If you are new to NinjaTrader or trading, you’ll likely be perplexed by the available indicators. It’s exciting, but it can also be confusing. To help you with that, below are some of the NinjaTrader indicators that you might want to start exploring.
Ichimoku Cloud
The Ichimoku Cloud is a very flexible indicator. It can tell you a lot of things about the specific market. However, one of its popular uses is the ability to reveal support and resistance, overall momentum, and trend.
At its core, this indicator has five moving averages. From the five lines created by the moving averages, a “cloud” is extrapolated.
When the price of the pair or asset is higher than the cloud, an uptrend is present; when it is lower than the cloud, the bears are running the show. Furthermore, if the cloud follows the price, you can consider that there’s momentum behind the trend.
Volume-Weighted Average Price
This indicator is also known as the VWAP. The VWAP can be utilized to establish support and resistance levels and determine the daily average price.
At its core, the said indicator is just a moving average. However, your usual moving average only takes price and time into the calculation. The VWAP adds a way of incorporating trade volume into your typical moving average.
One way of using VWAP is for support and resistance. For example, the VWAP line might act as a support level if the price exceeds it. On the other hand, if the price is below the VWAP, the indicator may be used to act as resistance.
Fibonacci Retracement
Fibonacci retracement is based on the idea of the Fibonacci numbers. So if you are asking what’s the relation between such numbers to trading, well, it can be traced back to the golden ratio.
The golden ratio is derived using the Fibonacci numbers. And, if you look at nature, the arrangement of almost everything (leaves, waves, cone shell compartments, etc.) may seem random. However, it’s not entirely random, and the patterns mostly follow the golden ratio.
Some traders believe that the market seems chaotic at first but follow a pattern, and they believe Fibonacci numbers are the way to do it.
What sets the Fibonacci retracement indicator different is that it’s considered a “leading indicator.” This is because the indicator attempts to project where the next retracement will likely occur.
Pivot Points
You will see horizontal lines popping up the first time you load the pivot points into your chart. These lines are derived from the previous day’s or period’s close, low, and high.
In most cases, pivot points are used as possible support and resistance areas. Hence, if you have a strategy that revolves around using such areas, you can apply it using pivot points as your primary indicator.
Moving Average
One of the most popular indicators is the moving average. This indicator will place a curvy line in your chart. The line represents the average price in relation to a pre-determined time period.
There are plenty of ways of using the moving average indicator. However, most traders will generally use them as a trend indicator. For example, if the price is above the moving average, that would indicate a bullish trend and a bearish trend if the price is below the indicator.
Another popular way of using the moving average is it serves as dynamic support and resistance. So, for example, if you are on an uptrend and looking for a pullback entry, you’ll wait for the price to come back down to the moving average and then place your entry trade.
Keep in mind that there are already many moving average variations these days. However, the two of the most popular moving average variation is the Simple Moving Average and Exponential Moving average.
On-Balance Volume
This one is also known as the OBV. This indicator determines the trend direction based on the crowd’s emotion by calculating the negative and positive volume flow.
The basic premise of OBV is that if it rises, then the current trend is supported by the volume. Hence, it’s likely that the price will continue with the current trend.
On the other hand, if the OBV is decreasing, it may signify that even if the price continues its trend, the volume is not supporting it. Hence, there’s a chance that the trend is already in its last legs, and a reversal may happen soon.
Relative Strength Index
The Relative Strength Index, commonly known as RSI, is another prevalent indicator among traders. The RSI is a type of oscillator indicator. Hence, its top range is always 100, and the bottom range is always 0.
RSI is generally used to predict if the pair or asset is oversold or overbought. Generally, if the RSI goes above 80, most traders consider that the pair or asset is already in the overbought area. This could mean a consolidation or complete reversal is coming.
On the other hand, if the RSI falls below 20, most traders would consider that the pair or asset is already being oversold.
Moving Averages Convergence Divergence
This indicator is more commonly known as the MACD. The data is represented in a histogram with bars and with two lines. The histogram bar is just the difference between two moving averages.
MACD is commonly used to detect divergence in the pair or asset because many traders believe this is a strong signal that the trend is about to reverse. But, of course, if you are right and place your trade before the reverse happens, you’ll reap more significant rewards.
An example of divergence is when the price continues to create lower lows (downtrend), but the MACD is already registering two higher lows. Of course, this could also happen the other way around. This predictive ability of the MACD is among the reason why it’s among the best indicator for NinjaTrader.
Wrapping It All Up
NinjaTrader is an award-winning trading platform. One reason for that is because of the many indicators that are already built into the app. Furthermore, there are a plethora of user-built indicators that you can also use.
While the list above may be the best NinjaTrader indicators, it depends on how you use these tools. Of course, there are other indicators you can explore, but the list above should help you get the ball rolling.
