Indicators that matter: moving averages, RSI, MACD and ATR
In this lesson you'll learn
- What the four most useful indicators actually measure
- How to use them as filters, not signals
- Why stacking indicators doesn't help
Indicators are calculations of price
Every indicator is a formula applied to price (and sometimes volume). It can't know more than price; it can only summarise it. Use indicators to answer specific questions, not to generate trades on their own.
Four that earn their place
| Indicator | Question it answers | Common use |
|---|---|---|
| Moving average (e.g. 50 and 200 EMA) | What's the trend? | Trade only in its direction; pullbacks to it |
| RSI (14) | How strong is the recent move? | Above 70 / below 30 = stretched; divergence |
| MACD | Is momentum increasing or fading? | Crossovers and divergence as confirmation |
| ATR (14) | How much does it usually move? | Stop distance and position sizing |
Overbought doesn't mean "sell"
In a strong uptrend, RSI can stay above 70 for weeks. Treat it as information ("the move is stretched") and combine it with structure and levels.
Why more isn't better
RSI, Stochastic and CCI all measure momentum in similar ways. Showing three of them is one opinion repeated three times. Pick one indicator per question: trend, momentum, volatility.
Settings
Default settings (14 for RSI and ATR, 50/200 for averages) are widely watched, which is part of why they work. Endless tweaking usually fits the past, not the future.
Common mistakes
- Selling just because RSI is above 70.
- Using several indicators that measure the same thing.
- Optimising settings until the past looks perfect.
Check yourself
1. Which indicator helps set stop distance?
2. RSI above 70 in a strong uptrend means…
3. Why avoid RSI + Stochastic + CCI together?
Key takeaways
- Indicators summarise price; they don't predict it.
- One indicator per question: trend, momentum, volatility.
- Use them as filters alongside structure and levels.
Education, not advice. Goldman Academy teaches how markets and tools work. Nothing here is a recommendation to buy or sell, and no lesson promises profits. Trading leveraged products carries a high risk of losing money; only trade money you can afford to lose. · Written by Goldman Academy, reviewed by Faisal