RSI as a Momentum Filter

RSI(14) above 50 favors longs; below 50 favors shorts. In trending conditions, use 40–60 as a bias band to avoid counter-trend traps. During ranges, classic 30/70 overbought/oversold works better.

MACD for Trend & Momentum

MACD combines moving averages to show momentum turns. Look for:

• Line Cross: MACD line crossing the signal line in trend direction.
• Zero-Line Cross: Confirms deeper momentum shift.
• Histogram Slope: Rising bars for long momentum; falling for shorts.

Keep entries aligned with the higher-timeframe structure.

Divergences that Matter

• Bullish divergence: Price lower low, RSI/MACD higher low → potential reversal if at support.
• Bearish divergence: Price higher high, RSI/MACD lower high → potential reversal if at resistance.

Wait for a structural trigger (break-retest) before entry.

Entries, Stops & Targets

• Entry: Trend bias (RSI), MACD cross + histogram slope, plus level retest.
• Stop: Beyond invalidation (recent swing) sized to fixed % risk.
• Targets: 1R–3R zones; trail under higher lows/higher highs as trend develops.

See also: Day Trading with Signals · Swing Trading Signals

Copy-Paste Confirmation Checklist

1. What’s the H4/D1 bias? (trend/structure)
2. RSI above/below 50 (or inside 40–60 band)?
3. MACD line cross and histogram slope aligned?
4. Clear level + trigger (engulfing, break-retest)?
5. Stop at invalidation; lot size from risk %.
6. Planned target(s); no mid-trade improvisation.

Common Mistakes

• Using overbought/oversold against a strong trend.
• Taking indicator crosses without structure or level.
• Changing risk mid-trade due to emotions.