Academy · Intermediate

Trading indicators

Every indicator is a transformation of price and volume that you could compute by hand. Knowing the formula is what tells you when the output is meaningless.

  • ✓ 22 lessons
  • ✓ 89 minutes end to end
  • ✓ Free in MarketPro
  • ✓ No sign-up to start reading

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Every indicator is a formula applied to price or volume, and any of them could be worked out by hand given enough patience. RSI above 70 does not mean sell. It means that across the lookback, usually 14 periods, average gains have outpaced average losses by more than seven to three, which in a strong trend is exactly what you would expect and is not by itself a reason to fade anything.

This category gives each tool its real definition first, then the conditions in which the conventional reading holds and the conditions in which it inverts: simple against exponential moving averages, RSI, MACD, Bollinger Bands, stochastics, ATR, volume, Fibonacci retracements and pivot points, plus how many of them can share a chart before they are all saying the same thing.

It assumes you can already read price without help, which is the point. Work through technical analysis first if that is not yet true.

The 22 lessons in order

  1. Moving Averages: SMA Vs EMA Both lines smooth price. Only one of them reacts to a close you can no longer see on the chart. Beginner5 min
  2. Understanding RSI A reading of 75 means the up-moves over the last 14 bars added up to three times the down-moves. That is the whole claim. Beginner4 min
  3. MACD: Trend And Momentum Together A falling MACD line does not mean price is falling. It means two moving averages are getting closer together. Beginner4 min
  4. Bollinger Bands And Volatility The distance between the bands is a volatility reading in pips. That number is more useful than any band touch. Intermediate4 min
  5. Stochastic Oscillator Basics A stochastic of 80 means the close finished 80 per cent of the way up the last 14 bars' range. Nothing more. Intermediate4 min
  6. Average True Range For Measuring Volatility ATR is a distance, not a direction. Its job is to tell you how wide a stop has to be to sit outside ordinary movement. Intermediate4 min
  7. Volume As A Confirmation Tool Volume only means something as a ratio against its own recent average. The raw count on a forex chart is your broker's, not the… Beginner4 min
  8. Fibonacci Retracement Levels The levels are fixed the moment you choose two swing points. Choosing them is the part that is not objective. Beginner4 min
  9. Ichimoku Cloud: A First Look The cloud above today's candle was calculated 26 bars ago and shifted right. It is old information, not a forecast. Intermediate4 min
  10. ADX And Measuring Trend Strength ADX answers one question and refuses the other. It tells you whether a trend is worth following, never which way to follow it. Intermediate4 min
  11. Pivot Points For Intraday Levels Pivots are fixed at the open and never update. The span from S2 to R2 is exactly twice yesterday's range. Beginner4 min
  12. VWAP: Volume Weighted Average Price VWAP is what participants paid, not where price printed. A spike with no volume behind it hardly registers. Intermediate4 min
  13. Parabolic SAR For Trailing Trends The dots tighten faster the longer a trend runs. That is the design, and it is also why a mature trend stops you out on any pause. Intermediate4 min
  14. On-Balance Volume Basics OBV has no meaningful zero. Scroll your chart back and the entire line shifts, which tells you what to read and what to ignore. Intermediate4 min
  15. Commodity Channel Index Basics The 0.015 in the CCI formula is not derived from anything. It was picked to make most readings land between minus 100 and plus… Intermediate4 min
  16. Williams %R Explained Zero is the top of the range and minus 100 is the bottom. The scale reverses the intuition most people arrive with. Beginner4 min
  17. Golden Cross And Death Cross By the time a golden cross prints, the decline it marks the end of has usually been retraced in full. That is arithmetic, not… Beginner4 min
  18. Divergence Between Price And Indicators Divergence tells you a move has lost force. It does not tell you when, or whether, price will respond to that. Intermediate4 min
  19. Combining Indicators Without Overload Adding a second tool from the same family buys agreement, not evidence. Only disagreement carries information. Beginner4 min
  20. Indicator Lag And Whipsaws You cannot tune lag away. You can only choose how much of it to carry in exchange for fewer false signals. Beginner4 min
  21. Volume Profile Basics A normal volume pane says when trading happened. A profile says where, and where is the more useful question. Intermediate4 min
  22. Money Flow Index Basics MFI is RSI with the volume column switched on. Where the two disagree is the only thing it adds. Intermediate4 min

Guided paths that use these lessons

A path is an ordered run through lessons from several categories, which is how the app sequences them. One path draws on trading indicators.

Indicators Toolkit

The most-used technical indicators explained one at a time, then how to combine them without overload.

10 lessons
Trade · Learn · Earn

Take trading indicators with you

All 22 lessons in this category, plus the other 298 in the academy, with a quiz on each one and your place kept. Free on any MarketPro account, in the app or your browser.

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Not investment advice. Past performance is not indicative of future results.