Imagine such a situation: if you could determine when you buy or sell your assets by watching just two lines, when one line crosses the other line, you buy. When the same line crosses the other line in a different, way you sell.

Eric asks:

John and Professor Jill together: Exactly!

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That will make life on a stock exchange much simpler. If this lines are somehow correct then this leads you to big future profits. So, the million dollar question is: How do you draw these lines? This line is an indicator and there are numerous and vary options to draw this lines in a way that provides you with the highest possible return.

Let us take a look at a sample of “the indicators’ power”.

The above chart presents SPDR Gold Trust Shares from August 2010 to the beginning of December 2010. We can observe a continuous positive trend since August and a massive fall in the middle of October. However there was an opportunity to avoid huge losses in our capital, this opportunity was a sell signal generated by the RSI indicator. As it can be clearly seen form the chart, following the signal could save your money. For more details concerning this example check our  Premium Update from October 15, 2010 .

Indicator uses price volatility to recognize patterns in the movements of stocks in order to find optimal moment for buying or selling it often including up and down volume, advance/decline data and other inputs. In other words, a stock indicator detects some repeatable situations on the market and thanks to that is able to predict how a particular stock will behave in the future. As a result of calculations, it generates signals which inform us about a level of overbought or oversold. A level of overbought tells us that the price change of a particular stock indicates that there is a small chance of further increase and encourages us to sell the stock. Analogically, a level of oversold tells us that the price change indicates that there is a small chance of further decrease and encourages us to buy the particular stock.

There is a lot of websites which provide you with the stock indicators. However their calculations are based on the formula which was invented a long time ago and it is adjusted to bring profits on all markets. Using standard version of indicators you will be doing quite well on the various markets. But what if there is some other version which will bring you enormous profits on the gold? Maybe is there some indicator that is especially reliable on the silver market but totally useless on the general stock exchange? Is this indicator efficient in the short term? How can I find modified version of it that brings me huge profits on the sell position? Moreover, having this information still does not guarantee high profits. There is always a need to monitor the whole optimization process, check its results and update it systematically.

Related terms:

Software programs designed to support decision process on multiple levels. Unlike  analysts. investment tools are completely unemotional and objective, which allows for diversification between these two sources of signals. Such diversification can substantially lower the risk (variability) without compromising profitability. In fact, if tools are accurate, investor’s and trader’s profitability can increase.

MACD (Moving Average Convergence/Divergence) – is a technical analysis indicator based on the discrepancies between moving averages calculated for different periods. Through the use of these moving averages, the MACD generates buy and sell signals.Because of its relatively easy-to-interpret signals, the MACD has become a popular tool among precious metals investors.

The Relative Strength Index (RSI) is one of the most popular technical indicators that can help you determine overbought and oversold price levels as well as generate buy and sell signals. RSI has proven to be quite useful for gold traders and investors .

RSI was developed by J. Welles Wilder, Jr. and published in a 1978 book, New Concepts in Technical Trading Systems. and in Commodities magazine (now Futures magazine) in the June 1978 issue. It is a momentum oscillator and as such it measures the rate of change of a given security’s price. Since it is also a bounded oscillator, it allows to spot overbought and oversold areas on the price chart.

One of special indicators offered exclusively by Sunshine Profits. This indicator is dedicated to precious metals markets and based on the use of unique properties of the market. Thanks to this approach SP Gold Bottom Indicator is able to spot divergences, clues and sign that many standard indicators overlook.