Effectiveness of Technical Indicators in Stock Trading

This research investigates the practical efficacy of technical indicators in stock trading by examining their application within the Indian equity markets. These indicators— mathematical tools derived from price and volume data—are widely used to support entry and exit decisions. Yet, their predictive reliability remains debated, especially in emerging markets like India. Using historical data from 2020 to 2025, the study evaluates four key indicators: RSI, SMA, EMA, and Supertrend. Performance is assessed through Sharpe ratio, win-loss ratio, average return, and maximum drawdown. A combined strategy was also tested to examine the benefits of multi-indicator confirmation. Findings reveal that while Supertrend is the most consistent individual tool, combining it with RSI and EMA leads to superior overall performance. The study contributes to existing literature by providing empirical support for multi-indicator strategies and underscores the importance of adapting these tools to specific market conditions.