There are thousands of indicators, but most are modified versions of about 20 core ideas. Understand those twenty and which family each belongs to, and you can read any new indicator in a minute — and you will notice when your setup keeps repeating the same information.
Why four families?
Every indicator answers one question only:
- Trend: where is the market going?
- Momentum: how strong is the move, and is it tiring?
- Volatility: how much is price moving, and how far should the stop be?
- Volume: is real money behind the move?
All of them are calculated from past price (and volume). None of them predicts — they describe what already happened in a clearer way.
Trend indicators (1-7)
| Indicator | What it tells you | Common settings | Where it fails |
|---|---|---|---|
| 1. Simple moving average (SMA) | The broad trend as a smooth line | 50 · 200 | Lags, and crosses back and forth in a range |
| 2. Exponential moving average (EMA) | The same idea, faster | 20 · 50 · 200 | More false signals than the SMA |
| 3. MACD | The gap between two averages: trend and momentum together | 12 · 26 · 9 | Late at sharp reversals |
| 4. SuperTrend | A trend line that flips colour on a break, usable as a trailing stop | 10 · 3 | Flips back and forth in chop |
| 5. Parabolic SAR | Dots above or below price for trend and trailing stop | 0.02 · 0.2 | Very weak in a sideways market |
| 6. Ichimoku | Trend, support and resistance in one system (the cloud) | 9 · 26 · 52 | Busy, and needs learning before use |
| 7. ADX | Trend strength, not direction | 14 — above 25 = trending | Does not tell you up or down |
The full story on moving averages and their limits is in the moving averages guide.
Momentum indicators (8-12)
| Indicator | What it tells you | Common settings | Where it fails |
|---|---|---|---|
| 8. RSI | Speed of the move from 0 to 100, overbought or oversold | 14 — above 70 / below 30 | In a strong trend it stays "overbought" while price keeps going |
| 9. Stochastic | Where the close sits within the recent range | 14 · 3 · 3 — above 80 / below 20 | Very sensitive, lots of signals |
| 10. CCI | How far price is from its average | 20 — above 100 / below -100 | Same problem as RSI in a strong trend |
| 11. Williams %R | Close to the Stochastic, on an inverted scale | 14 — above -20 / below -80 | Repeats the Stochastic's information |
| 12. Rate of change (ROC) | Percentage change versus N candles ago | 12 | No fixed overbought/oversold levels |
The strongest use of momentum indicators is not "above 70, sell" — it is divergence: price makes a higher high while the indicator makes a lower high. That tells you the move is tiring, not that it must reverse right away.
Volatility indicators (13-16)
| Indicator | What it tells you | Common settings | Where it fails |
|---|---|---|---|
| 13. Bollinger Bands | A channel around the average that widens and narrows with volatility | 20 · 2 | Touching the upper band is not a sell signal in a strong trend |
| 14. ATR | Average candle range — how much price usually moves | 14 | Never gives direction |
| 15. Keltner Channels | An ATR-based channel, smoother than Bollinger | 20 · 2×ATR | Late on sudden explosions |
| 16. Donchian Channel | Highest high and lowest low of the period — the basis of breakout systems | 20 | Many false breakouts in low volatility |
ATR in particular is one of the most important indicators even though it gives no signal: it tells you how far your stop should be so normal noise does not hit it. Example: gold's ATR on H1 is ten dollars? A five-dollar stop will most likely be taken out by noise.
Volume indicators (17-20)
| Indicator | What it tells you | Common settings | Where it fails |
|---|---|---|---|
| 17. Volume | How much traded in each candle | — | In forex it is your broker's tick volume, not the whole market |
| 18. OBV | Cumulative volume: adds on up candles, subtracts on down candles | — | One huge candle skews it |
| 19. VWAP | Average price weighted by volume during the session | Resets every day | Weak meaning on higher timeframes |
| 20. Volume Profile | Where trading clustered on the price axis (POC and value area) | Session · week | Needs clean volume data |
What about Fibonacci, pivots and order blocks?
These are level tools rather than indicators in the strict sense: Fibonacci (38.2% · 50% · 61.8%) draws likely retracement zones, and pivots compute today's levels from yesterday's high, low and close. Smart Money concepts (order blocks, FVGs) have their own guide: Smart money and liquidity.
The most common mistake: three indicators saying the same thing
RSI, Stochastic and CCI on one chart = the same information three times. When they agree it feels like "confirmation", but they are calculated from the same prices in a similar way. Real confirmation comes from a different family.
A simple, logical combination
- Trend: EMA 200 as a filter — only buys above it, only sells below it.
- Momentum: RSI for timing — wait for a pullback into the 40-50 area in the filter's direction instead of chasing.
- Volatility: ATR for stop distance — for example 1.5 × ATR.
This is not a guaranteed winning strategy — it is a way of thinking. Test it on a demo account before any real money.
From the Yakuzza library
- RSI Divergence Hunter — spots RSI divergences (TradingView).
- MACD TradingView Style — a TradingView-style MACD for MetaTrader 5.
- Supertrend Pullback Signals — SuperTrend with pullback signals.
- ATR + % + SL & 3 Targets Dashboard — stop and targets calculated from ATR.
- Anchored VWAP Trade Planner — VWAP from a start point you choose.
- MTF Pivot+ (Camarilla & CPR) — pivot levels from several timeframes.
- Advanced Fibonacci Golden Zone — the 50%-61.8% zone on its own.
No indicator knows what happens next. Indicators help you see price more clearly and stick to your rules — the decision and the risk stay yours. Leveraged trading can lose you your capital.