single indicator.
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