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Lesson 7 of 14 · Free

Indicators: the few that help

Moving averages, RSI, volume and ATR — how to use them without cluttering your chart.

Author: Moustafa HijaziContent reviewed: 2026-10-301 min readSelf-study course

Beginners pile six indicators on one chart and get six contradicting opinions. Indicators are derived from price — they can confirm, but they can't predict. Use at most two.

Moving averages (20/50/200 EMA)

Define the trend and act as dynamic support/resistance. Price above a rising 50 EMA: look for longs only.

RSI (14)

Measures momentum from 0 to 100. In a trend, RSI pulling back to 40–50 (uptrend) is a better “buy the dip” signal than the classic “below 30 is oversold”. Divergence (price makes a new high, RSI doesn't) warns that momentum is fading.

Volume

Breakouts on high volume are more reliable. A rally on falling volume is suspicious.

ATR (Average True Range)

Measures how much an instrument moves per candle on average. Use it to place stops: a stop 1.5–2× ATR away from entry survives normal noise. This single trick fixes the most common beginner problem — stops that are too tight.

SetupOur recommended chart: candlesticks, 20 & 50 EMA, volume, ATR in a small panel. Nothing else.

Self-check

Answer the questions, then check your answers. You can retry as often as you like.

1. What can indicators do, according to the lesson?

2. You plan a long trade at €30. The ATR is €1.20. Using a stop 1.5× ATR from entry, where is the stop?

3. In an uptrend, which RSI reading does the lesson call a better 'buy the dip' signal?

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