Beginner · 7 lessons · about 28 min

Indicators

Moving averages, RSI, MACD, VWAP and volume: what each measures, and where it misleads.

  1. 01Moving averagesIt averages the last N closing prices into one line. Standard levels traders watch: the 20 (short-term momentum), the 50…
  2. 02SMA vs. EMAThe simple moving average adds the last N closes and divides by N. Every bar gets equal weight.
  3. 03RSIThe RSI compares average gains to average losses over 14 periods. Output runs from 0 to 100.
  4. 04MACDThe MACD subtracts the 26-period EMA from the 12-period EMA. That gap is the MACD line.
  5. 05VWAPThe VWAP weights each trade by its volume, not by time alone. The result is the closest single line to fair value over the…
  6. 06Bollinger BandsBollinger Bands are a 20-period SMA with bands two standard deviations above and below it.
  7. 07VolumeVolume counts every share or contract traded in a period. A move on heavy volume has broad participation.

Educational content only. Not financial advice.