Reading Assignments: Indicators

  1. What is MACD and how is it used?
    Moving Average Convergence Divergence is an oscillating indicator, fluctuating above and below zero. It is both a trend-following and momentum indicator.
  2. What is the difference between MACD and RSI?
    One basic MACD strategy is to look at which side of zero the MACD lines are on in the histogram below the chart. Above zero for a sustained period of time, and the trend is likely up; below zero for a sustained period of time, and the trend is likely down
    The RSI is another oscillator, but because its movement is contained between zero and 100
  3. What is OBV and how is it used?.
    OBV takes a lot of volume information and compiles it into a single one-line indicator. The indicator measures cumulative buying/selling pressure by adding the volume on up days and subtracting volume on down days.
1 Like

1

The MACD is made up of 2 moving averages. Where they cross each other is an important buy or sell signal and show a change in trend. These 2 moving averages are one short-term (12 days) and one long term (26 days) which are compared against eachother, represented in a a red and a blue line in a chart. Depending on how these 2 lines cross each other, its a sell or buy indicator.

2
both provide different information and use different information to create an indicator:

MACD = shows short and long term divergence expressed in lines compared to each other. (see above)
RSI = oscillator moving between the 2 extremes: 0 and 100. depending on the value, it indicates a buy or sell. It is a momentum indicator that measures the magnitude of recent price changes to recognize overbought or oversold conditions in the price of a stock or other asset.

3
uses volume flow to predict changes in stock price. OVB takes volume information and compiles it into a single one-line indicator showing the general sentiment in the crowd. The indicator measures cumulative buying/selling pressure by adding the volume on up days and subtracting volume on down days.

1 Like
  1. What is MACD and how is it used?

It is an oscilator indicator that measures the trend and momentum in the markets. It has two lines, one fast and one slow, that moves above and below 0. We can use the two lines moving up or down as ways to look for entries and exits of positions, but they are lagging indicators.

  1. What is the difference between MACD and RSI?

RSI is the relative strength and measures strength of a move between the range 0 and 100, instead of 0. RSI is good for measuring if a stock is overbougth or oversold

  1. What is OBV and how is it used?

It`s the volume of the buyers minus the volume of the sellers. It is used to gauge the volume compared to the price. If price is rising but the OBM is flat or falling, this could be an indication of a possible top, and oposite.

1 Like
  1. What is MACD and how is it used?
    MACD is a trend-following and momentum indicator of an instrument. it has 2 waves (moving averages) known as fast and slow lines fluctuating above and below zero (a neutral line/point).

To use MACD, look at which side of the zero the lines are on in the histogram below the chart.

When the price is above 0 then the trend is likely up but if the opposite is shown the trend is likely down.

When the MACD crosses above zero it signals potential buy and a potential sell signal is when it crosses below zero.

  1. What is the difference between MACD and RSI?
    MACD indicates the trend of the market whereas RSI indicates whether it is overbought (above 70) or oversold (below 30)

  2. What is OBV and how is it used?
    **OBV measures cumulative buying/selling pressure by adding the volume on up days and subtracting volume on down days. **

Volume should confirm the trends. A rising price should be accompanied by a rising OBV; a falling price should be accompanied by a falling OBV

1 Like
  1. MACD stands for Moving Average Convergence Divergence. It is an indicator that oscillates around 0. When indicator is above 0, it indicates an uptrend, and when it is below 0, it means we are in a downtrend. It is accompanied by to moving averages, a slow and a fast one. The rules here are the same as those of any other slow and fast MAs. The fast one breaking above the slow MA is a buy signal, while the fast MA breaking below the slow one is a short signal.

  2. The MACD and RSI are both oscillators, however, the RSI ranges between 0 and 100, whereas the MACD does so above and below zero.
    The RSI (Relative Strength Index) indicates oversold and overbought territories of an asset. Values above 70 are overbought and those below 30 are oversold. The RSI can signal buy and sell opportunities as well, albeit always in conjunction with the trend. A dip below 50 will show a buy signal and it rises back above 50. A spike above 50 followed by the RSI dropping back down to below 50 levels is a short signal.

  3. On Balance Volume (OBV) is a trend indicator. In simple terms, when daily candles are green, the daily volumes are added up, whereas red daily candles substracts the daily volumes from the OBV. The OBV can signal trend reversals as well as tops and bottoms. The signals appear in the following manner: when the OBV is rising and the price isn’t, the price will most likely follow. The same is true for a falling OBV. When the OBV flatlines in a rising trend, it often means that we are at the top, whereas a flatlining OBV in a falling trand can indicate the bottom.

1 Like
  1. What is MACD and how is it used?
    MACD stands for Moving Average Convergence Divergence. It is an indicator that oscillates around 0. When indicator is above 0, it indicates an uptrend, and when it is below 0, it means we are in a downtrend.
  2. What is the difference between MACD and RSI?

A both are oscillator ,but they work on different scales.

