Chart indicators cheat sheet.

Every indicator in this module is built from past prices, usually the open, high, low and close of each bar. This sheet puts all seven side by side.

The settings below are common textbook defaults. Platforms differ, so check yours before you compare readings with someone else's chart.

Which indicator measures what?

Each indicator answers one narrow question about price, so start with the question. Bollinger Bands, Parabolic SAR and Ichimoku are drawn on the price chart. The other four sit in a panel below, on their own scale.

Trend tools: MACD, Parabolic SAR and Ichimoku

MACD is the 12-period exponential moving average (EMA) minus the 26-period EMA. Its signal line is a 9-period EMA of that result, and the histogram is the gap between the two lines.

Parabolic SAR puts a dot below price in an uptrend and above it in a downtrend. The dot creeps closer each bar, so it can double as a trailing stop.

Ichimoku draws five lines. Its cloud is plotted 26 periods ahead: price above it reads as an uptrend, below it as a downtrend.

All three confirm a move after it starts. In a sideways market they give a string of small wrong signals, called whipsaws.

Oscillators: RSI and the stochastic

RSI compares average gains with average losses over 14 periods. The stochastic shows where the latest close sits in the high-low range of the last 14 bars. Both run from 0 to 100.

ADX uses the same scale, with thresholds that mark trend strength in either direction.

Overbought only means price rose fast over the lookback period. In a strong uptrend RSI can stay above 70 while price keeps climbing.

Divergence, where price makes a higher high while RSI makes a lower high, warns that momentum is fading, sometimes long before price turns.

Volatility and strength: Bollinger Bands and ADX

Bollinger Bands sit two standard deviations above and below a 20-period simple moving average. A tight squeeze shows low volatility but no direction, so traders usually wait for a close outside a band.

ADX rises when price moves strongly either way, so a falling market can show a high ADX. Its +DI and -DI lines supply the direction: +DI above -DI points up.

Worked example: five readings on one chart

Take an illustrative daily EUR/USD chart. Over 14 bars the high is 1.1050, the low is 1.0950 and the latest close is 1.1030.

1. Range = 1.1050 − 1.0950 = 0.0100, or 100 pips.
2. Close above the low = 1.1030 − 1.0950 = 0.0080, or 80 pips.
3. Stochastic %K = 80 ÷ 100 × 100 = 80.

Now suppose the 14-period average gain is 14 pips and the average loss is 6 pips.

1. RS = 14 ÷ 6, so RSI = 100 − 100 ÷ (20/6) = 100 − 30 = 70.

For Bollinger Bands, take a 20-period average of 1.1000 and a standard deviation of 0.0020.

1. Upper band = 1.1000 + 2 × 0.0020 = 1.1040, and the lower band is 1.0960. The close is 10 pips under the upper band.

For MACD, take a 12-period EMA of 1.1022, a 26-period EMA of 1.1010 and a signal line at 0.0015.

1. MACD = 1.1022 − 1.1010 = 0.0012, and the histogram is 0.0012 − 0.0015 = −0.0003.

ADX reads 18, under the usual weak-trend level of 20.

Together, both oscillators sit at their upper thresholds, price is near the upper band, MACD is positive but slowing, and no strong trend shows. That fits price near the top of a range, and it is no forecast.

Mistakes that come from using a cheat sheet

RSI and the stochastic measure momentum from the same bars, so their agreement above adds little. The lesson on combining indicators pairs tools from different groups.

Reading overbought as sell and oversold as buy fails in strong trends. Tuning settings until an old chart looks perfect is called curve fitting, and it often does worse on new data.

Published tests of default signals give mixed results that depend on the market, the period and the costs counted.

Every tool here reacts to price after the fact. The leading and lagging indicators lesson explains what that delay means for entries.