Indicators transform price or volume data; they do not independently know what the market will do next. Understanding their construction helps prevent mechanical overbought, oversold or crossover rules.
04
TECHNICAL ANALYSIS
Technical Indicators
Learn what popular indicators actually calculate, what information they contain and where interpretation can go wrong.
You should be able to distinguish momentum, trend, volatility, volume and benchmark indicators and understand why confirmation from independent information can matter.
LEARNING PATH
8 lessons
Study in this order.
01
Intermediate
RSI
The Relative Strength Index is a momentum oscillator developed by J. Welles Wilder. It compares the magnitude of recent gains with recent losses and expresses the result on a scale from 0 to 100.
→
02
Intermediate
ADX & DMI
The Directional Movement system developed by J. Welles Wilder uses +DI and −DI to describe directional movement while ADX summarizes the strength of directional movement without itself identifying bullish or bearish direction.
→
03
Intermediate
MACD
MACD is a trend-and-momentum indicator built from exponential moving averages. It tracks the relationship between a faster EMA and a slower EMA and compares that difference with a signal line.
→
04
Beginner
EMA & SMA
Moving averages smooth price data to help reveal broader direction. SMA gives equal weight to observations in its window, while EMA gives greater weight to more recent observations.
→
05
Intermediate
VWAP
Volume Weighted Average Price estimates the average traded price over a defined session or anchored period while weighting prices by volume.
→
06
Intermediate
ATR
Average True Range is a volatility indicator developed by J. Welles Wilder. It measures the magnitude of price movement without identifying bullish or bearish direction.
→
07
Intermediate
Supertrend
Supertrend is a trend-following indicator built from price and Average True Range. It creates volatility-adjusted bands and switches state when price crosses the relevant band under its calculation rules.
→
08
Intermediate
OBV & CMF
On-Balance Volume and Chaikin Money Flow both combine price behavior with volume, but they use different calculations and therefore answer different questions.
→
Understand first. Apply second.
Work through the concepts until you can explain what each metric, structure or rule actually measures. Then test how it behaves in different market conditions. No individual concept should be treated as a guarantee of future price movement.
← Back to Education Center