Technical Indicators Overview: Organizing Trend, Oscillators, Volatility, and Support Tools

In this section we move into
technical indicators.

• Moving Averages (MA)
• MACD
• Ichimoku
• DMI/ADX
• RSI, Stochastics, CCI
• Bollinger Bands, ATR, ADR
• Fibonacci, volume-based ratios, and more

Names most traders have seen on charts
many times.

The goal here is not:

“RSI is oversold, therefore buy.”

but rather:

“Where does this indicator fit
inside trend, swing structure, and risk management?”

The diagram below shows one price chart with:

• top layer: trend indicators (MAs, MACD, etc.),
• middle layer: oscillators (RSI, Stoch),
• bottom layer: volatility / support tools (Bollinger, ATR)

arranged in separate panels so they don’t visually compete.

Tap to zoom

1. Price First, Indicators Second

Let’s restate the basic hierarchy:

• Price: the actual traded result,
• Indicators: numerical summaries of
  • price,
  • volume,
  • and/or time.

That means:

Indicators are derived from price
and therefore always lag price in some way.

So:

• indicators are excellent decision-support tools, but
• poor replacements for price and structure.

Throughout this section we keep the order:

“Price structure → indicator reading”
not “Indicator signal → chase price.”

2. The Four Indicator Groups We’ll Use

We’ll group indicators into four broad families.

1. Trend indicators
   → trend

   • MA, MACD, Ichimoku, PSAR, DMI/ADX
   • “Is the market up, down, or in a range?”
   • “Are we in a trend-following environment or a wait-and-see phase?”

2. Oscillators
   → oscillators

   • RSI, Stochastics, CCI, dual momentum
   • “Where is this swing in terms of overbought/oversold?”
   • Helps refine entry and exit zones within a trend.

3. Volatility indicators
   → volatility

   • Bollinger Bands, ATR, ADR
   • “How wide is price movement recently?”
   • “How wide should stops and targets be
     for a given volatility regime?”

4. Other tools
   → other

   • Fibonacci tools, volume ratios (VR), etc.
   • Specialty tools for situations
     where depth of retracement, extension,
     or internal participation matters.

Each chapter will focus less on “what’s the formula?” and more on:

“In what context can this help,
and what can it not tell you reliably?”

3. What You Should Always Combine With Indicators

Indicators are almost always misleading
when read in isolation. At minimum, combine with:

1. Trend and swing structure

   • From swing-vs-correction and
     dow:
   • “Are we at the start/middle/end of a swing or trend?”
   • RSI at 70 at the start of a new uptrend
     is not the same as RSI 70
     after a long, exhausted move.

2. Timeframe

   • As discussed in timeframes:
   • 5-minute RSI overbought may be irrelevant
     for a daily swing trade.
   • Decide which timeframe’s structure
     your indicator reading belongs to.

3. Support and resistance

   • The same MACD cross near
     • a major monthly resistance,
     • vs. the middle of a random range
   • will not carry the same weight.
   • See s-r.

4. Risk management rules

   • Indicators can suggest timing,
   • but “How much can I lose?
     When do I give up?” lives in
     risk-management.
   • A beautiful indicator setup
     is not a license to ignore risk.

4. How We’ll Look at Each Indicator Group

Let’s define the lens for each family.

4-1. Trend indicators: summarizing direction and phase

• MA / MACD / Ichimoku / DMI/ADX
  • condense direction and
  • trend strength vs weakness.

We use them more as:

• framework tools to decide:
  • “Is this a trend or a range?”
  • “Is the trend maturing or starting?”
• than as one-shot “buy when it crosses” signals.

4-2. Oscillators: locating swings within trends

• RSI, Stoch, CCI often shine more
  • within trends than
  • in random sideways markets.

Examples:

• In an uptrend:
  • oversold dips can highlight
    pullback buy zones.
• In ranges:
  • oscillator extremes can outline
    mean-reversion bands.

4-3. Volatility indicators: quantifying “how wild” the market is

• ATR, ADR, Bollinger Bands:
  • say less about direction,
  • more about range of movement.

They are key for:

• avoiding stops that are so tight
  they get hit by noise, and
• sizing positions in line with
  consistent risk per trade.

4-4. Other tools: context-specific instruments

• Fibonacci, VR, etc.
  • are more like specialized instruments
  • for cases where:
    • retracement depth,
    • extension targets,
    • or internal volume structure
  • are specifically relevant.

5. Suggested Study Order

Instead of memorizing every indicator at once,
group them by role.

1. Review core structure

   • candles
   • s-r
   • swing-vs-correction
   • timeframes
   • volume

2. Current chapter: indicators overview

   • just get the map of roles.

3. Trend indicators

   • trend

4. Oscillators

   • oscillators

5. Volatility indicators

   • volatility

6. Other tools

   • other

6. Minimal Principles to Carry into Live Trading

Three simple rules to keep in mind:

1. Price structure → indicator, not the other way around

   • read structure first,
   • then see what indicators add.

2. Use indicators by role, not as a voting committee

   • mixing trend + oscillators + volatility
     and waiting for “all to agree”
     can mean never trading.

3. Always stay anchored in risk management

   • strong indicator confluence
     doesn’t justify ignoring risk-management.

From the next chapters on,
we’ll go through each group in detail:

• how it’s built,
• what it’s good at,
• and where its blind spots are.