💡 Pro Tip
Indicators are not magic crystals balls. They lag behind price. Use them to confirm your analysis, not as the only reason to trade.
1. Relative Strength Index (RSI)
The RSI measures the speed and change of price movements. It oscillates between 0 and 100.
How to Use It
- Overbought (above 70): Price might be too high and due for a drop. Look for Sell signals.
- Oversold (below 30): Price might be too low and due for a bounce. Look for Buy signals.
2. Moving Average Convergence Divergence (MACD)
MACD is a trend-following momentum indicator. It shows the relationship between two moving averages of a price.
The Crossover Strategy
- Bullish: When the MACD line crosses above the signal line.
- Bearish: When the MACD line crosses below the signal line.
3. Moving Averages (MA)
Moving averages smooth out price action to help you identify the trend direction.
Simple Moving Average (SMA)
The average price over a specific number of periods (e.g., 50-day SMA).
Exponential Moving Average (EMA)
Similar to SMA but gives more weight to recent prices. It reacts faster to price changes.
Golden Cross & Death Cross
- Golden Cross: When the 50-day MA crosses above the 200-day MA. (Bullish)
- Death Cross: When the 50-day MA crosses below the 200-day MA. (Bearish)
Summary Table
| Indicator | Type | Best For |
|---|---|---|
| RSI | Momentum | Reversals & Divergence |
| MACD | Trend | Momentum & Trend Direction |
| MA | Trend | Identifying Trend & Dynamic Support |
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