There are all kinds of indicators you can use that can help you with your trading decisions.

  • Momentum Indicators
  • Trend Indicators
  • Volume Indicators

The internet is full of all kind of complicated indicators and trading systems. The thing I believe in, is simplicity. Keeping it simple makes it easier to understand why your system gives a buy or sell signal.

knowing what parameters trigger your system makes it easierer to obey the system. That way you can ensure a consistent way of trading.

Just a few indicators that are often used:

  • Moving average . You can calculate moving averages on different time frames. If you take a shorter timeframe trend changes are signaled sooner, but more false alarms are given as well. 
  • MACD (Moving Average Convergence Divergence). The MACD is basically a refinement of the two moving averages system. The two moving averages system gives a signal when the short moving average crosses the long moving average. The MACD measures the distance between the two moving average lines. Signals are taken when MACD crosses its signal line, calculated as a exponential moving average of MACD.
  • ROC (Rate of Change). The Price Rate-of-Change (ROC) indicator displays the difference between the current price and the price x-time periods ago. The difference can be displayed in either points or as a percentage.
  • RSI (Relative Strength Indicator).The Relative Strength Index compares upward movements in closing price to downward movements over a selected period. Wilder originally used a 14 day period, but 7 and 9 days are commonly used to trade the short cycle and 21 or 25 days for the intermediate cycle. The RSI is a price-following oscillator that ranges between 0 and 100. Depending on the product overbought and oversold levels can be determined. Usually above 70 is seen as overbought and below 30 as oversold.
  • Parabolic SAR. The Parabolic Time/Price System is developed by Wilder. Parabolic SAR provides entry and exit points. A stop loss is calculated for each day using the previous days data. The advantage is that the stop level can be calculated in advance of the market opening.
  • Stochastics. The Stochastic Oscillator was developed by Dr. George Lane to track market momentum. The Stochastic Oscillator compares where a security's price closed relative to its price range over a given time period. The %K line compares the latest closing price to the recent trading range. The %D line is the signal line calculated by smoothing %K.

What is the next step for a profitable trading system

The best way to develop your own trading system is to buy technical analysis software and start back testing with different combinations of indicators. Examples of technical analysis software are TradeStation, WallStreet, MetaStock, Sinus, Amibroker, Vision2000, Hermes, Vestico and many more.

Personally I trade a few different markets with different time-frames. This way temporary draw downs in one market can be compensated by profits in the other markets. 

My advice is try to use indicators that make sense to you. Understanding and confidence is the key to successful trading. Even the simplest trading system can generate huge profits as long as you trade your trading system in a consistent manner.