Learn about two powerful trading view indicators: TMA overlay and Divergence. Make some adjustments in the settings and add EMA to increase accuracy. Set stop losses and targets for successful trades.

Two Powerful TradingView Indicators That Will Boost Your Profits in 2023 and Beyond

Introduction

When it comes to trading, having the right tools in your arsenal can make all the difference. In this article, we will explore two TradingView indicators that can help you identify powerful trading signals that can lead to big gains in your account.

Indicator 1: TMA Overlay

The TMA Overlay is a powerful TradingView indicator that helps identify momentum in the market by offering a visual representation of engulfing Candlestick patterns overlaid with smoothed moving averages.

Adjusting Settings

Before using the TMA Overlay, it is recommended to make some adjustments in the settings. Specifically, disable the trade sessions and these types of candlesticks.

Interpreting Buy and Sell Signals

Green and red triangles in the TMA Overlay indicate buy and sell signals respectively. For a buy signal to appear, three bearish candlesticks in a row must be formed in a market. The opposite is true for a sell signal.

Market Trend

The TMA Overlay also helps identify market trend. When the moving averages are aligned in a way so that on the top goes wide then it goes green yellow and red, the market is officially in an uptrend. On the other hand, when the moving averages are aligned in a way so that on a top goes 200 and then it goes 150 and 21 SMA, the market is officially in a downtrend.

Strategy

The TMA Overlay can be used to create various trading strategies, one of which is almost never wrong. For this strategy, add the Neglected Volume indicator to the chart as well. When the trend changes from bullish to bearish and a three-line Strikes bullish signal is printed on a chart, check the volume indicator for a positive volume in the market.

Entry and Exit Rules

To enter a market using this strategy, a trader must fulfill three conditions:

1. A change in trend from bullish to bearish must occur when the three moving averages cross the 200 SMA for the first time, signaling a bullish trend.
2. A bullish three-line strikes button must be printed on the chart, and the price should be fully above the moving averages.
3. Finally, check the volume indicator for a positive volume in the market. If the bar is green, it is a signal to buy.

One more important rule to mention is that no long trades should be taken after the 21 SMA crosses below the 50 SMA.

Examples of Successful Trades

Here are a couple of examples where traders fulfilled the above conditions and had successful trades:

1. A change in momentum from bearish to bullish is evident, and the moving averages show that it hasn’t crossed since. A bullish three-line strikes button is also confirmed by volume.
2. The bearish trend had just been established, and the indicator had printed a bearish signal, confirming the volume bar for short trade.

Indicator 2: Divergence

The Divergence indicator is another TradingView tool that checks every single candle for different divergencies among multiple indicators such as MACD, RSI, and more.

Interpretation

When a bullish divergence is found, a yellow label is printed on a chart. A dark blue label is printed above the price when a bearish divergence is found. The more indicators that concurrently diverge, the stronger the signal.

Strategy

To improve our trading accuracy, add the exponential moving average to the chart and change its length from 9 to 200. The best time to buy is when the market makes a pullback into the exponential moving average, and at least two indicators concurrently show a bullish divergence.

Entry and Exit Rules

Traders must wait for the price action to move above the EMA and then pull back into it. This is a strong signal that the price will continue to go up. They should set stop loss slightly below EMA and target at least two times the risk.

For short trades, traders must wait for the price action to drop below the EMA, wait for the pullback, and a bearish divergence on at least two indicators.

Examples of Successful Trades

Here are some examples of successful long trades after a bullish divergence and then a pullback into the EMA:

1. The price action had pulled back into the EMA, with bullish divergence on four indicators.
2. The same thing happened again, and the trader had a strong bullish divergence on at least two indicators.

Conclusion

Using these two TradingView indicators, traders can improve their profitability. The TMA Overlay helps them identify momentum and market trend, while the Divergence tool assists traders to detect divergences across multiple indicators. By combining these two tools with the right entry and exit rules, traders can exponentially increase their profitability in 2023 and beyond.