What is the difference between a buy signal and a sell signal?

A buy signal indicates the area where we should expect a bottom. A sell signal indicates the area to expect a top. The stop loss is based on the closing price of the lowest bar of the pattern for a buy signal, and the highest bar of a pattern for a sell signal.

How do you know if an asset is a sell signal?

If an asset falls below a certain level on a technical indicator, or becomes overbought and starts to decline, or falls below a moving average, these could all be used as potential sell signals. Other investors may simply follow the market for sell signals, selling when the major indexes experience a high- volume selloff.

When does debt signaling cause a sell signal?

Debt signaling may cause a sell signal when a company’s total debt to assets rises above a certain level, for example. Other investors may sell when earnings growth starts to decline, or when the price/earnings (P/E) reaches a level that doesn't justify future earnings prospects.

How do technical analysts make a sell signal?

Technical analysts will focus on charting patterns and technical tools to provide sell signal alerts. Some may watch for a decline below a supporting trendline to generate a sell signal. Others may sell into strength, choosing to exit when the price is rallying aggressively to the upside.