What is MACD and how is it used?
The MACD is an oscillating indicator, fluctuating above and below zero. It is both a trend-following and momentum indicator.
One basic MACD strategy is to look at which side of zero the MACD lines are on in the histogram below the chart. Above zero for a sustainable period of time, and the trend is likely up; below zero for a sustained period of time, and the trend is likely down. Potential buy signals occur when the MACD moves above zero, and potential sell signals when it crosses below zero.
What is the difference between MACD and RSI?
The RSI’s movements are contained between zero and 100.
The RSI provides information about if the price is overbought and due for a correction or oversold and due for a bounce.
What is OBV and how is it used?
OBV takes a lot of volume information and compiles it into a single one-line indicator. The indicator measures cumulative buying/selling pressure by adding the volume on up days and subtracting volume on down days.
A rising price should be accompanied by a rising OBV; a falling price should be accompanied by a falling OBV.