Technical Indicators Explained: RSI, MACD, ADX, Bollinger Bands, ATR, Stoch RSI, EMA, and SMA
MyHold surfaces eight core technical indicators for each coin. This guide explains what each one measures, how to read it, and how to combine them without falling into single-indicator noise.
Technical indicators are context, not commands
Most investors get into trouble with technical indicators for one reason: they expect a single number to tell them exactly what to do.
That is not what these tools are for.
Technical indicators help you answer a narrower set of questions:
- Is momentum stretched?
- Is the trend strong or weak?
- Is volatility expanding?
- Is price extended versus its recent average?
MyHold pulls the indicator set below on the daily timeframe, using the default exchange and interval configured in the technicals pipeline. The goal is not to turn you into a day trader. The goal is to help you read market context with more discipline.
The indicator set MyHold tracks
MyHold currently surfaces these indicators per coin:
| Indicator | Default setup | Best used for |
|---|---|---|
| RSI | 14 periods | Measuring whether recent price pressure is stretched |
| MACD | 12, 26, 9 | Tracking momentum direction and crossover shifts |
| ADX | 14 periods | Measuring trend strength |
| Bollinger Bands | 20 periods | Gauging volatility and price extension |
| ATR | 14 periods | Measuring raw volatility |
| Stochastic RSI | default fast K / fast D | Measuring how extreme RSI momentum is |
| EMA | 50 and 200 periods | Reading medium and long trend direction |
| SMA | 50 and 200 periods | Reading baseline trend and slower average structure |
Full technical indicator card using the same component shown in MyHold
RSI (14): is recent price pressure stretched?
Relative Strength Index turns recent gains and losses into a score from 0 to 100.
Lower RSI means downside pressure has dominated recent periods, higher RSI means upside pressure has dominated recent periods, and a reading around 50 usually means neither side is clearly in control.
The usual reference points are:
- Below 30: oversold territory
- Around 50: balanced momentum
- Above 70: overbought territory
RSI is useful when you want to see whether a move is becoming stretched and whether it is time to slow down and review context. It is much less useful if you expect it to call the exact bottom or top, especially during strong trends where low readings can stay low and high readings can stay high for longer than most people expect.
If RSI is low while the broader trend is still breaking down, price can stay weak longer than expected. That is why RSI works best as a review signal, not as a blind entry button.
MACD (12, 26, 9): is momentum improving or deteriorating?
Moving Average Convergence Divergence compares two moving averages and gives you three values: the MACD line, which is the gap between the fast and slow averages; the signal line, which smooths that gap; and the histogram, which shows the distance between the two. In practice, a positive histogram suggests bullish momentum is stronger than the signal baseline, a negative histogram suggests bearish momentum is stronger, and a crossover can hint that momentum is changing direction.
MACD is strong when you want to judge whether momentum is strengthening or weakening and when you want more structure than a raw price move alone. It is weaker in sideways markets, where crossovers can appear early and fail quickly.
MACD is most useful when you pair it with a trend filter. A bullish crossover inside a weak, choppy market is far less meaningful than a bullish crossover after a broader down move has already started stabilizing.
ADX (14): how strong is the trend?
Average Directional Index measures trend strength, not trend direction.
That distinction matters.
A high ADX does not mean bullish. It means the current trend, whether up or down, is strong. A low ADX usually means the market is weakly trending or stuck in a range. As a rough guide, readings below 20 often point to noise, 20 to 25 suggests a trend may be forming, above 25 shows strengthening trend conditions, and above 40 usually means the trend is very strong.
The practical ranges are:
- Below 20: weak trend or noise
- 20 to 25: trend may be forming
- Above 25: trend is gaining strength
- Above 40: very strong trend
ADX is most useful when you want to decide whether trend-following signals deserve more respect and whether reversal signals are likely to fail because the current move still has force behind it. What it does not do is tell you direction or give a buy-or-sell decision by itself.
If RSI looks oversold but ADX is very strong, the market may simply be in a strong bearish trend rather than at a durable reversal point.
Bollinger Bands (20): is price extended relative to recent volatility?
Bollinger Bands place an upper and lower band around a moving average.
The middle band is the average baseline, the upper band marks an area where price is extended on the upside, and the lower band marks an area where price is extended on the downside.
The bands widen when volatility expands and tighten when volatility contracts.
