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Indicators 101
Interactive Quiz on RSI, MACD, Stochastics & Momentum Signals

Indicators reveal the heartbeat of price movement. Learn how RSI shows momentum strength, how MACD tracks trend acceleration, and how Stochastics exposes overbought and oversold conditions that shape market decisions.
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Indicators 101: Understanding RSI, MACD & Stochastics

Indicators help traders read momentum, trend strength, and the “energy” behind price. Before using RSI, MACD, or Stochastics effectively, it helps to understand how markets move. If you're laying the groundwork, start with What Is Trading?.

Indicators don’t invent signals — they measure how orders shape price movement. To understand the mechanics behind those readings, revisit How Orders Work and price-setting logic in Bid vs Ask.

Market conditions change how indicators behave. Spread size and liquidity depth often affect momentum oscillators more than people realize. For the environment behind indicator signals, explore Understanding the Spread and What Is Liquidity?.

Indicators only make sense when you can read raw price. Candles, structure, and chart perspective shape nearly every indicator interpretation. Build this literacy through Chart Basics and Candlestick Anatomy.

Trend direction determines how RSI, MACD, and Stochastics should be interpreted. Oversold in a strong downtrend is not the same as oversold inside a range. For directional context, explore Bullish vs Bearish.

Volume adds weight to indicator signals. A divergence backed by strong volume carries far more meaning than one in thin conditions. Strengthen this layer with Volume 101.

Moving averages often act as confirmation tools. MACD itself is built from moving averages, so understanding their behavior is essential. Build that clarity with Moving Averages.

Indicators are notorious for triggering false signals during breakouts or reversals. To filter noise and catch real movement, study Breakouts vs Fakeouts.

Momentum is the backbone of all oscillators. If you understand how strength builds or fades, indicator readings become far more accurate. Deepen that skill through Momentum Basics.

Psychology plays a huge role in how traders interpret indicators. Fear forces overreactions; hope delays decisions. Strengthen your viewpoint with Psychological Trading Pressure.

Indicators behave differently during volatility spikes or news-driven candles. To understand when not to trust indicator signals, study News & Market Impact.

Once you understand what indicators measure — and what they don’t — you can fold them into a rule-based approach. For the next step, explore Building a Trading System.

Indicators never replace skill. They amplify it. The deeper your understanding of structure and momentum, the more confidently you can use RSI, MACD, and Stochastics.

Frequently Asked Questions

RSI compares recent gains and losses to reveal strength, weakness, or stretched momentum.
MACD tracks the relationship between moving averages, while RSI measures the speed of recent price changes.
Each indicator measures a different characteristic of price, so alignment isn’t guaranteed.
No. Indicators lag behind price — structure, trend, and liquidity always come first.