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Indicator Guide

What each one does, and how to actually trade with it.

Structure

Where the market itself has decided buyers and sellers commit.

Price Structure

S/R + swing highs/lows, the market’s own footprint

RESISTANCESUPPORT

What it isThe raw support/resistance and swing highs/lows price keeps printing, zero lag, zero smoothing. It is the purest read of where buyers and sellers actually commit, because it is drawn from real transactions, not a formula.

Long

Buy at support and confirmed swing lows where demand has repeatedly stepped in.

Short

Sell at resistance and swing highs where supply has repeatedly capped price.

How to read it
  • A level tested 2–3 times and held is a real level, not a guess.
  • The cleaner the prior reaction, the more weight the level carries.
  • A decisive break-and-hold flips support to resistance (and vice-versa).

Best use. If you keep only one thing on your chart, keep this, everything else is derivative.

Common mistake. Trading a level before it is confirmed, one touch is a hypothesis, not a level.

Pivot Points

PP / R1·R2 / S1·S2, floor-trader auto S/R

R2R1PPS1S2

What it isMechanical support/resistance levels computed from the prior day’s high, low, and close. They give you objective, pre-planned levels before the bell, the same math floor traders have used for decades.

Long

Buy bounces off S1/S2, and trade breakouts through R1.

Short

Sell rejections at R1/R2, and trade breakdowns through S1.

How to read it
  • PP is the day’s fulcrum, above it leans bullish, below it leans bearish.
  • R1/S1 are the most-respected; R2/S2 mark extended moves.
  • Confluence with VWAP or a swing level makes a pivot far more tradable.

Best use. Plan entries and targets the night before, pivots are objective and never repaint.

Common mistake. Treating every pivot touch as a trade, wait for the reaction to confirm.

Volume

The conviction layer, what makes a signal an answer instead of a question.

Volume / RVOL

Raw + relative volume, the confirmation layer

AVG

What it isRaw volume plus relative volume (today versus its average). It is the confirmation layer for every other signal: a breakout without volume is a question, a breakout with volume is an answer.

Long

Confirm a breakout or bounce only when volume expands into the move.

Short

Confirm a breakdown only when sellers show up in size.

How to read it
  • RVOL above ~2× says something unusual is happening worth attention.
  • Volume should expand in the direction of the move, not against it.
  • Falling volume into a push warns the move is running out of fuel.

Best use. Confirm every entry with it, no volume, no conviction.

Common mistake. Chasing a price move that has no volume behind it.

VWAP

The institutional intraday reference line

VWAP

What it isVolume-weighted average price, the intraday level where the most size has transacted, reset every session. It is the reference institutions benchmark against, which makes it self-fulfilling.

Long

Stay long while price holds above VWAP, or buy a clean reclaim of it.

Short

Stay short while price holds below VWAP, or sell a failed reclaim.

How to read it
  • Above VWAP = buyers in control; below = sellers in control.
  • The first test of VWAP after a trend move often sets the day’s bias.
  • Repeated rejections from VWAP confirm which side owns the session.

Best use. Use it as the intraday line of control, bias long above, short below.

Common mistake. Fading VWAP in a strong trend instead of trading with the side that holds it.

Anchored VWAP

VWAP from a chosen moment, cost basis since then

ANCHOR

What it isA VWAP anchored to a specific bar you choose, the session open, a breakout candle, an earnings spike. It is the average cost basis of everyone in the move since that anchor, and acts as support/resistance for it.

Long

Buy holds above the anchored line, the move’s participants are in profit.

Short

Sell breaks below it, the move’s participants are now underwater.

How to read it
  • Anchor it to the event that actually started the move you’re trading.
  • Holding above the anchor means buyers from that point are defending it.
  • A loss of the anchor often marks where the move’s thesis breaks.

Best use. Anchor to the breakout or news bar you actually care about.

Common mistake. Anchoring to a random bar, the anchor has to mean something.

Volume Profile

Volume at each price, POC + value area

POC

What it isA horizontal histogram of how much volume traded at each price, revealing the Point of Control (POC) and value area, the prices the market actually wants to trade at.

Long

Buy the high-volume node / POC acting as a support shelf.

Short

Sell into low-volume air above, where price moves fast with no support.

How to read it
  • The POC is a magnet, price tends to return to it.
  • Low-volume gaps are travelled quickly; high-volume nodes act as walls.
  • The value area frames where “fair” price is for the period.

Best use. High ceiling, high skill floor, it rewards interpretation over signals.

Common mistake. Reading it as a buy/sell trigger instead of a map of where price lives.

Trend

Direction and dynamic support, the rails the move runs on.

Moving Averages

EMA 9 / 50 / 200, trend + dynamic S/R

950200

What it isExponential moving averages over 9, 50, and 200 bars. Together they define the trend and act as dynamic support and resistance that price pulls back to.

