Reading Assignments: Indicators

TA & Algo Trading Course
#241
  1. What is MACD and how is it used?
    The moving average convergence divergence (MACD) is a kind of oscillating indicator that can help traders quickly spot increasing short-term momentum.
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    Basically, when it is at positive levels and crosses zero it is a selling signal, and when it is negative and crosses zero it is a buying signal. But I think that it is better to use as a signal: when it is positive and the trend changes (remains positive but it is decreasing) it is a potential sell signal (I would sell a little but with high leverage) and when it is negative and the trend changes (remains negative but it is increasing) it is a potential buy signal (I would buy a little with high leverage)
  2. What is the difference between MACD and RSI?
    MACD goes between -2 and 2(I guess) and RSI goes from 0 to 100, but both of them are oscillating indicators. The levels at which RSI signals something are different than those of the MACD but the logic behind them is similar (I cannot believe I didnt study this until 37 :sweat_smile:)
  3. What is OBV and how is it used?

Volume itself is a valuable indicator, and on-balance volume (OBV) takes a significant amount of volume information and compiles it into a single one-line indicator. The indicator measures cumulative buying and selling pressure by adding the volume on “up” days and subtracting volume on “down” days.

Ideally, the volume should confirm trends. A rising price should be accompanied by a rising OBV; a falling price should be accompanied by a falling OBV.

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#242
  1. What is MACD and how is it used?
  • The MACD / Moving Average Convergence and Divergence is an oscillating indicator that varies over time within a band. One way it can be used is to spot an uptrend or a downtrend by looking at the line in the histogram if it is above zero (uptrend) / below zero (downtrend). Another way it can be used is by spotting trend reversals when the signal lines cross indicating a possible shift in the trend.
  1. What is the difference between MACD and RSI?
  • The RSI is also an oscillating indicator but it is contained between zero and 100. It doesn’t indicate the trend but rather the market conditions whether a certain asset is overbought or oversold.
  1. What is OBV and how is it used?
  • The OBV / On Balance Volume is an indicator that measures cumulative buying and selling pressures. It can be used to spot tops, bottoms and possible reversal points if there is a divergence between the OBV and the movement of the price.
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#243
  1. MACD is a trend following and momentum indicator.

If the MACD lines are above zero, the price is likely to go up, if it is below then the price is likely to go down.

  1. The RSI tells if the asset is oversold or overbought. It is on a scale from 0 to 100.+

  2. OBV is a volume equation, it adds the up volume days together and subtracts the down volume days. OBV up, then the price should also be going up and vice versa.

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#244
  1. What is MACD and how is it used?
  • Moving average convergence divergence. Basically, the difference between two moving averages.
  • It shows if a trend is speeding up or slowing down.
  • MACD turns positive = buy signal, MACD turns negative = sell signal (same as MAs making bullish/bearish crosses).
  1. What is the difference between MACD and RSI?
  • It is calculated differently. RSI oscillates from 0 to 100.
  • RSI shows if an asset is oversold (under 30) or overbought (over 70).
  • If the price is in a longer term uptrend, an oversold RSI would indicate an end of correction which is a good entry point.
  1. What is OBV and how is it used?
  • On-balance volume. It adds the volume of green days and subtracts the volume of red days.
  • I don’t see where I could adjust the number of days it counts back. Does it always go back till the start of price data?
  • It either confirms a trend or warns about a possible reversal.
  • Rising OBV, falling price = just a pullback.
  • Rising price, OBV flattening out = a sign of reversal.
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#245

1. What is MACD and how is it used?
Moving Average Convergence Divergence is an oscillating indicator. It fluctuates above and below. It is a trend following and momentum indicator. It has fast and slow lanes, “fast crossing above” - buy signal; “fast crossing under” - sell signal.

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

3. What is OBV and how is it used?
On Balance Volume indicator measures volume flow (positive/negative). It is used as an indicator of momentum and confirms trends

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#246
  1. Is an oscillating indicator. It is used to see potencial trade reversals.
  2. The MACD uses 2 Moving averages and an histogram, the RSI is contain between 0 and 100, but usually traders focus in overvalued (above 70) and undervalued (below 30);
  3. The indicator measures cumulative buying and selling pressure by adding the volume on “up” days and subtracting volume on “down” days. Ideally, the volume should confirm trends. A rising price should be accompanied by a rising OBV; a falling price should be accompanied by a falling OBV.
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#247
  1. MACD is a kind of oscillating indicator that can help traders quickly spot increasing short-term momentum. To use this strategy you have to look at which side of zero the MACD lines are on in the histogram below the chart. If the MACD lines are above zero for a sustained period of time, the crypto is likely trending upwards. Conversely, if the MACD lines are below zero for a sustained period of time, the trend is likely down. The MACD has 2 signal lines, a fast and slow line. A buy signal occurs when the fast line crosses through and above the slow line. A sell signal occurs when the fast line crosses through and below the slow line.

2.While RSI is an oscillating indicator just like the MACD,its movement however is contained between zero and 100 unlike the MACD.

