Reading Assignments: Indicators

TA & Algo Trading Course
#561

Hi everyone,

  1. MACD is an indicator used in technical analysis to identify potential changes in the direction and momentum of a trend of an instrument. One way to use it is to do the following: consider a potential buy signal when the MACD moves above zero, and reversely a potential sell signal when it crosses below zero.
  2. They both are momentum indicators but they measure different factors: you may have a situation where the MACD indicates we are in a buying momentum while the RSI indicates the instrument is overbought and the price is due for correction.
  3. The indicator measures cumulative buying and selling pressure by adding the volume on “up” days and subtracting volume on “down” days. It is used to confirm trends: a rising price should be accompanied by a rising OBV and reversely a falling price should be accompanied by a falling OBV.
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#562
  1. It is both a momentum indicator and an oscillator. It indicates a downtrend when the histogram is below zero and an uptrend when is above zero. It also offers entry signal when the fast and slow lines cross each other.
  2. The MACD highlights the direction of the trend while the RSI indicates oversold and overbought conditions.
  3. OBV means On Balance Volume and it measure the cumulative buying and selling pressure. Divergences between the trend of the price and OBV can anticipate a reversal.
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#563

  1. Moving average convergence divergence - used to help identify short term momentum (trends/momentum)

  2. macd provides info on short term trends / momentum while the rsi provides more info of overbought / oversold data shown on a moving average, macd = direction of movement of an asset , rsi = change / reversal of movement of an asset. , both indicators signal a possible buy / sell signal

  3. on-balance volume - measures cumulative buying/selling pressure by adding volume up/down days

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#564

  1. What is MACD and how is it used?
    MACD is a It is both a trend-following and momentum indicator. Using this strategy, potential buy signals occur when the MACD moves above zero, and potential sell signals when it crosses below zero.

  2. What is the difference between MACD and RSI?

MACD can fluctuate under 0, while RSI is contained withing 0 and 100.

  1. What is OBV and how is it used?

OBV measures cumulative buying and selling pressure by adding the volume on “up” days and subtracting volume on “down” days. 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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#565
  1. What is MACD and how is it used?

MACD stands for moving average convergence divergence. It’s an oscillating indicator, buy signals occur when the MACD moves above zero, and potential sell signals when it crosses below zero or when the fast line crosses through and above the slow line.

  1. What is the difference between MACD and RSI?

MACD tracks moving averages, RSI indicates if something is overbought or oversold. They use different scales and data inputs.

  1. What is OBV and how is it used?

On-balance volume (OBV) takes compiles various volume related information to give a picture of cumulative buying and selling pressure. Volume should confirm trends. If not, it’s an indicator of a possible reversal.

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#566

Indicators

  • MACD

    • Moving Average Convergence Divergence (also know as MACD), is an indicator that tends to vary over time within a band (range of values). In this indicator uses the 0 as a central basis. If the value is above 0 for a sustained period of time, means that we have appreciated positive price movements. We could say that the Stock/Currency/Crypto asset that we are assessing, is on a uptrend. The same goes when value is below 0 for a sustained period of time, means that we have had a negative price movement.

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    BTC/TetherUS chart (07/01/2022)

  • MACD vs RSI

    • The relative Strength Index (RSI), helps us seeing when the price is overbought or oversold.

    The difference between this two indicators are the following:

  1. The range of the RSI goes from 0 to 100, whilst the MACD goes from negative numbers to positive numbers (How the ranges in the MACD are stablished I don't know at the time of writing)
  2. The MACD shows us a change in the market trend when the fast line goes over the slow line. While the RSI shows us, that is the RSI is above 70 points we could be oversold, while the RSI is below 30, means that we are overbought.

  • OBS

    • This indicator aggregates all the volume traded, and adds up or subtracts form the trend line created.

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    ETH/USDT chart (07/01/2022)

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    #567
    1. What is MACD and how is it used?

    The MACD indicator consists of 3 elements.
    The MACD LINE
    (from the values of the two EMA of 12 and 26 periods we subtract the 26 EMA from the 12 EMA and thus the MACD indicator is obtained),
    the SIGNAL LINE
    (a 9-day line which we draw on the MACD indicator itself)
    and the HISTOGRAM
    (which shows us the distance of the 2 indicators).

    • SIGNAL LINE CROSSOVER
      (MACD < SIGNLE LINE → SHELL SIGNLE
      and MACD > SIGNLE LINE → BUY Signal)
    • CENTERLINE CROSSOVER
      (MACD > 0 → BUY SIGNAL
      and MACD < 0 → SHELL SIGNAL)
    1. What is the difference between MACD and RSI?