Long

Trade long when they stack up (9 > 50 > 200) and price holds the 9/50.

Short

Trade short when they stack down (9 < 50 < 200) and rallies fail there.

How to read it
  • Stacked + sloping the same way = a clean, tradable trend.
  • Pullbacks to the 9 or 50 EMA are the trend’s natural buy/sell zones.
  • Tangled, flat EMAs mean no trend, stand aside.

Best use. Your trend backbone, no babysitting, lag is a feature here.

Common mistake. Using EMAs to call reversals, for that, the lag works against you.

MACD

12/26/9, trend + momentum in one

What it isThe difference between two EMAs, its signal line, and a histogram of the gap. It folds trend and momentum into one read of whether momentum is building or fading.

Long

A bullish cross with a rising histogram confirms upside momentum.

Short

A bearish cross with a falling histogram confirms downside momentum.

How to read it
  • Histogram expanding = momentum accelerating in that direction.
  • Crosses above/below zero mark the broader trend shift.
  • Divergence vs price warns the current move is tiring.

Best use. A strong confirmation tool stacked on top of structure.

Common mistake. Using it as a sole trigger, it lags by construction.

ADX

14, trend strength, not direction

25CHOPTRENDING

What it isThe Average Directional Index measures how strong a trend is, not which way it points. Above ~25 means a real trend is present; below ~20 means chop.

Long

A rising ADX validates that a long trend has fuel to keep going.

Short

A rising ADX in a downtrend validates that the breakdown has legs.

How to read it
  • ADX > 25 → trend-following setups are favored.
  • ADX < 20 → range tactics; trend trades will get chopped up.
  • A turning-up ADX off a low signals a fresh trend beginning.

Best use. A filter, not a trigger, it tells you whether there’s a trend to trade.

Common mistake. Reading ADX as direction, high ADX can mean a strong downtrend.

Momentum

The timing layer, pace and exhaustion within the trend.

RSI

14, momentum oscillator, 0–100

7030

What it isA 0–100 momentum oscillator. Its real value is in divergence and failure swings, not the naive “overbought/oversold” reading most people latch onto.

Long

RSI holding above 50 confirms bullish momentum; bullish divergence flags a low.

Short

RSI capped below 50 confirms bearish momentum; bearish divergence flags a high.

How to read it
  • In a strong trend RSI pins near an extreme and stays there, that’s strength, not a signal.
  • The 50 line is the real bull/bear divide intraday.
  • Price makes a new high but RSI doesn’t = momentum divergence.

Best use. Lean on the 50 line and divergence, not the 70/30 bands.

Common mistake. Shorting at 70 / buying at 30 in a trend, it pins and you get run over.

Volatility

The risk layer, how much room the stock needs and where to put the stop.

ATR

14, the stock’s actual per-bar range

ATRSTOP = N × ATR

What it isAverage True Range, the typical distance a stock moves per bar. It is not a signal; it is the backbone of position sizing and stop placement.

Long

Place stops a multiple of ATR below entry so normal wiggle doesn’t stop you out.

Short

Place stops a multiple of ATR above entry for the same reason.

How to read it
  • Wide ATR → smaller size; tight ATR → you can size up for the same risk.
  • Set stops at N×ATR so noise stays outside your stop.
  • Rising ATR means conditions are getting faster, respect it.

Best use. Size to risk and stop at N×ATR, this is your risk backbone.

Common mistake. Ignoring it and using fixed-dollar stops, that’s how accounts blow up.

Bollinger Bands

20, 2σ, a volatility envelope

SQUEEZE

What it isA ±2 standard-deviation envelope around a 20-period moving average. The real signal is the regime: a squeeze (narrow bands) is compression that precedes expansion.

Long

Buy an expansion that breaks up out of a squeeze with volume.

Short

Sell an expansion that breaks down out of a squeeze with volume.

How to read it
  • Narrow bands (a squeeze) = energy coiling for a move.
  • A band “walk” in a strong trend is continuation, not a reversal.
  • Mid-band (the 20 MA) often acts as dynamic support/resistance.

Best use. Read the regime, squeeze then expansion is the edge.

Common mistake. Naively fading every band touch, in a trend, that’s the wrong side.

How to combine them

None of these works alone. Start with structure to find where price is likely to turn, demand volume confirmation so you’re trading an answer and not a question, check trend alignment with the EMAs, ADX, and VWAP so you’re going with the dominant side, use momentum (RSI, MACD) to time the entry and spot exhaustion, and let ATR set your stop and size so a single trade can never hurt you. Structure tells you where, volume and trend tell you whether, momentum tells you when, and volatility tells you how much.

Educational reference only, not financial advice. Toggle any of these live on the chart.