RSI, MACD, Bollinger Bands — What Actually Matters When Trading

Been trading for a while now, and if there's one thing I've learned, it's that indicators are only as useful as your understanding of them. Got into a rabbit hole this morning analyzing charts and figured I'd share what actually works.

**RSI (Relative Strength Index)**

Most people stare at the 70/30 lines and think overbought = sell, oversold = buy. That's a fast way to get rekt. RSI measures momentum — when something's been climbing for a while, it can stay overbought way longer than you'd think. What I look for: divergences. Price making new highs but RSI dropping? That's a warning sign. Classic bearish divergence. Same thing in reverse for bottoms.

The standard 14-period setting works fine for daily charts. Hourly charts? Might want to tighten it up. Just depends on your timeframe.

**MACD**

The moving average convergence divergence. Sounds fancy, actually pretty simple. You've got the fast line, slow line, and the histogram. Crossovers are the obvious signal — fast crosses above slow = potentially bullish, below = potentially bearish. But here's what most people miss: the zero line matters. MACD staying above zero on pullbacks? That's bullish structure. Falling below zero after being up there? Could be the start of a trend change.

The histogram is actually useful for early exits. When the bars start shrinking while price keeps going, that's often a sign the momentum is fading.

**Bollinger Bands**

These give you a visual picture of volatility. Price squeezing near the bands? Low volatility, often before a breakout. Bands expanding? Volatility picking up.

What I use them for: identifying mean reversion opportunities. When price touches the lower band in an overall uptrend, that's often a buying opportunity. Upper band in a downtrend? Could be a short. Not a rule, just a pattern I watch for.

**Putting It Together**

Here's the thing — no single indicator tells the whole story. RSI can say overbought while MACD is just breaking out above zero and Bollinger Bands are expanding. Which one do you listen to? Momentum (RSI), trend (MACD), and volatility (Bollinger) are three different things. You need context from price action itself — where are the support and resistance levels? What's the overall trend?

That's why I started using apps that scan multiple indicators at once. Saves time when you're looking at a bunch of charts. There's a free one called TradeGPT that pulls everything together — patterns, indicators, signals. Not saying it's magic, but it's helpful for quick analysis when you're going through a watchlist.

Free on the App Store: https://apps.apple.com/us/app/tradegpt-stock-chart-scanner/id6758153567

What indicators do you guys rely on most?