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  Chart patterns The RSI indicator  

About indicators

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There is hundreds of indicators, they are all a different way to see the price, as most of them are derived from the OHLC values, along with the time factor.

There are a few exceptions:

There is no Holy Grail

You will never encounter an indicator showing you with a 100% accuracy the perfect, risk-free entry point. Their efficacy depends on how they are interpreted and used.
It is your role to read and interpret them with a congruent approach.

On the same note: your competences will not grow bigger only by using a lot of indicators. Too much information can fog your judgement, make you lost or hesitant.
I personally only use the volume, MAs, and RSI, along with the common ways to identify supports and resistances areas.

The longer you get used to one tool in particular, the more you will benefit from it. You have to get acquainted with its personality: your eyes, brain, and intuition, will process the big picture faster and in harmony with the probable future scenarios.
Therefore, after a period of testing the available panoply, I advise you to stick with the ones you have appreciated the most.

Types of indicators

The previous instruments we studied, such as trend lines, Fibonacci, moving averages… can be seen as on-chart indicators, as their visual representations overlay the price action.

In this chapter we will see two off-chart indicators, also called Oscillators, as their value oscillate between two fixed horizontal lines: the MACD, and the RSI.
Both are widely adopted by traders and can be powerful when properly used.
I will also teach you another famous on-chart indicator: the Bollinger Bands (BB).


Should you have any question or remark, feel free to post it. I will answer you as soon as possible!

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  Chart patterns The RSI Indicator