Guide

Trading indicators explained: the 25 that matter and how to read them.

What each indicator measures, how traders actually use it, and where it fails. Every one is free to try on live crypto charts in Genni Charts.

Moving averages

They smooth price into one line so the trend is easier to see.

Exponential Moving Average (EMA)

The average price of the last N candles, with recent candles counted more. Popular lengths are 9, 21, 50 and 200.

How traders read it: Price above a rising EMA suggests an uptrend; below a falling EMA, a downtrend. A fast EMA crossing a slow one (9 over 21) is a classic trend signal.

Watch out: In a sideways market EMAs cross back and forth and give many false signals.

EMA: settings, formula and how to use it

Simple Moving Average (SMA)

The plain average of the last N closes. The 50 and 200 SMA are watched by almost everyone.

How traders read it: The 50 crossing above the 200 is the "golden cross"; below it, the "death cross". Price often reacts when it touches the 200 SMA.

Watch out: It reacts slowly, so signals arrive after a good part of the move.

SMA: settings, formula and how to use it

Weighted Moving Average (WMA)

Like the SMA, but each newer candle counts a little more than the one before.

How traders read it: Read it like an EMA: slope for direction, price crossing it for a change of pace.

Watch out: Rarely better than an EMA; choose one and stay consistent.

WMA: settings, formula and how to use it

Hull Moving Average (HMA)

A moving average built to be smooth and fast at the same time.

How traders read it: Traders watch its slope: turning up is bullish, turning down is bearish.

Watch out: Its speed means it also turns on small pullbacks.

HMA: settings, formula and how to use it

VWAP

Volume Weighted Average Price: the average price paid today, counting each trade by its size.

How traders read it: Day traders treat price above VWAP as buyers in control and below as sellers in control; big funds use it as a fair-price benchmark.

Watch out: It resets every day, so it matters most on intraday charts.

VWAP: settings, formula and how to use it

Bands and channels

They draw a range around price to show when it is stretched.

Bollinger Bands

A 20-period average with a band two standard deviations above and below. The bands widen when the market is volatile and tighten when it is quiet.

How traders read it: A squeeze (very tight bands) often comes before a big move. In a range, touches of the outer bands tend to fade back to the middle.

Watch out: In a strong trend price can ride the upper or lower band for a long time; a touch alone is not a signal.

Bollinger Bands: settings, formula and how to use it

Keltner Channels

An EMA with bands set by the Average True Range instead of standard deviation, so they are smoother than Bollinger Bands.

How traders read it: A close outside the channel shows unusual strength. Bollinger Bands moving inside the Keltner Channel is the well-known "squeeze".

Watch out: Breakouts fail often when volume is low.

Keltner Channels: settings, formula and how to use it

Donchian Channels

The highest high and lowest low of the last N candles.

How traders read it: A close above the upper line is a breakout to a new high: the core of the famous Turtle trading rules.

Watch out: Many breakouts pull straight back; traders usually pair it with a stop below the middle line.

Donchian Channels: settings, formula and how to use it

Ichimoku Cloud

Five lines that show trend, momentum and future support or resistance in one picture.

How traders read it: Price above the cloud is bullish, below is bearish, inside is undecided. A thick cloud is strong support or resistance.

Watch out: It looks busy at first and is slow on short timeframes.

Ichimoku: settings, formula and how to use it

Trend

They answer one question: is the market trending, and which way?

SuperTrend

A line that trails price using the Average True Range. It flips from below price (green) to above (red) when the trend changes.

How traders read it: Simple to read: stay long while price is above the line, stay out or short while it is below. It also works as a trailing stop.

Watch out: Whipsaws in a range; many traders only take it in the direction of a higher timeframe.

SuperTrend: settings, formula and how to use it

Parabolic SAR

Dots that trail price and speed up as the trend continues.

How traders read it: Dots under price mean uptrend; dots above mean downtrend. A flip is a possible exit.

Watch out: Flips constantly in sideways markets.

Parabolic SAR: settings, formula and how to use it

ADX / DMI

ADX measures how strong a trend is (not its direction); +DI and -DI show which side is stronger.

How traders read it: ADX above 25 means a real trend, below 20 means a range. +DI above -DI means buyers lead.

Watch out: ADX rises late, after the trend has started.

ADX: settings, formula and how to use it

Oscillators

They swing between fixed levels and show momentum and overbought or oversold conditions.

Relative Strength Index (RSI)

A 0 to 100 reading of how strong recent gains are against recent losses. The standard length is 14.

How traders read it: Above 70 is overbought and below 30 is oversold. Divergence (price makes a new high but RSI does not) warns that a move is tiring.