3, OBV takes a significant amount of volume information and compiles it into a single one-line indicator. it is used to confirm trends, A rising price should be accompanied by a rising OBV; a falling price should be accompanied by a falling OBV.

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#248

  1. The Moving Average Convergence Divergence (MACD) is a kind of oscillating indicator that can help quickly spot increasing short term momentum.

  2. The MACD helps us understand which way the trend might be going and RSI shows us if its overbought or oversold.

  3. The On Balance Volume (OBV) indicator measures cumulative buying and selling pressure buy adding the volume “up” days and subtracting the volume on “down” days.

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#249
  1. MACD is the combination of two moving averages and is useful to see clearly the trend
  2. While MACD shows the trend RSI shows if the stock is overbought or overselled
  3. OBV is the summary of positive and negative volume and its a good indicator for the power of a trend.
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#250

1.The moving average convergence divergence (MACD) is a kind of oscillating indicator that can help traders quickly spot increasing short-term momentum. If the MACD lines are above zero for a sustained period of time, the product is likely trending upwards. Conversely, if the MACD lines are below zero for a sustained period of time, the trend is likely down.2ï»ż Using this strategy, potential buy signals occur when the MACD moves above zero, and potential sell signals when it crosses below zero.

  1. The MACD tells something about a possible trend up or down according the position on the zero line. The RSI tells something about the price overbought for a correction and oversold for a possible bounce.

  2. The indicator measures cumulative buying and selling pressure by adding the volume on “up” days and subtracting volume on “down” days. Ideally, the volume should confirm trends. A rising price should be accompanied by a rising OBV; a falling price should be accompanied by a falling OBV.

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#251

What is MACD and how is it used

The moving average convergence divergence (MACD) is a kind of oscillating indicator that can help traders quickly spot increasing short-term momentum and identify reversal patterns. The MACD divergence indicator is a way of analysing the market and confirming a trend reversal.

The indicator is calculated by subtracting a 26-period Exponential Moving Average from the 12-period moving average (26 EMA - 12 MA). There is also a histogram available on the indicator which can also be used as a divergence indicator.

On the indicator, you will also see a 9-period EMA of the MACD, which is also referred to as the ‘signal line’.

The signal line can be used to pinpoint entries into the market. For example, buying when the signal line crosses above the MACD line and selling when it crosses below.

What is the difference between MACD and RSI?

**The MACD is a momentum indicator showing the relationship between two moving averages of an asset’s price. **

RSI is a momentum oscillator that measures the velocity and magnitude of price movements.

In a few words RSI is used to identify the strength of the signal and MACD the reversal of the signal.

When combining both indicators (RSI and MACD) we can potentially identify signal strength combined with reversal signs e.g. with MACD we identify a reversal signal and with RSI the strength of the reversal signal.

Tip: Trading view has an indicator called RSI candles, used to demonstrate signal strength, by changing the candle colors e.g. the strong green candles have a darker color.

What is OBV and how is it used?

The On Balance Volume (OBV) indicator is a technical tool used to anticipate the price moves based on the trading volumes. It confirms the ongoing trends, spots the pivot points, and support/resistance levels.

The OBV indicator measures the volume changes to make price predictions. It is based on the theory that a significant price movement always follows a sharp change in the trading volume. Traders use the OBV to assess the price movement through volume.

Note The OBV doesn’t consider the price movement intensity. So it can be used with RSI. Also OBV indicator performs well in the short-term timeframes.

The OBV indicator sends the following signals:

  1. Trend confirmation.
  2. Trend reversal.
  3. Level breakout.
  4. A sharp surge in volumes.
  5. Crossing the Moving Average.
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#252

Excellent answers, It’s easy to understand. Please keep them like that :muscle:

Carlos Z.

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#253
  1. A Moving Average Convergence Divergence is an oscillator type indicator and is frequently used in technical analysis. It is a trend following tool that utilizes moving averages to determine momentum of a market.
  2. MACD measures the relationship between estimated moving averages (EMA)s, while RSI measures price change in relationship to recent price highsand lows.
  3. (OBV) On Balance Volume is a indicator that shows the momentum that uses volume flow information to help traders better predict price changes. Another way to look at the OBV indicator is to reflect the way the crowd sentiment predicts the bullish or bearish market outcomes.Alternitively, how to measure the buying and selling pressure. OBV indicator is a cumulative indicator. This means whenever there is a change in the instruments price, the volume is adjusted in the cumulative OBV total. If the price increases, the volume is added to the OBV. Meanwhile, if the price drops, the volume is subtracted. There is a third scenario where the price remains stable. In that case, no volume is added or subtracted.
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#254
  1. MACD (Mobile Average Convergence Divergence) is a trend following and divergence indicator that indicates the overall trend.
  2. RSI (Relative Strength Indicator) indicates if the market is overbought or over sold while MACD establishes trend strength.
  3. OBV (On Balance Volume) uses volume information to measure buying and selling pressure and indicates volume trend in a single line.
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#255
  1. What is MACD and how is it used?

