Indicators

5 Popular Indicators Explained in 5 Minutes (Part 2)

Astron Team · 09/24/2026 · 4 min read

In the first part of this guide, we covered five classic trend and momentum indicators: moving average, RSI, MACD, Bollinger Bands, and Stochastic. They answer the obvious question well, where is the price going, but they leave out important information, such as how much money is flowing into the move and where the price tends to find resistance.

This second part covers five complementary tools that help fill in those gaps: Volume, ATR, Fibonacci, Ichimoku, and OBV. None of them replaces the indicators from part 1 — they serve to confirm or question what the oscillators have already shown.

1. Volume

Volume shows the number of contracts or shares traded in each period and is the simplest confirmation base there is: a resistance breakout with volume well above average has a better chance of continuing than the same breakout on weak volume. Example: if a stock breaks R$ 30.00 trading 3 million shares, against a daily average of 800 thousand, the move has real market participation, not just a handful of isolated trades. The opposite also holds: a resistance breakout on low volume tends to be more fragile and reverses more easily on the following candles.

2. ATR (Average True Range)

The ATR measures an asset's average range of movement over a given number of periods, without indicating direction. It's mainly used to calibrate stop loss size: placing a stop smaller than the asset's average ATR tends to result in getting stopped out by normal market noise. Example: if a currency pair's daily ATR is 80 points, a stop of just 20 points will likely be hit even on days without a real trend reversal.

3. Fibonacci Retracement

The Fibonacci tool draws horizontal levels (23.6%, 38.2%, 50%, 61.8%) between a recent high and low, expecting the price to react near those levels during a correction. Example: in a rally from R$ 20.00 to R$ 30.00, the 61.8% level sits at R$ 23.80 — many traders watch whether the price finds support near that region before deciding on a new buy entry.

4. Ichimoku (cloud)

The Ichimoku Kinko Hyo is a more complete system, made up of several averages and a shaded area called the cloud (kumo), which works as a dynamic support and resistance zone. When the price is above the cloud, the bias is bullish; below it, bearish; and inside it, the market tends to be indecisive. It's a dense indicator, worth studying in a dedicated article before using it with real money. Even so, without mastering every component of the cloud, simply watching the price's position relative to it already works as a simple underlying trend filter.

5. OBV (On-Balance Volume)

OBV adds up the volume on up days and subtracts the volume on down days, forming a cumulative line. The idea is to spot divergences: if the price makes a new high but OBV doesn't follow, this can indicate that the rally is losing the support of large buyers, even if the price chart still looks strong. This divergence between price and cumulative volume often shows up before major reversals, which makes OBV an early warning tool, even without pinpointing exactly when the turn will happen.

How to combine the two groups of indicators

A practical way to bring together the two parts of this guide is to use the indicators from part 1 to decide the direction and the entry point, and the ones from this part 2 to validate the quality of the move. For example: the MACD signals a trend turn, volume confirms there was real participation in the breakout candle, the ATR helps define the stop size, and the Fibonacci level indicates how far a correction would be acceptable without invalidating the trade.

As with any technical analysis strategy, these indicators organize information, but they don't eliminate the risk of loss — the market can move against even a well-read signal. Practicing the combined reading of these indicators in a demo account, whether on Astron or another broker, before applying real capital, is the safest step toward gaining confidence with each one of them.