Lesson 7: RSI, EMA, MACD – The 3 indicators every trader must know
Now that you know how to read a chart, you will learn to confirm your entries with technical indicators.
They do not provide absolute truth, but they help you avoid bad trades.
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1. RSI (Relative Strength Index) – Knowing when a market is too high or too low
The RSI ranges from 0 to 100. It shows if a crypto is:
Overbought → too high, risk of going down
Oversold → too low, risk of going up
RSI Meaning
> 70 Overbought ⚠️ (may drop)
< 30 Oversold ✅ (good for potential buy)
🧠 Example: If you see a good support + RSI < 30 → you can prepare to buy.
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2. EMA (Exponential Moving Average) – Reading the trend
These are moving averages that smoothly follow the price.
The most used are:
EMA 9 → very fast (short term)
EMA 20 or 50 → medium trend
EMA 200 → large trend (long term)
How do we use them?
If the price is above the EMAs → Bullish trend
If the price is below → Bearish trend
💡 EMA 9 crosses > EMA 20 = possible buy
Inverse crossing = possible sell
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3. MACD (Moving Average Convergence Divergence) – To see the strength of the movement
It shows you if the market has momentum or not.
The MACD has:
Two lines (MACD and Signal)
And bars (histogram)
What we observe:
When the two lines cross upwards = Buy signal
Downwards = Sell signal
The bigger the bars = the stronger the movement
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How to combine them?
When: ✅ The price is on a support
✅ RSI is low (ex: 28)
✅ EMA shows a bullish recovery
✅ MACD crosses upwards
👉 You can enter a trade with confidence
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Coming up:
🔜 Lesson 8 – Japanese candles: how to read market intentions just with shapes