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Chart analysisReading time: 8 min06 / 9
EMA, RSI, and Bollinger Bands
What chart indicators show and why one indicator is never enough.
1
EMA moving averages
EMA 20 reacts faster to recent price changes, while EMA 50 shows a smoother direction. Their position can describe a trend, but a crossover alone does not guarantee a reversal.
2
RSI
RSI measures the strength of recent movement. A high or low reading describes intensity; it does not promise an immediate move in the opposite direction.
3
Bollinger Bands
The bands reflect current volatility. Expansion indicates a wider price range and contraction shows lower activity. Touching a band is not a standalone trading command.
- Combine independent signals.
- Account for the broader direction.
- Do not ignore news or unusual volatility.