MACD , is a trend-following momentum indicator and it ranges from -2 to 2. When MACD is above 0, it signals an uptrend. When MACD is below 0, it signals a downtrend.

RSI , it ranges from 0 to 100 and usually 14 periods are used to calculate the values. Generally, when RSI is above 70 on histogram, it signals that a price is overbought and when it is below 30 it signals that the price is oversold.

What is OBV and how is it used?
It measures cumulative buy/sell pressure , used for understanding the near top or the near bottom.

1 Like

1.MACD is a Moving Average Convergence Divergence. It is used by taking different periods of time - like 100 and 50 days - and comparing their cost averages. Then it is possible to tell whether there’s an uptrend or downtrend going on or where the trend could shift.

  1. RSI seems to be more precise while following market trends. It is possible to tell when the asset has been overbought or oversold and act accordingly.

  2. OBV is an On-Balance Volume indicator. Following the asset volume and the way the indicator reacts, it is possible to tell if the price has reached its top or bottom, or is about to make a move.

1 Like
  1. MACD is an oscilating indicator that moves above and below zero. It helps to determine a possible upcoming trend. When the bars remain below zero, it indicates that the trend is most likely downward. When it reverses above zero, the trend is most likely up. Also the fast and slow lines can help to determine good entry and exit points for the trader. When the fast line crosses the slow line and remains above it, that indicates a buy position. When the fast line crosses the slow one on and remains below it, that indicates a sell position. Off course this indicator is not 100% solid and should only help the trader in his risk management.

  2. RSI is an indicator that fluctuates between 0 and 100 and shows an overbought or oversold condition in the market. RSI does not provide as much information as the MACD and should be used as a complementary indicator, since it changes quite rapidly and does not indicate long term potential trends and trend reversals.

  3. OBV measures the cumulative bying and selling pressure in the markets. It’s a useful long term indicator that can help to highlight long term trends. When a sudden price move occurs that does not have the supporting OBV, the trader can assume that it won’t be a long lasting trend reversal. OBV in itself can provide a very useful trend line that can indicate a short term price drop that will most likely follow by the longer uptrend. In itself every move in price should have a corresponding OBV. If that is not the case, the trader can act accordingly and excecute entries and exits during sudden corrections and rises inside a long term trend.

1 Like
  1. What is MACD and how is it used?
    The MACD is a trading indicator that fluctuates above and below zero, indicating the trend and momentum of an asset. when above usually trending up and when below it shows the trend or momentum is going down.

  2. What is the difference between MACD and RSI?
    The difference between MACD and RSI is the MACD shows the trend of the price movement, the RSI is signaling if the price trend is oversold or overbought.

  3. What is OBV and how is it used?
    OBV is an trading indicator that shows the on balance volume data, takes as much volume information as possible and compiles it into one indicator showing buying and selling pressure. rising price shows rising OBV and falling price shows falling OBV.

1 Like
  1. What is MACD and how is it used?
    The MACD is an oscillating indicator that fluctuates above and below zero. It is made up of 2 moving averages and when they cross, this helps identify entry signals to the up or to the down side.

  2. What is the difference between MACD and RSI?
    MACD measures the relationship of two moving averages whereas RSI measures price changes in relation to recent price highs and lows.

  3. What is OBV and how is it used?
    OBV is On Balance Volume and is used to measure the volume of trading behind the price action.

**1.What is MACD and how is it used?**

Is made up of two moving averages with different time periods.It helps you to identify points where the trend might be accelerating when the two lines (the two moving averages) cross a lot of traders use this for an entry sig
2.What is the difference between MACD and RSI?
MACD contains two lines and RSI one line.
MACD you look at on which site of the zero the lines are and helps to see in which way the trend might going. By RSI you look at the movement between zero and 100 . It shows you overbought and oversold signals
3. What is OBV and how is it used?
OBV = On-Balance Volume
OBV takes the volume information and compiles it into a singel one-line indicator The indicator measures cumulative buying/selling pressure by adding the volume on up days and subtracting volume on down days.

  1. It’s a tool using two different moving averages. Observing these can show you when the trend is accelerating and could provide trade signals.

  2. macd shows two lines using moving averages to determine accelerating trends but rsi uses a scale of 0 to 100 to show if the asset is closer to overbought or oversold. rsi is less of a timely trend signal that macd.

  3. on balance volume is a cumulative number which shows the volume sold or bought of the asset

It’s a Trend-following and momentum indicator, it uses a histogram type chart, going up and under the zero line showing the trend strength, combined with two lines, the fast-moving and slow-moving line indicating the momentum.
2.
MACdD it is not only an oscillator but, also a trend indicator showing the strength of the market, RSI uses a 0 to 100 scale to point possible trend breaking with overbought and oversold signals.
3.
It is a single one-line indicator. The indicator measures cumulative buying/selling pressure by adding the volume on up days and subtracting volume on down days. OBV line should fallow market moves, indicating strength of the trend.

