#TradingTools101 TradingTools101

Let's break it down, explaining each tool and then how to combine them to operate with more precision on Binance or any other exchange:

๐Ÿ“Š Technical Indicators

1. RSI (Relative Strength Index)

What it is: Shows if an asset is overbought (above 70) or oversold (below 30).

How to use:

RSI > 70 = possible reversal from high to low (sell).

RSI < 30 = possible reversal from low to high (buy).

2. MACD (Moving Average Convergence Divergence)

What it is: Shows the direction of the trend and possible entry/exit points.

How to use:

When the MACD line crosses above the signal line โ†’ buy.

When it crosses below โ†’ sell.

The histogram helps visualize the strength of the movement.

3. Moving Averages (MA or EMA)

What it is: Trend indicators based on the average price.

Simple MA (SMA): arithmetic average of prices.

EMA (Exponential): gives more weight to recent prices.

How to use:

Price above the average โ†’ uptrend.

Price below โ†’ downtrend.

Crossover of averages (e.g., EMA 9 crossing above EMA 21) signals entry.

๐Ÿง  How to combine for more precision

๐Ÿ“Œ Basic strategy (example):

Confirm the trend with moving averages

If EMA 9 > EMA 21 โ†’ uptrend.

Confirm momentum with RSI

RSI between 40 and 60 โ†’ balanced market, a good time to wait for confirmation.

RSI < 30 (in uptrend) = good entry opportunity.

Confirm entry with MACD

MACD crossing upwards confirms the buy signal.