Technical indicators explained: moving averages, RSI, MACD, Bollinger Bands and more

By the Ozelinx editorial team · Published 2026-10-23 · Updated 2026-10-23 · 10 min read

Our live chart lets you overlay a range of indicators and switch the lower pane between oscillators. This guide explains what each one calculates and how traders commonly use it. All of them are computed from the same candles you see on the chart, so they inherit the same strengths and weaknesses as the underlying data.

Moving averages: SMA, EMA and WMA

A simple moving average (SMA) is the average closing price over the last n candles. A 50-period SMA on a daily chart is the average close of the last 50 days.

An exponential moving average (EMA) gives more weight to recent prices, so it reacts faster. A weighted moving average (WMA) also emphasises recent data, using linearly decreasing weights.

How traders use them:

• Trend direction. Price above a rising average suggests an uptrend; below a falling average, a downtrend.
• Dynamic support and resistance. In trends, price often pulls back towards the 20 EMA or 50 SMA.
• Crossovers. A shorter average crossing above a longer one (for example the 50 above the 200) is read as bullish; the reverse as bearish. Crossovers lag, so they confirm trends rather than catch turning points.

RSI (Relative Strength Index)

RSI compares the size of recent gains with recent losses and scales the result from 0 to 100, usually over 14 periods using Wilder’s smoothing. Readings above 70 are labelled overbought and below 30 oversold.

In a range, RSI extremes often line up with turning points. In a strong trend, RSI can stay overbought or oversold for weeks. Many traders watch for divergence — price making a new high while RSI makes a lower high — as a sign of weakening momentum.

MACD

The MACD line is the difference between the 12- and 26-period EMAs. A 9-period EMA of that line is the signal line, and the histogram shows the gap between the two. MACD crossing above its signal line is a common momentum signal; the histogram shrinking shows momentum fading. Because it is built from moving averages, MACD lags price.

Stochastic oscillator

The Stochastic shows where the close sits within the high–low range of the last 14 candles, from 0 (at the low) to 100 (at the high). The smoothed %K line and its moving average, %D, are plotted together. Readings above 80 and below 20 mark the top and bottom of the recent range. Like RSI, it is most useful in sideways markets.

CCI (Commodity Channel Index)

CCI measures how far the typical price ((high + low + close) ÷ 3) is from its moving average, relative to the average deviation. Values above +100 or below −100 indicate an unusually strong move away from the average. Despite the name, it is used on every market.

Bollinger Bands

Bollinger Bands draw a 20-period SMA with bands two standard deviations above and below. The bands widen when volatility rises and narrow when it falls. A squeeze (very narrow bands) often comes before a large move, though it does not tell you the direction. Touching a band is not by itself a buy or sell signal; in strong trends price can “walk the band”.

Donchian channels

Donchian channels plot the highest high and lowest low of the last 20 candles. A close above the upper channel is a classic breakout signal used by trend-following systems. The channel also gives a simple, objective level for trailing stops.

ATR (Average True Range)

ATR measures volatility: the average size of each candle’s true range (including gaps from the previous close) over 14 periods. It says nothing about direction. Traders use it to set stops that respect normal price swings — for example, placing a stop 1.5 × ATR away — and to size positions so that each trade risks a similar amount. Our position size calculator turns a stop distance into a position size.

OBV (On-Balance Volume)

OBV adds the candle’s volume when the close is up and subtracts it when the close is down, producing a running total. Rising OBV alongside rising price suggests buying volume supports the move; a flat or falling OBV during a rally is a warning sign.

VWAP

The volume-weighted average price is the average price weighted by volume, reset at the start of each day (00:00 UTC on our chart). Intraday traders use it as a fair-value reference: price above VWAP means buyers have paid up on average during the session.

Using indicators sensibly

• Know which market you are in. Trend tools give false signals in ranges; oscillators give false signals in trends.
• Avoid redundancy. RSI, Stochastic and CCI all measure momentum; using all three adds little.
• Test before trusting. Check how an indicator behaved on past data for your coin and timeframe.
• Combine with risk management. No indicator replaces a stop-loss and sensible position size.

For the price-action basics behind every indicator, start with how to read candlestick charts.

This guide is general information, not financial advice. Crypto assets are volatile and you can lose all the money you invest. See our risk disclaimer.