Watch out: In a strong uptrend RSI can stay above 70 for weeks; overbought does not mean "sell now".

RSI: settings, formula and how to use it

MACD

The gap between the 12 and 26 EMA, a 9-period signal line, and a histogram of the difference.

How traders read it: The MACD line crossing above its signal line is bullish, below is bearish. Above zero the bigger trend is up.

Watch out: It is built from averages, so it lags in fast markets.

MACD: settings, formula and how to use it

Stochastic

Where the close sits inside the recent high-low range, from 0 to 100.

How traders read it: Above 80 is overbought, below 20 oversold; crosses of its two lines give the signals.

Watch out: Best in ranges; in trends it stays pinned at the extremes.

Stochastic: settings, formula and how to use it

Stochastic RSI

The Stochastic formula applied to RSI, which makes it faster and more sensitive.

How traders read it: Used for early timing of pullbacks inside a trend.

Watch out: Very jumpy: confirm with something slower.

Stochastic RSI: settings, formula and how to use it

CCI

Commodity Channel Index: how far price is from its average, in units of normal deviation.

How traders read it: Above +100 shows strong upside momentum, below -100 strong downside.

Watch out: The levels are not hard limits; it can run far beyond them.

CCI: settings, formula and how to use it

Williams %R

A close cousin of Stochastic, plotted from 0 to -100.

How traders read it: Above -20 is overbought, below -80 oversold.

Watch out: Gives the same information as Stochastic; no need to use both.

Williams %R: settings, formula and how to use it

Rate of Change (ROC)

The percentage price change over the last N candles.

How traders read it: Above zero momentum is positive; a rising ROC means the move is speeding up.

Watch out: One old candle leaving the window can swing it sharply.

ROC: settings, formula and how to use it

Volume and volatility

They show how much is being traded and how big the moves are.

Volume

How much was traded in each candle.

How traders read it: Moves on rising volume are more trustworthy than moves on falling volume. A huge volume spike often marks a turning point.

Watch out: Volume differs from exchange to exchange.

Volume: settings, formula and how to use it

On-Balance Volume (OBV)

A running total that adds volume on up candles and subtracts it on down candles.

How traders read it: OBV rising while price is flat can show quiet buying before a breakout.

Watch out: The absolute number means nothing; only its direction matters.

OBV: settings, formula and how to use it

Money Flow Index (MFI)

An RSI that also counts volume.

How traders read it: Above 80 overbought, below 20 oversold, with divergences read like RSI.

Watch out: Thin volume makes it noisy.

MFI: settings, formula and how to use it

Average True Range (ATR)

The average size of a candle, including gaps. It measures volatility, not direction.

How traders read it: Used to set stops and position size: a stop 1.5 to 2 ATR away sits outside normal noise.

Watch out: It says nothing about where price will go.

ATR: settings, formula and how to use it

Crypto derivatives

Data from the futures market that spot charts do not show.

Funding rate

The fee perpetual-futures traders pay each other every 8 hours to keep the contract near the spot price.

How traders read it: High positive funding means longs are crowded (and paying); negative funding means shorts are crowded. Extremes often come before a squeeze the other way.

Watch out: A crowded trade can stay crowded for a long time.

Funding rate: settings, formula and how to use it

Open interest

The total value of futures contracts still open.

How traders read it: Price and open interest rising together shows new money entering; price rising while open interest falls shows shorts closing.

Watch out: Read it together with price and funding, never alone.

Open interest: settings, formula and how to use it

Questions

Frequently asked questions

What is the best trading indicator?
There is no single best indicator. Each one answers a different question: moving averages show trend, RSI and MACD show momentum, Bollinger Bands and ATR show volatility, and volume confirms whether a move has real participation. Most traders combine one from each group instead of stacking several that say the same thing.
Which indicators work best together?
A common, simple mix is a trend filter (the 200 EMA or SuperTrend), a momentum trigger (RSI or MACD) and ATR for the stop distance. Avoid pairing indicators built from the same maths, such as RSI with Stochastic, because they agree with each other and add no new information.
Are trading indicators reliable?
Indicators are calculated from past prices, so they describe what has happened; they do not predict. They help you be consistent, but every indicator gives false signals, especially in sideways markets. Test any rule on past data before trusting it, and always decide your exit before you enter.
How many indicators should I use?
Two or three is usually enough. More lines on the chart tend to cause hesitation rather than better decisions.
Can I try these indicators for free?
Yes. All 25 indicators on this page are free on Genni Charts with live crypto prices, and you can also paste your own TradingView Pine Script indicators.

This page is education, not investment advice. Trading involves substantial risk of loss. Read next: Trading indicators · Trading strategies · Candlestick patterns