Lesson 4 of 6 10 min read
Indicators: useful tools, not oracles
Moving averages, RSI and volume — and their limits.
Moving averages
Smooth price to show trend direction. Price above a rising 200-day average is broadly bullish context; below a falling one, bearish.
RSI
Measures momentum from 0–100. 'Overbought' doesn't mean price must fall — strong trends stay overbought for weeks. Divergences are more informative than the raw number.
Keep it simple
Indicators are derived from price, so they lag. Use one or two for context and confirmation, never as the sole reason for a trade.
Key takeaways
- Indicators lag price — use for context.
- Overbought is not a sell signal on its own.
- One or two tools beat ten.
Exercise
Add the 50 and 200-day averages to BTC. Note how price behaved the last three times it touched the 50.
Educational content only, not financial advice. Crypto is volatile and you can lose money.