Indicators used to identify price movement, act as a supporting tool, not a decision maker, requires understanding of demand and supply, ready made analysis.

Moving Average:
1) Open price charts and apply MA(21 days for one month trend).
2) Price above average implies Bullish and price below average implies bearish.
3) MA works exceptional on trend but pathetic in sideways. remember equilibrium, magnet, MA works like that. prices are attracted to MA (bearish) Prices repealed from MA(bullish).

RSI (Relative strength Index)
1) Works exceptional in sideways, non-trending indicator.
2) Prices above 70 gives strength, comes back to 70 indicates over-bought , tired of buying and expect temp weakness to happen, indicates sell below 70.
3)Prices below 30 shows selling pressure, back to 30 indicates over-sold, tired of selling and expect temp weakness to happen, indicates buy above 30.

1 Comment
  1. Author
    Kathir R 6 years ago

    Forget to add the below question.
    What will be good period set up for RSI? Is it still stands 14 days like MA?

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