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Oct 28, 2025
Good Trading Indicators: The Top 3 Beginner-Friendly Tools Every Stock Trader Should Know
Introduction – Why the Right Indicator Beats a “Hot Tip” Every Time
If you have just opened your first brokerage account—or you’ve already bought a few shares of AAPL or NVDA but still feel like you’re gambling—this guide is for you.
If you have read a couple of blogs, watched a few YouTube videos, and now want a simple, repeatable way to decide when to buy and when to sell US stocks, this guide is also for you.
Below you will learn three good trading indicators that professional analysts put on every chart, yet they take less than five minutes each to understand.
We will keep the language plain, use real-world examples from the S&P 500, and show you exactly how to add each tool to a free TradingView chart.
By the end you will know:
What each indicator measures
How to read its signal in one glance
One objective rule you can code or write down for your next trade
Where to grab a ready-made template so you do not start from scratch
The 3 Best Indicators for Beginner Traders in US Stocks
Moving Average (MA) – the “Trend Filter”
Relative Strength Index (RSI) – the “Momentum Alarm Clock”
MACD – the “Trend & Momentum Combo”
Moving Average: Find the Wind Before You Throw Your Paper Plane
What it is
A Moving Average (MA) is nothing more than the average closing price of a stock over the last X days. Plot that average every day and you get a smooth line that “moves” with the price.
Why it matters for US stocks
Large-cap names like MSFT or COST rarely move in straight lines. The MA removes daily noise and shows the true direction of the wind. Trading with the wind raises your odds immediately.
How to read it in plain English
Price above the MA = buyers are in charge → look for long setups.
Price below the MA = sellers are in charge → stay flat or short.
Price crossing the MA = the tide may be turning → watch for confirmation.
Beginner rule you can write on a sticky note
“Buy only if the last two daily candles close above the 50-day SMA. Exit if price closes back below it.”
Real example – AAPL, March 2023
AAPL closed above its 50-day SMA on 3-Apr-23 at $162. The stock never looked back and hit $198 in July, a 22 % run that matched the QQQ rally.
Pro tip for beginners
Add a faster 20-day SMA and a slower 200-day SMA. When the 20 crosses above the 200, institutions call it a “Golden Cross” – one of the most quoted bullish signals on CNBC.
RSI: Wake Up When a Stock Is Too Hot or Too Cold
What it is
The Relative Strength Index (RSI) is a 0-100 speedometer that tells you how fast price has risen or fallen during the last 14 bars.
Why it matters for US stocks
Tech giants like NVDA can gain 30 % in two weeks on AI hype, then give half back in days. RSI warns you before the party ends.
How to read it in plain English
RSI > 70 = “overbought” – the rally may pause or reverse.
RSI < 30 = “oversold” – the selloff may bounce soon.
RSI diverging from price = hidden weakness/strength. Example: price makes a higher high but RSI prints a lower high → uptrend is tiring.
Beginner rule you can code tonight
“If daily RSI drops below 30 and then closes back above 35, buy a half position. Sell when RSI crosses back below 70.”
Real example – TSLA, January 2024
TSLA’s daily RSI hit 26 on 25-Jan after earnings panic. Two sessions later it reclaimed 35 at $210. The bounce reached $250 in six trading days, a quick 19 % win.
Advanced twist
Switch to the 4-hour chart and use RSI 50-level as a trend filter: stay long while RSI > 50, flat below it. This keeps you on the right side of intraday momentum without over-trading.
MACD: the Swiss-Army Knife That Shows Both Trend and Momentum
What it is
MACD (pronounced “Mac-Dee”) is three lines derived from moving averages: the MACD line, the Signal line, and a histogram. It was created in the 1970s by Gerald Appel and remains a staple on every Bloomberg terminal.
Why it matters for US stocks
Because the MACD combines trend (from averages) and momentum (from subtractions), you get two layers of confirmation in one box. That saves screen space and mental bandwidth.
How to read it in plain English
MACD line crosses above Signal line = fresh buy momentum.
Histogram bars growing = momentum speeding up.
Histogram bars shrinking while price still rises = rally is losing steam.
Beginner rule you can back-test this weekend
“Buy when the MACD line crosses above the Signal line and both lines are above zero (positive territory). Sell on the opposite cross.”
Real example – SPY, November 2023
On 14-Nov-23 the SPY daily MACD crossed above the Signal while both lines stood above zero. SPY closed at $441. The index marched to $478 by year-end, printing an 8 % gain in six weeks.
Pro upgrade
Add the zero-line rule: ignore sell crosses that happen above zero if the 50-day SMA is still rising. This keeps you in winning trades longer and avoids whipsaws.
Putting It All Together – A Simple Playbook
Step 1 Open a daily chart of any S&P 500 name.
Step 2 Add the 50-day SMA, 14-day RSI, and default MACD.
Step 3 Check the order of signals:
Price must be above the 50-day SMA → wind at your back.
RSI should ideally have reset near 40-50 (not overbought).
MACD line crosses above Signal while above zero → green light.
Enter on the next candle’s open, set a stop 2 % below the recent swing low, and trail with the 50-day SMA. You now have an objective, repeatable plan that works on QQQ, AAPL, MSFT, COST, NVDA, or any liquid US stock.
Common Mistakes to Avoid – Save Your First $500 in Tuition
Using RSI alone in a raging bull market – overbought can stay overbought for weeks.
Ignoring the direction of the moving average – a flat MA gives false confidence.
Switching time frames mid-trade – stick to the chart you entered on unless your written rule says otherwise.
Free Resources & Next Step
You can copy the exact template above into TradingView in under 60 seconds.
If you want the coded version with automatic entry/exit arrows, position-sizing math, and a built-in earnings filter, we have packaged it for you.
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Key Takeaways – Print This Section
Moving Average tells you which side of the market to be on – long, short, or out.
RSI warns you when momentum is exhausted – perfect for timing entries after pullbacks.
MACD gives a two-in-one confirmation of trend plus momentum – great for final green-light entries.
Master these three good trading indicators, and you will never again ask random strangers on Reddit, “Is now a good time to buy?”
Your edge will be written, back-tested, and sitting quietly on your screen – every trading day.
Happy trading, and see you inside strataige.top!
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