Bollinger Bands are useful for seeing whether price is pressing the edges of its recent range, whether volatility is expanding or compressing, and how far price has drifted from its recent average. What they do not do is guarantee reversal just because price touches an outer band.
Price can walk the upper band in a strong rally and hug the lower band in a strong selloff. The bands are context, not automatic reversal markers.
ATR (14): how much does price actually move?
Average True Range is a pure volatility measure. It tells you how much an asset has been moving, in price terms, over the recent period.
Higher ATR means wider daily movement, while lower ATR means calmer trading conditions.
ATR does not tell you direction. It tells you how violent the market is.
ATR is useful for comparing volatility across periods, sizing expectations, and judging whether a move is unusually large or just routine for that asset. It does not tell you trend direction, and it does not tell you whether price is cheap or expensive.
For example, a 5% move in a low-volatility market is meaningful. In a high-ATR market, that same move may be normal noise.
Stochastic RSI: how extreme is RSI momentum?
Stochastic RSI applies a stochastic formula to RSI itself, which makes it more sensitive than regular RSI.
MyHold surfaces fastK, the faster line, and fastD, the smoothed confirmation line. As a rough guide, readings below 20 suggest oversold momentum and readings above 80 suggest overbought momentum.
The main reference points are:
- Below 20: oversold momentum
- Above 80: overbought momentum
Stoch RSI is useful when you want faster confirmation that RSI weakness or strength is becoming more extreme. Its weakness is that it moves constantly and can create noise if you treat every extreme reading as a durable signal.
This indicator moves fast. That is useful for confirmation, but dangerous if you treat every dip below 20 as a trade by itself.
EMA 50 and EMA 200: where is the trend leaning?
Exponential Moving Averages weight recent prices more heavily than older ones, so they react faster than simple moving averages.
MyHold tracks EMA 50 for the medium trend and EMA 200 for the long trend. When EMA 50 sits above EMA 200, traders usually read that as broader bullish structure. When EMA 50 sits below EMA 200, they usually read it as broader bearish structure. You will often hear those shifts described as a golden cross when the shorter average moves above the longer one, and a death cross when the shorter average moves below it.
EMAs are helpful for filtering out noise, reading direction more cleanly than raw candles, and acting as dynamic support or resistance in trending markets. They are less helpful if you need early turning-point signals or clean behavior in sideways markets, where whipsaws are common.
SMA 50 and SMA 200: the slower baseline trend view
Simple Moving Averages do the same averaging job, but every observation gets equal weight.
That makes SMA slower and steadier than EMA.
That matters because EMA responds faster to new price action, while SMA gives you a calmer baseline view.
SMAs work well when you want to read the broader trend without as much short-term sensitivity and when you want to compare current price against a slower structural average. Their tradeoff is slower reaction, which means they are not ideal for catching early momentum shifts.
In practice, EMA and SMA work well together when you want both responsiveness and a slower reference line.
A more neutral reading helps show how the same component behaves outside of stretched conditions
How to combine these indicators without creating noise
A practical stack looks like this:
- Start with trend using EMA 50/200 or SMA 50/200.
- Check ADX to decide whether the trend is strong or mostly noise.
- Use RSI and MACD to judge whether momentum is stretched or improving.
- Use Bollinger Bands and ATR to understand extension and volatility.
- Use Stoch RSI only for faster confirmation, not for the whole thesis.
That approach is much more robust than asking any one indicator to do everything.
A simple way to think about the full set
If you want one-line mental models, think of RSI as a stretched-momentum check, MACD as a momentum-improving-or-deteriorating check, ADX as a trend-strength check, Bollinger Bands as a price-extension check, ATR as a volatility check, Stoch RSI as a short-term momentum-extreme check, EMA 50/200 as a faster trend compass, and SMA 50/200 as a slower baseline trend view.
The right mindset for holders
The best use of technical indicators is not prediction. It is discipline.
They give you a cleaner way to ask whether a move is getting stretched, whether the trend is actually strong, whether volatility is abnormal, and whether you have real confluence or are forcing a decision from one noisy signal.
That is exactly why MyHold surfaces the full indicator stack inside the product. You should be able to review context fast, without opening six tabs and trying to reconcile conflicting chart tools.
If you want to see how these values appear inside notification rules and context paths, read the Market Insights docs and the Context Reference.
Disclaimer
This post is for educational purposes only and does not constitute financial advice. Technical indicators are probabilistic tools, not guarantees. Always do your own research and size positions according to your risk tolerance.