    MACD shows us the trend and strength of the market,
    while the RSI shows us when the price is overbought (RSI ≥ 70)
    and when the price is oversold (RSI ≤ 30)

    1. What is OBV and how is it used?

    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.
    If the OBV is bullish while the price is not, it is likely that the price will go up in the future following the indicator.
    If the price is bullish while the OBV is either stagnant or bearish maybe the price is close to its peak.
    Whereas, if the price is bearish while the OBV is either flat or bullish, the price is maybe near to the bottom.

    1 Like
    #568
    1. What is MACD and how is it used?
    MACD = moving avarage convergence divergence 
{ 
oscillator & histogram that allows traders 
to see the momentum of the asset/instrument
}
    1. What is the difference between MACD and RSI?
    RSI != MACD  
{
RSI oversold and overbought values can oscillate from 0 100;
where MACD can oscillate into negative numbers view in a momentum and histogram data
}
    1. What is OBV and how is it used?
    OBV = on balance .volume {
see the accumulated buy or sell volume of the asset; it helps the trader 
determine the 'trend' pressure 
of a $price going up or down vs OBV going up, flat or down
}
    2 Likes
    #569
    1. follows the trend and volume based on whether above or below 0
    2. views if over 70 it is overbought and under 30 as oversold
      3.a rising price should be accompanied by a rising OBV and a falling price accompanied by a falling OBV
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    #570
    1. MACD (moving average convergence divergence) - is an oscillating indicator showing both the direction of a trend and the moment you may enter the market.
    2. The MACD fluctuates above and below zero and the RSI movement is contained between zero and 100. MACD shows trend direction and RSI shows trend strength.
    3. OBV (on-balance volume) measures cumulative buying and selling pressure by adding the volume on “up” days and subtracting volume on “down” days.
    1 Like
    #571

    1 The moving average convergence divergence (MACD) can be used to get buy and sell signals from the charts. A move above 0 is a buy and a mon below 0 is a sell.
    2. RSI tells you if the asset is overbought or oversold where as the MACD tells you about the overall trend and strength of the market.
    3. OBV tells you about the change in volume and can be used to predict bullish and bearish outcomes.

    1 Like
    #572
    1. The MACD, moving average convergence divergence, is a momentum and trend based oscillator, with a fast and slow line. Often used for buy and sell signals when the two lines intersect.
    2. MACD has a zero line and oscillates above and below it, and uses two intersecting lines to provide signals while the RSI, relative strength indicator, measures between zero and a hundred, determining overbought and oversold phases, can be used to find divergences.
    3. The On-balance volume measures cumulative buying and selling, compiling it and putting it on a single line. Generally used to determine the strength of moves in the market, for example if the move is accompanied by volume then often it is a confident move, but if accompanied by low volume, the market has low confidence in the move and that can signal tops, bottoms, fakeouts.
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    #573

    1. MACD short for ‘moving average convergence divergence’, is used to help traders spot increasing short-term momentum in the market.

    2. MACD is for short term movement thats increasing in the market where as the RSI is measuring the price changes to evaluate overbought or oversold stock/currency.

    3. OBV meaning on balance volume is an indicator that measures cumulative buying and selling pressure by adding the volume on ‘up’ days and subtracting volume on “down” days

