#TradingTools101

RSI (Relative Strength Index), MACD (Moving Average Convergence Divergence), and Moving Averages are essential technical indicators used in financial markets to analyze price movements and identify potential trading opportunities.

Moving Averages (MA) smooth out price data over a specific period, helping to identify trends and potential support/resistance levels. A simple moving average (SMA) is the average of closing prices over a set period, while an exponential moving average (EMA) gives more weight to recent prices. Crossovers of different moving averages often signal trend changes.

RSI (Relative Strength Index) is a momentum oscillator that measures the speed and change of price movements. It oscillates between 0 and 100, typically indicating overbought conditions above 70 and oversold conditions below 30. Traders use RSI to identify potential reversals or confirm trend strength.

MACD (Moving Average Convergence Divergence) is a trend-following momentum indicator showing the relationship between two moving averages (usually 12-period and 26-period EMAs). It comprises the MACD line, a signal line (9-period EMA of the MACD line), and a histogram. Crossovers of the MACD line and signal line, as well as divergence between MACD and price, are key signals for trend shifts and momentum.