How to pick the important indicators — don't drown in dozens of them

The most common beginner question: “There are dozens of indicators on the market — which should I learn?” Answer: pick one representative from each of the three types, combine them, don’t be greedy.

1. The three big types of indicators (classify first, then pick)

Type	Answers what question	Representatives	Beginner learns
Trend	Is the current direction up or down?	MA, ADX, trend lines	MA (5 / 20 / 60)
Momentum	How strong is this direction? Is it fading?	MACD, RSI, KDJ, BOLL	MACD
Valuation	Is it expensive now?	PE, PB, PS, PEG, DCF	PE (add PB for asset-heavy)

Learn one from each of the three types = entry complete. The rest are “variants / supplements” of these three — learn them after you’re comfortable.

2. Recommended beginner trio

Trend: MA20 / MA60 ([K04])
Momentum: MACD ([K05] / [K05])
Valuation: PE (add PB) ([K09] / [K09])

Roles of the trio:

Moving averages tell you “can I even trade the big direction” (don’t overweight if below MA60);
MACD tells you “is momentum strengthening or weakening” (divergence = warning);
PE / PB tell you “at this position, is it worth it”.

All three green = good; only 1-2 green = cautious; all red = stay away.

3. Three principles for combining

Different types confirm each other: MA + MACD + PE all bullish = strong signal; if MACD golden cross but PE at 90% historical percentile, beware buying the top.
Don’t learn duplicates within a type: MA + trend line + ADX all read trend — one is enough.
Use indicators to “confirm / falsify”, not to predict: form a judgment first (e.g., “this one has fallen a lot, might rebound”), then use indicators to confirm; don’t see a golden cross and infer “it will rise”.

4. Common pitfalls

More indicators = better? Wrong. 3-4 is enough. Piling on 10 only makes you “want both long and short”.
More complex = more accurate? Wrong. MACD is essentially two lines + bars; BOLL is midline ± 2 std dev. The complexity is packaging; the logic is basic statistics.
Can indicators predict tops/bottoms? Wrong. Indicators are lagging (computed from historical prices). Their value is confirming trends, not predicting.
Same indicators across timeframes? Wrong. Short-term: MA5 / daily MACD; medium: MA20/60 + weekly MACD; long-term: valuation (PE / PB percentile).

5. “Indicator packages” for different styles

Style	Package	Focus
Short-term (days)	MA5 + MACD + volume	golden/death cross, volume-price
Swing (weeks-months)	MA20/60 + MACD + PE percentile	trend + valuation bottom
Long-term (years)	MA250 + ROE + PE/PB percentile	value and quality
DCA (no timing)	PE percentile + asset quality	buy more when cheap, less when expensive

6. After reading this

Want each item’s specific usage in the “trio” → [Getting started with indicators: MACD / PE / PB in one picture]
Want chart practice → [K06 indicator combo practice]
Want to know why “low PE” ≠ “should buy” → [K09 PE deep dive]

📌 The principle of picking indicators is not “more”, but “enough and mutually complementary”. One per type is enough for 80% of judgments.

⚠️ This article is a methodological illustration and does not constitute any investment or trading advice. Markets are risky; decide with caution.