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Guide to the Top 8 NinjaTrader Indicators

The available indicators will likely confuse anyone new to NinjaTrader and trading. Although it’s thrilling, it can also be confusing. Below are some NinjaTrader hands you might be interested in exploring.

Ichimoku Cloud

The Ichimoku Cloud indicator is very flexible. It can reveal a lot about a specific market. It is used to identify support and resistance, momentum overall, and trends.

This indicator consists of five moving averages. Extrapolating the five moving average lines to create a « cloud » is possible.

An uptrend occurs when the asset or pair’s price is higher than the cloud. Conversely, the bears are in control if it is lower than the cloud. If the price follows the cloud, it is possible to consider the trend has momentum.

Volume-Weighted Average Price

This indicator is also known as the VWAP. You can use the VWAP to determine the daily average price and establish support and resistance levels.

The indicator itself is a moving average. Your usual moving average takes only price and time into account. You can also incorporate trade volume into your moving average with the VWAP.

VWAP can be used for support or resistance. If the price is higher than the VWAP, then the VWAP line could be used as a support level. The indicator can also be used as resistance if the price falls below the VWAP.

Fibonacci Retracement

Fibonacci retracement relies on the concept of the Fibonacci numbers. If you’re wondering what the relationship between these numbers and trading is, it can be traced back to the golden ratio.

Fibonacci numbers are used to calculate the golden ratio. If you look at nature, almost everything is arranged in a certain way (leaves, waves, and cone shell compartments). It may seem random. It’s not random. The patterns almost always follow the golden ratio.

Some traders believe the market is chaotic initially but follows a pattern. They believe Fibonacci numbers can help them do this.

The Fibonacci retracement indicator is unique because it is considered a « leading indicator. » This indicates that the indicator attempts to predict where the next retracement is likely.

Pivot Points

When you load the pivot points to your chart, horizontal lines appear. These lines are calculated from the close of the previous day or period, as well as the low and high.

Most pivot points can be used to identify support and resistance areas. If you have a strategy based on these areas, pivot points can be used as your primary indicator.

Moving Average

The moving average is one of the most well-known indicators. This indicator will place an arrow in your chart. This line shows the average price over a pre-determined period.

The moving average indicator can be used in many ways. Most traders use the moving average indicator as a trend indicator. If the price is above the moving mean, it would be a bullish sign; below the indicator; it would be a bearish sign.

The moving average can also be used as dynamic support or resistance. If you are looking for a pullback entry in an uptrend, wait for the price of the moving average to fall before you place your trade.

There are many variations of moving averages available today. The exponential and simple moving average is the most common satisfying average variations.

Volume on-Balance

This indicator is also known as the OBV. This indicator calculates the volume flow and the negative volume flow to determine the trend direction.

OBV’s basic principle is that if the price rises, the volume will support the current trend. The current trend will likely continue. Thus the price will remain the same.

However, declining OBV may indicate that the volume is not supporting the price trend. There is a possibility that the trend may be ending soon, and it could reverse.

Relative Strength Index

Another popular indicator is the Relative Strength Index (RSI). The RSI indicator is a type oscillator. Its maximum range is 100, and its bottom content is 0.

The RSI can determine if a pair or asset is oversold or underbought. Generally, traders will consider that the purchase or team is in the overbought zone if its RSI exceeds 80. This could indicate a consolidation or complete reverse.

However, traders will consider the asset or pair oversold if its RSI falls below 20.

Moving Averages Convergence Divergence

This indicator is also known as the MACD. The data are represented as a histogram with bars and lines. The difference between the two moving averages is the histogram bar.

MACD is often used to detect divergence between assets or pairs. Many traders believe this is a strong indicator that the trend is about to reverse. However, if you are correct and place your trade before the reverse occurs, you will reap greater rewards.

Divergence occurs when the price keeps creating lower lows (downtrend) while the MACD already registers two higher lows. This could happen in the opposite direction. The predictive power of the MACD is one reason it’s a NinjaTrader favorite indicator.

Wrapping it All

NinjaTrader is an award-winning trading platform. The app has many indicators built in. You can also create your hands.