Candleread
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Grade 6 of 10

Indicator Lab

The four indicators everyone talks about, and what they can and cannot tell you on any chart.

39 lessons · about 115 minutes · Badge: Indicator Whiz

0/39
Start Grade 6

After this grade you can

  • Use a moving average to see the trend
  • Read RSI without the common mistake
  • Read the MACD histogram
  • Know why every indicator is late

Lessons

Moving Averages

  1. 1SMA vs EMA: the formula differenceDistinguish a simple moving average from an exponential moving average using their actual formulas.3 min
  2. 2Common periods: 9, 20, 50, 100, 200Identify the standard moving-average periods and what each one is typically used for.3 min
  3. 3The 200 EMA as institutional referenceExplain why the 200-period moving average on a daily chart functions as the bull/bear demarcation line.3 min
  4. 4Golden cross and death cross: the statistical realityExplain what golden and death crosses are and justify why they often arrive after most of the move.3 min
  5. 5Moving averages as dynamic support and resistanceExplain how moving averages act as dynamic support in uptrends and resistance in downtrends.3 min
  6. 6Moving-average ribbons: stacking multiple periodsApply a moving-average ribbon to assess trend strength and alignment across multiple periods.3 min
  7. 7VWAP: volume-weighted average priceExplain what VWAP is, why it resets daily, and how institutions use it as an intraday bias line.3 min
  8. 8The lag problem: why MAs are always lateExplain why every moving average lags price and what that means for entry timing.3 min
  9. 9When MA crossovers lie: chop kills the signalIdentify when MA crossover signals are unreliable and explain why they fail in choppy markets.3 min
  10. 10Wilder smoothing vs standard EMADistinguish Wilder smoothing from the standard EMA and explain why some indicators use it instead.3 min

RSI Done Right

  1. 11The RSI formula, derivedDerive the RSI formula from average gain and average loss using Wilder's smoothing.3 min
  2. 12The 30, 70, and 50 linesExplain what the 30, 70, and 50 RSI levels mean and why all three matter.3 min
  3. 13Overbought is not a sell signalDistinguish the meaning of RSI above 70 in trending versus ranging markets.3 min
  4. 14Regular bullish and bearish divergenceIdentify regular bullish and bearish RSI divergence on a chart.3 min
  5. 15Hidden divergence: the continuation flavorDistinguish hidden divergence from regular divergence and explain why one signals continuation.3 min
  6. 16RSI in trending vs ranging marketsApply RSI differently depending on whether the current market is trending or ranging.3 min
  7. 17The failure swingIdentify a Wilder failure swing on RSI and explain why it signals trend exhaustion.3 min
  8. 18Multi-timeframe RSI alignmentApply a top-down RSI read across higher and lower timeframes to filter setups.3 min
  9. 19Choosing an RSI periodJustify a chosen RSI period based on trading style and timeframe.3 min
  10. 20RSI used standalone, the disciplined wayApply RSI as a standalone read using regime-aware rules from earlier lessons.3 min

MACD

  1. 21The MACD formula, in plain EnglishExplain how MACD is built from three moving averages and what each line represents.3 min
  2. 22Reading the histogramIdentify what a growing, shrinking, or flipping histogram tells you about momentum.3 min
  3. 23Signal line crosses, and their lagExplain how MACD/signal crossovers generate trade triggers and why those triggers always lag.3 min
  4. 24Zero-line crossesDistinguish a MACD zero-line cross from a signal-line cross and explain what each event implies.3 min
  5. 25MACD divergenceIdentify regular and hidden MACD divergence and explain what each implies for the next move.3 min
  6. 26MACD in choppy markets: where it liesExplain why MACD generates the most false signals in ranging conditions and how to recognize when to ignore it.3 min
  7. 27Centerline rejectionsIdentify when MACD bounces off the zero line and explain why those rejections often mark trend continuations.3 min
  8. 28MACD across timeframesApply MACD reads from a higher timeframe as a bias filter for entries on a lower timeframe.3 min
  9. 29MACD vs PPODistinguish MACD from PPO and justify when PPO is the better tool for cross-asset comparison.3 min
  10. 30Parameter tweaks: 12/26/9 vs the alternativesJustify when to deviate from default MACD settings and apply the trade-offs between faster and slower parameters.3 min

Stochastic and Momentum

  1. 31The stochastic formula, derivedDerive %K from the close, the lowest low, and the highest high over the lookback window.3 min
  2. 32%K vs %D, and the smoothing layerDistinguish the raw %K line from the smoothed %D signal line and explain why a signal line exists.3 min
  3. 33The 80/20 overbought and oversold levelsRead the 80 and 20 horizontal levels as alert zones, not automatic reversal triggers.3 min
  4. 34Fast stochastic vs slow stochasticDifferentiate the two-line fast version from the additionally smoothed slow version and pick the right one for your read.3 min
  5. 35Convergence and divergence between price and stochasticIdentify regular and hidden divergence patterns between price action and stochastic.3 min
  6. 36When stochastic liesRecognize the three classic failure modes where stochastic readings actively mislead.3 min
  7. 37Stochastic RSI - stochastic applied to RSIUnderstand StochRSI as a derived indicator and use it with appropriate caution given its added sensitivity.3 min
  8. 38True Strength Index (TSI), introductionIntroduce TSI as a double-smoothed momentum oscillator and compare its read to stochastic's.3 min
  9. 39Stochastic standalone, the disciplined wayApply stochastic as a standalone read using regime-aware rules from earlier lessons.3 min

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