    1 Like
    #574
    1. What is MACD and how is it used?
      • Moving Average Convergence Divergence (MACD) - it’s a technical analysis indicator with data that fluctuates above or below a center line (the center line considered 0) over time. If the data lines are above zero for a period of time it’s considered an upward trend and if the data lines are below zero for a period of time it is considered a downward trend. Traders can use this information as a buy signal if the data lines moves above zero or a sell signal if the data lines crosses below zero. The MACD also has two Signal lines, the fast line and the slow line which can be used as trading indicators. For example if the fast line crosses through and above the slow line it is considered a buy signal. Now if the fast line crosses through and below the slow line it is considered a sell signal for the trader.
    2. What is the difference between MACD and RSI?
      • RSI is another oscillating indicator but it uses a range of zero to 100. If on the histogram the price reaches 70 and beyond for a sustained period of time that means we are in a strong uptrend but the asset is over bought and due for a correction. If the asset is at 30.3 or below it means it is oversold and is due for a bounce. A trader would combine the RSI indicator with trend lines to determine a particular trade. For example if the long term trend line of an asset is up and the RSI moves below 50 that could be and indicator to buy because essentially the trend line being positive means the asset would bounce back and the trader was able to buy at a dip before the price bounces up and continues it upward trajectory.
    3. What is OBV and how is it used?
      • OBV (On-Balance Volume) - Is a single one line indicator of significant volume information. By measuring the cumulative volume up days and subtracting the volume down days the line generated can confirm an overall trend. If the OBV line is rising then it indicates that the price should soon follow it’s upward trend. If the OBV line is flat-lining or falling it could mean the price may be near a top. If the OBV line is flat lining or the price is falling it could mean the price is near a bottom
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    #575
    1. What is MACD and how it is used ?
      MACD can be used to view overall trend of the market and identify the probable pull backs and reversals. MACD is comprised of 2 moving averages (fast/slow) and histogram plotted on a 0neutral scaale.
    2. What is the difference between MACD and RSI ?
      MACD is generally used to gauge the trend and strength of the market. RSI is generally used to gauge overbought/oversold conditions. Although these are not exclusive uses, they are the most common uses for new traders learning these indicators.
    3. What is OBV and how is it used ?
      OBV (On Balance Volume) measures volume flow (positive/negative) and is generally used as momentum indicator and identity divergence in the price action.
    1 Like
    #576
    1. The MACD is a type of oscillating indicator, meaning it varies over time within a band above and below zero. It forms lines to visualize the distance or closeness to zero. It also has two signal lines named slow line and fast line. There are different ways to use the indicator. Two of them are as follows. Firstly, to buy when it crosses above zero, and to sell when it crosses below zero. Secondly, to buy when the fast line crosses above the slow line,andto sell when the fast line crosses below the slow line.
    2. It seems hard for me to describe the difference. It feels like describing the difference between a bicycle and a screwdriver. They are just different things. So, the difference is that the MACD is as described in the answer to question 1 above, while the RSI is the following:
      The RSI posts a value between 0 and 100. Above 70 is seen as overbought, while below 30 is seen as oversold. Many use overbought as a sell signal and oversold as a buy signal, but this is hardly reliable, especially not in a trend. Another way to use it in a trend is to buy in an uptrend, when after a correction, the RSI rises back above 50, or to sell in a downtrend, when after a correction, the RSI falls back under 50.
    3. OBV, the on-balance volume, forms a line by adding the volume of the day on green days and subtracting the volume of the day on red days. The line should confirm trends and can give a higher assurance, that a trend will continue after a pullback, because the OBV’s trendline does not plummet as readily as the price chart’s trendline.
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    #577
    1. Is a kind of oscillating indicator. An oscillating indicator 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.
    2. They both an oscillators, The RSI use a single indicator and oscillates between 0 and 100, The MACD use two indicators and oscillate between -2 and 2.
    3. Is a single line indicator and use volume information.
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    #578

    1. What is MACD and how is it used?
    It is a divergence idnicator with two trend lines, one slower, one faster. It is shown as a band with 0 as the center line.
    2. What is the difference between MACD and RSI?
    RSI shows if an asset is overbought or oversold with one singel trendline fluctuating between 0 and 100. While the crossovers of the trend lines with MACD are buy or sell signals, with RSI it is the points which are the indicators for buying or selling.
    3. What is OBV and how is it used?
    OBV shows the volume and shows the trend of the volume.

    #579

    1. The MACD is a trading indicator used in technical analysis to determine the strength and momentum of an asset’s price.

    2. The MACD measures the relationship between two EMAs while the RSI measures the relationship between recent highs and lows in price.

    3. OBV is a technical indicator for momentum used to determine price changes based on volume.

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    #580
    1. What is MACD and how is it used?

    MACD stands for Moving Average Convergence Divergence, and it is a popular technical indicator used in trading. The MACD is based on the difference between two exponential moving averages, typically a 12-period and a 26-period moving average. The MACD line is the difference between these two moving averages, and a signal line is typically added to the chart, which is a 9-period moving average of the MACD line.

    The MACD is used to identify changes in momentum, trends, and potential buy or sell signals in the market. When the MACD line crosses above the signal line, it is considered a bullish signal, indicating that it may be a good time to buy. Conversely, when the MACD line crosses below the signal line, it is considered a bearish signal, indicating that it may be a good time to sell.

    1. What is the difference between MACD and RSI?

    While both MACD and RSI can be used to identify potential buy or sell signals in the market, they have different strengths and weaknesses. MACD is better suited for identifying trend reversals and changes in momentum, while RSI is better suited for identifying overbought and oversold conditions.

    1. What is OBV and how is it used?

    OBV stands for On-Balance Volume, which is a technical indicator used in trading to measure buying and selling pressure. The OBV indicator calculates the cumulative total of the volume of a security, where each day’s volume is added or subtracted from the previous day’s total, depending on whether the price closes up or down. The idea behind the OBV is that volume should increase when prices are moving in the direction of the trend and decrease when prices are moving against the trend.

    The OBV can be used to confirm trends and identify potential trend reversals. When the OBV is trending higher along with the price, it suggests that buying pressure is strong and the trend is likely to continue. Conversely, when the OBV is trending lower along with the price, it suggests that selling pressure is strong and the trend is likely to reverse.