Technical Indicators : Macro Timeframe

Technical indicators DO NOT tell you what to do. They supplement your decision-making by revealing trends within the data

To be consistently profitable, you need an EDGE. I've developed my edge by learning to identify and align multiple variables, to supplement my swing and intraday trading.Multi-Day Technical Indicators

SMA : Simple Moving Average
RSI : Relative Strength Index

What the heck is this? Let me explain...

Big Picture Timeframe

Macro indicators are meant to evaluate trade potential from a big-picture perspective, while intraday indicators are intended to assess trade potential at the micro-level of analysis. The 4-hour, Daily, and Weekly time frames are considered macro time frames of analysis used to zoom out and evaluate the bigger picture. Macro times frames can be used to identify bigger trends, find long-term support & resistance, or time an entry on a smaller timeframe. Combining Macro and Intraday technical Indicators create layers of context to enrich decision-making. These signals are not meant to tell traders precisely what to do but instead exist as bullish, bearish, or neutral signals. Although indicators supplement trading, too many signals can become unreadable, chaotic, and noisy. The key is understanding how each indicator can work in your favor and adopting the ones that make the most sense for your trading style.
Macro Timeframes

4h
Daily
Weekly

Moving Averages

A Simple Moving Average is a line that shows the asset's average price over a specified time frame. For example, a 50-day SMA is the average closing price of an asset over the past 50 days. SMA is called a "simple" moving average because it gives equal weight to each price point in the calculation. That is, the first data point is given the same weight as the last data point. Simple moving averages (SMA) are used as support and resistance levels.

SMA SupportSMA Resistance

Moving Average Divergence

When two simple moving averages are applied to a chart, their movements against each other can be used as a signal for bearish or bullish divergence. When lower time frame moving averages cross above higher time frame moving averages, it signals bullish momentum. For example, if the 50-SMA crosses above the 200-SMA, it signals bullish momentum. Suppose the 50-SMA crosses below the 200-SMA; that is a bearish signal. If the price is holding above either of the SMA's following a bullish cross, it's signaling for further continuation to the upside. Once the price violates and holds below an SMA, the SMA becomes resistance signaling for downward continuation.Death Cross

When a lower time frame moving average crosses below a higher time frame moving average

Bearish Divergence

Golden Cross

When a lower time frame moving average crosses above a higher time frame moving average.

Bullish Divergence

Slope

It's also essential to observe the slope. The steeper the slope in either direction, the higher the magnitude of momentum.

Relative Strength Index

RSI

Utilization: Intraday/Macro
RSI stands for Relative Strength Index, a popular technical indicator traders use to identify potential buy or sell signals. The RSI measures the strength of an asset's price action by comparing the average gains and losses over a specified period of time.RSI is plotted on a scale of 0 to 100. If the RSI is above 70, it is considered overbought, which means the asset's price may be due for a correction. Conversely, if the RSI is below 30, it is considered oversold, which means the asset's price may be due for a rebound.Traders can use the RSI to identify potential buy or sell signals by looking for divergences between the RSI and the asset's price action. If the price of an asset is making higher highs, but the RSI is making lower highs, it could be a sign of a potential trend reversal. Similarly, if the price of an asset is making lower lows, but the RSI is making higher lows, it could be a sign of a potential trend reversal in the other direction.

RSI Divergence

RSI Divergences are trading signals that indicate either a trend reversal or corrective pullback using a combination of price action and RSI. Remember this

Class A signals are simply stronger signals than class B

Bullish Divergence - Class A

Price decreases while RSI increases within the same timeframe.

Bullish Divergence - Class B

Price remains flat while RSI increases within the same timeframe

Bearish Divergence - Class A

Price increases while the RSI decreases within the same timeframe.

Bearish Divergence - Class B

Price remains flat or "double tops" while RSI decreases.

Overall, the RSI is a useful technical indicator that can help traders identify potential buy or sell signals and determine whether an asset's price action is overbought or oversold. However, like any technical indicator, it should be used in conjunction with other forms of analysis to make informed trading decisions.