MACD is a moving average convergence divergence that uses two different lines that tend to cross each other throughout time. MACD is a trend-following and a momentum oscillator indicator. The first one of the lines, the MACD line, comes from the exponential moving average (EMA) of 12 days - the 26 days EMA. The second line is the signal line, and it is an EMA of the last 9 days of the MACD line. Furthermore, an histogram can be used in conjunction, which is the MACD line - Signal line.

MACD is used to look for a signal to enter or sell a position. It can also signal an overbought or an oversold situation like with the RSI.

  1. What is the difference between MACD and RSI?

RSI moves as an oscillator between 0 and 100 level.

  1. What is OBV and how is it used?

OBV measures the cumulative buying and selling pressure by adding the volume on the days with green candles and subtracting the cumulative volume on the days with red candles. A rising price should be accompanied by a rising OBV. A falling price should be accompanied by a falling OBV.

OBV gives information about trend reversals or for entry points. It can also work as a warning for potential reversals early on.

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#256
  1. What is MACD and how is it used?

A kind of oscillating indicator that is used to help traders quickly spot increasing short-term momentum. It is a technical analysis indicator that varies over time within a band (above and below a centerline; the MACD fluctuates above and below zero. It is both a trend-following and momentum indicator.

  1. What is the difference between MACD and RSI?
    RSI is a momentum indicator that measures the magnitude of recent price changes to evaluate overbought or oversold conditions in the price of a stock. RSI is constrained between zero and 100.

  2. What is OBV and how is it used?

It measures cumulative buying and selling pressure by adding the volume on “up” days and subtracting volume on “down” days. It takes a significant amount of volume information and compiles it into a single one-line indicator. Ideally, the volume should confirm trends. A rising price should be accompanied by a rising OBV; a falling price should be accompanied by a falling OBV. If OBV is rising and the price isn’t, it’s likely that the price will follow the OBV in the future and start rising. If the price is rising and OBV is flat-lining or falling, the price may be near a top. If the price is falling and OBV is flat-lining or rising, the price could be nearing a bottom.

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#257

1.moving average convergence divergence (MACD) can spot increasing short term momentum
2.MACD indicator when is above zero its a signal for an uptrade. Below zero signals a downtrend. RSI is indicating when something is overbought over 70 and is due to correction and the oposite when is below 30.
3. On balance volume can be used as an indicator for a continuing trend if obv is rising even though the price is droping usually is an indicator that the price will follow up too soon. if the price is going up and the obv show a downtrade the price possibly will follow too.

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#258

  1. A MACD is an oscillating TA indicator that varies over time within a band (above and below 0). The indicator is a trend flowing and momentum indicator.

  2. The MACD trends with a band whereas the RSI is mainly used outside the band/range.

  3. An OBV is a TA indicator that accumulates the price on up days and subtracts from down days. The idea is to show which way the market is trending.

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#259
  1. MACD - Moving average convergence divergence:
  • uses two exponential moving averages, the 12 and the 26, calculates the difference between the two - the first MACD line (blue), the second is the signal line (red, a moving average of the first, but more smoother), when these two cross there is a potential exit or entry.
  • oscillator that helps you look for potential trend reversals - generates signals.
  • we have to also look at he histogram:above 0: the MACD is above the signal line, that generally suggests that the market is bullish - buy, if it is negative sell.
  1. RSI - relative strength index:
  • is another oscillating indicator,
  • its movement is contained between zero and 100 so it provides different information than the MACD,
  • one way of viewing the price as overbought and due for a correction when the indicator in the histogram is above 70 (sell signal when the trend is down),
  • and viewing the price as oversold—and due for a bounce—when the indicator is below 30 (buy signal, when the trend is up).
  1. OBV - on-balance volume indicator:
  • measures cumulative buying and selling pressure by adding the volume on “up” days and subtracting volume on “down” days,
  • the volume should confirm trends. A rising price should be accompanied by a rising OBV; a falling price should be accompanied by a falling OBV.
  • if OBV is rising and the price isn’t, it’s likely that the price will follow the OBV in the future and start rising. If the price is rising and OBV is flat-lining or falling, the price may be near a top (sell signal).
  • if the price is falling and OBV is flat-lining or rising, the price could be nearing a bottom (buy signal).
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#260

1. What is MACD and how is it used?
MACD is both a trend-following and momentum indicator, it has 2 moving average lines, one slow and one fast. A buy signal occurs when the fast line crosses through and above the slow line. A sell signal is when the fast line crosses through and below the slow line. A histogram indicates if it is above or below the zero line, above for sustained period indicates it is likely trending upwards and downwards when below zero.
2. What is the difference between MACD and RSI?
The movement of RSI is contained between zero and 100. Above 70 indicates an overbought price and under 30 as oversold.
3. What is OBV and how is it used?
OBV is trend indicator which compiles volume information into a single line. Volume is added on “up” days and subtracted on “down” days. Volume should confirm trends, rising price with rising OBV. If price rising and OBV flat or falling, it may indicate a top.

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