1. What is MACD and how is it used?
Moving Average Convergence Divergence is an oscillating indicator, fluctuating above and below zero. It is a trend following and momentum indicator.

2. What is the difference between MACD and RSI?
The MACD uses two indicators that oscillate between -2 and 2 and when the lines cross indicate a buy or sell signal.The RSI uses a single indicator and oscillates between zero and 100 and can signal overbought or oversold.

3. What is OBV and how is it used?
On Balance Volume measures volume flow (positive/negative) and is used as a momentum indicator and should confirm trends.

1 Like

What is MACD and how is it used?
MACD stands for Moving Average Converge Divergence. This analytical tool is used to identify points in a price chart where trends are accelerating in a specific direction. This can be used to time an entry/exit based on where the fast-moving and slow-moving lines cross.

What is the difference between MACD and RSI?
MACD uses the convergence/divergence of two differently-paced lines to determine price trends, while RSI uses a 0-100 range to determine when the price trend suggests “overbought” or “oversold”.

What is OBV and how is it used?
On-Balance Volume is a trendline in volumes that takes into account the direction of the sales during those volumes (if increasing, add, if decreasing, subtract). If positive, then the line suggests a bullish trend. If negative, the line suggests a bearish trend.

1 Like
  1. MACD stands for Mobile Average Convergence Divergence and it is used for predicting the trends.
  2. MACD is turning around zero because it’s focused on trends (up or down) whereas RSI is between 0 and 100 and indicates correction or (re)bounce.
  3. OBV stands for On-Balance Volume and it’s used for measuring the cumulative buying/selling pressure.
1 Like

MACD measures the relationship of different moving average time frames. Specifically the faster (shorter) vs the slower (longer). the point where they cross can indicate a trend reversal.

  1. RSI is a measure of whether the market appears to be over bought or oversold. I say “appears…” because its an indicator. Where MACD is a momentum indicator, RSI can help determine market entry or exit points by price.

  2. On Balance Volume tracks the recent buying/selling interest as a line by measuring the buy/sell volume. this is more helpful than just the daily volume numbers.

1 Like

1. What is MACD and how is it used?

The MACD(Moving Average Convergence Divergence) is an oscillating indicator, fluctuating above and below zero. It is both a trend-following and momentum indicator. Potential buy signals occur when the MACD moves above zero, and potential sell signals when it crosses below zero. If MACD above zero for a sustained period of time, the trend is likely up. But if MACD below zero for a sustained period of time, and the trend is likely down.

2. What is the difference between MACD and RSI?

The RSI (Relative Strength Index) is another oscillator, but because its movement is contained between zero and 100, it provides some different information than the MACD. In a strong uptrend, the price will often reach 70 and beyond for sustained periods, and downtrends can stay at 30 or below for a long time. While general overbought and oversold levels can be accurate occasionally, they may not provide the most timely signals for trend traders. An alternative is to buy near oversold conditions when the trend is up and place a short trade near an overbought condition in a downtrend.

3. What is OBV and how is it used?

On-balance volume (OBV) is a technical indicator of momentum, using volume changes to make price predictions. OBV shows crowd sentiment that can predict a bullish or bearish outcome.
Analysts look to volume numbers on the OBV to track large, institutional investors. They treat divergences between volume and price as a synonym of the relationship between “smart money” and the disparate masses, hoping to showcase opportunities for buying against incorrect prevailing trends. For example, institutional money may drive up the price of an asset, then sell after other investors jump on the bandwagon.

1 Like

1, It’s an oscillating indicator tool using two moving averages of differing time periods where the difference between them is represented as a histogram(individual lines). It is used to identify trends in price movements up or down therefore offering traders entry and exit points.
2, MACD utilises averages of differing time periods to provide buy and sell points for an instrument and the RSI(relative strength index) provides guidance for entry and exit points according to overbought and oversold market conditions. They use different scales to reflect market sentiment. RSI scales from 1-100 where 70 up is overbought and 30 down is oversold. these provide sell and buy points.
3, On balance volume- This is an indicator measuring cumulative buying or selling pressure. It adds volume on up days and subtracts volume on down days. It is used to help identify trends. In general rising volume should be accompanied by rising price and vice versa.

  1. What is MACD and how is it used?
    it’s an oscillator type of indicator that combines two moving averages to create a graph of convergence and divergence over time (hence the name MACD), when the MACD is positive for a long period of time it indicates a positive trend and when it’s negative for a long period of time it indicates a negative trend

  2. What is the difference between MACD and RSI?
    MACD is bounded between to oscillate around 0 plus, that makes it easy to spot trend changes, RSI is bounded between 0 and 100 and it gives information about the asset being overbought or oversold

  3. What is OBV and how is it used?
    OBV is a technical indicator that shows the volume of transactions across time, this is useful because it can help to understand the market by looking at the changes and comparing it with the price behaviour

1 Like