RSI, moving averages, volume: the 5 indicators to know in 5 minutes
Five measurements are enough to read the essentials of a chart: trend, momentum, participation, range and trend strength. None predicts on its own; each one answers a precise question.
A chart is read with five questions: where is the price going, with what momentum, with how many buyers, with what range, and is the trend real? Each question has its indicator. None predicts on its own; each answers its own question.
What the site measures
1. Moving averages: where is the price going?
The average of prices over 50 and over 200 sessions. A price above its 200-day average is in a rising underlying trend; when the 50-day average crosses above the 200-day, it is called a “golden cross”. It is the slowest indicator, and that is its strength: it ignores the moves of a single week.
2. RSI: with what momentum?
From 0 to 100, the strength of recent rises against falls, over 14 sessions. Above 70 it is called overbought, below 30 oversold. Our scale gives no points to an RSI under 30 on its own: an oversold stock can stay oversold for a long time.
3. Volume: with how many buyers?
The day's volume relative to its usual volume over 20 sessions. A rise carried by trading 1.5 times heavier than usual does not say the same as a rise in a vacuum.
4. ATR: with what range?
The average size of a session, over 14 sessions. It does not say which way the price is going; it says how much it usually moves. It is what places the stop-loss shown.
5. ADX: is the trend real?
The strength of a trend, not its direction, over 14 sessions. Below 20 the market is hesitating and trend signals carry little weight: our scale then takes points away. Above 25, the trend is established.
What the measurement does not say
- What comes next. All five describe past sessions. An RSI at 72 does not say a fall is coming; it says the rise was fast.
- A truth threshold by threshold. 70, 30, 20 and 25 are technical-analysis conventions, not natural boundaries. An RSI at 69 and one at 71 describe almost the same thing.
- Much in isolation. It is their combination the score adds up, and their disagreement that deserves a closer look.
Every term is defined in the glossary.
The video tutorial
Educational content: these articles explain what the site's measurements calculate, so that you can decide for yourself, knowing what they mean. Investing carries a risk of capital loss. See the legal notice.