Indicators are calculations drawn on your chart to help you read momentum, trend and volatility. Used correctly they are context — used blindly they are noise. Here are the five we actually teach, and how each one is meant to be used.
Moving Averages (MA / EMA)
The average price over N candles, drawn as a line. The 50 and 200 EMA are the most watched trend filters in the world.
- Price above a rising 200 EMA = uptrend context; look for buys
- The 50/200 crossover (“golden cross” / “death cross”) signals major trend shifts
- In sideways markets moving averages whipsaw — stand aside
RSI — Relative Strength Index
Momentum oscillator from 0–100. Above 70 = overbought, below 30 = oversold — but in a strong trend RSI can stay overbought for weeks.
- Best signal: divergence — price makes a new high but RSI does not
- Use it to time entries WITH the trend, not to fight the trend
MACD
Two moving averages and a histogram showing the momentum between them.
- MACD line crossing above the signal line = bullish momentum shift
- Histogram shrinking while price still rises = the move is running out of fuel
Bollinger Bands
A moving average with bands two standard deviations away — a live map of volatility.
- Bands squeezing tight = a volatility expansion (breakout) is often coming
- Price touching a band is NOT automatically a signal — in trends price walks along the band
ATR — Average True Range
The average size of recent candles. Not a direction signal at all — it tells you how far the market actually moves, which is exactly what your stop-loss should be based on.
- Set stops at 1.5–2× ATR instead of a fixed pip number
- Rising ATR = size positions smaller; the same stop distance costs more
The honest truth about indicators
Every indicator is calculated FROM price — it can only lag price. That is why we teach price action first and indicators second, as confirmation. Read more in our blog post The Truth About Price Action (Why Indicators Fail), or learn the full system in Price Action Mastery.
