RSI, MACD, and Bollinger Bands explained simply

Technical indicators turn raw price into something you can interpret at a glance. Three classics dominate most charting platforms:

Relative Strength Index (RSI). RSI measures momentum on a 0–100 scale. It compares the size of recent gains to recent losses. Conventional thresholds: above 70 = overbought, below 30 = oversold. In strong trends, however, RSI can sit above 70 (or below 30) for weeks — so "overbought" doesn't mean "about to fall". Use it as a sanity check, not a trigger.

Moving Average Convergence Divergence (MACD). MACD is two exponential moving averages plus a histogram. The line is fast-EMA minus slow-EMA (typically 12 and 26 periods). The signal line is an EMA of that line (typically 9 periods). The histogram is the difference. When the histogram crosses above zero, short-term momentum is accelerating up; below zero, the reverse. MACD is a *lagging* indicator — it confirms trends rather than predicting reversals.

Bollinger Bands. Bollinger Bands wrap a 20-period SMA with bands two standard deviations above and below. Wide bands signal high volatility; narrow bands signal a "squeeze" that often precedes a sharp move. Price touching the upper band is *not* a sell signal — it just says the move is statistically extended. Combine bands with momentum (RSI/MACD) to gauge whether the move has fuel left.

Where indicators fail. Indicators describe what *has* happened. They don't know about upcoming earnings, macro shocks, or regulatory news. In choppy markets, signals whipsaw and small accounts get bled by fees. Always combine technicals with fundamentals and risk management.

Educational only — not investment advice.