Indicators & momentum: RSI, MACD, volume and the squeeze
Big moves often start quietly — volatility shrinks before it explodes.
Analyst · 11 min · Updated 2026-11-08
💡 A coiled spring and a car speedometer
Momentum indicators are like a speedometer: RSI and MACD tell you how fast price is moving and whether it is accelerating or braking. Volatility measures are like a spring: when Bollinger Bands squeeze tight, the spring is compressed. A compressed spring stores energy — but it can release in either direction.
Four families of indicators
| Family | Examples | Question it answers |
|---|---|---|
| Trend | EMA/SMA 20-50-200, Supertrend, Ichimoku, ADX | Which way, and how strongly? |
| Momentum | RSI, MACD, Stochastic, ROC, Awesome Oscillator | Is the move accelerating or fading? |
| Volatility | Bollinger Bands, Keltner Channels, ATR, BB width | Is the market calm or wild? |
| Volume / flow | Volume vs average, OBV, MFI, CMF, VWAP | Is real money behind the move? |
Reading the classics
- RSI (14): 0–100. Above 70 = stretched up, below 30 = stretched down. In strong trends RSI can stay "overbought" for weeks; crossing back through 50 often says more.
- MACD: difference between a fast and slow EMA. A histogram flipping from negative to positive shows momentum turning up.
- ADX: trend strength, not direction. Above ~20–25 and rising = a trend is developing.
- Divergence: price makes a new high but RSI does not — momentum is fading.
"Before the big move": coiling conditions
- Squeeze: Bollinger Bands contract inside Keltner Channels — volatility at a low.
- Accumulation: OBV rising while price moves sideways — volume quietly favours buyers.
- Proximity: price sitting just under a range high or resistance.
- Ignition: a breakout close on 2× average volume, MACD crossing up, ADX starting to rise.
The Momentum Scanner ranks pairs by exactly these observable conditions. It cannot know direction or timing — a squeeze can fire downward — and many setups never move at all.
Avoid indicator overload
Most indicators are calculated from the same price data, so adding ten oscillators mostly repeats one opinion. Pick one from each family, learn its failure modes, and test it with paper trading first.
🧮 Practical example: reading a squeeze
Key takeaways
- Use one indicator per family: trend, momentum, volatility, volume.
- Squeezes store energy but not direction.
- Volume confirms; divergence warns.
- Indicators describe the past — test before trusting.
Education only — not financial advice.