How do you use leading and lagging indicators?

In my experience, the two crosses on stock charts - death cross and golden cross are also good leading stock price indicators and can signal adverse and better price movements respectively. Death cross is when the shorter term moving average ( generally the 50-DMA) crosses below the longer term moving average ( generally the 200-DMA). It means that the stock is losing momentum on a near-term basis and is an indicator of a laggard stock. Golden cross is the exact opposite. It is when the 50-DMA crosses above the 200-DMA and indicates strong price momentum in the near term. In other words, the stock has regained momentum and is displaying bullish behaviour.

While the above indicators may be considered lagging indicators on an absolute basis, they're often considered leading because they can be used to give early trade signals. For example, MACD is a widely used momentum indicator that helps identify potential trend reversals, bullish or bearish crossovers, and divergence between the price and the indicator itself. By analyzing the MACD line and its signal line, as well as the histogram representing the difference between the two, you can gain insights into the direction of price movements. It is important to remember that no single indicator guarantees accurate predictions so it's best to use MACD in conjunction with other technical and fundamental analyses to make well-rounded decisions.

In my experience, popular lagging indicators like moving averages (e.g., 50-day, 200-day), Relative Strength Index (RSI), and Moving Average Convergence Divergence (MACD) provide valuable insights into market trends and entry/exit points. Moving averages smooth out fluctuations, while RSI identifies overbought/oversold conditions. MACD tracks moving averages to signal trend reversals. Though they may not predict sudden shifts, these indicators are useful when combined with other forms of analysis.

In my experience, while technical indicators provide valuable insights into market trends and price patterns, relying solely on them poses certain risks. Technical indicators are based on historical price data and patterns, and they may not always accurately predict future market movements. By incorporating fundamental research, which involves analyzing company financials, industry trends, and economic factors, one can gain a deeper understanding of the underlying forces driving market behavior. This holistic approach helps to mitigate the risks associated with solely relying on technical indicators and enables investors to make more informed decisions based on a broader perspective.

What my instinct says is that never use an indicator. Instead study psychology . Study the economic perspective. Then study Industry trends and then go with the stock which is showing momentum.