How to Use the Stochastic Relative Strength Index (StochRSI) in Trading: A Complete Beginner's Guide
<div data-page-id="VuKLd32Cdot2lIxG2A4uxe8xs3O" data-lark-html-role="root" data-docx-has-block-data="true"><h2 class="heading-2 ace-line old-record-id-doxusipLHi7zjI7zgzg0RDNPgsc"><strong>Key takeaways</strong></h2><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-doxusCT2MzSB5byzYdB4YQzqzgf" data-list="bullet"><div><span style="font-size: 16px;">The Stochastic Relative Strength Index (StochRSI) is a highly sensitive momentum indicator that applies the stochastic oscillator formula to RSI values.</span></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxus7OldjnWzxOOnZCWgxJVkDf" data-list="bullet"><div><span style="font-size: 16px;">The indicator moves between 0 and 100. Readings above 80 indicate overbought conditions, while readings below 20 indicate oversold conditions.</span></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxuskqVNpZs1BDsLJPFXNKxXWg" data-list="bullet"><div><span style="font-size: 16px;">Crossovers between the fast and slow lines are a key way to identify potential buy and sell opportunities.</span></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxus6wpaz2MLH9ZTpMcmRVrKId" data-list="bullet"><div><span style="font-size: 16px;">Different trading timeframes may require different parameter settings to balance signal frequency and accuracy.</span></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxus8wXjfdNgCUNJD9fc7cBLFh" data-list="bullet"><div><span style="font-size: 16px;">You can add StochRSI directly to the chart on MEXC and use it alongside other tools to confirm signals.</span></div></li></ul><div style="text-align:left" class="ace-line ace-line old-record-id-doxusxLn8q230J67tynWnropEfh"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-doxus9Fxao0bxU16SSOh5hJvPmg"><strong>1. What is the Stochastic Relative Strength Index?</strong></h2><div style="text-align:left" class="ace-line ace-line old-record-id-doxusxQsQw0sMOrsGANGjTGkSSe"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusZHA9HAgkgLkvcBZm3ODU8I"><span style="font-size: 16px;">The Stochastic Relative Strength Index (StochRSI) does not measure price directly. Instead, it applies the stochastic oscillator formula to Relative Strength Index (RSI) values, which is why it is often described as an "indicator of an indicator."</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusioazhVo8cWaUSApsmXGU4d"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxus9xnYXopYmmlm3kbWZsAzLf"><span style="font-size: 16px;">StochRSI is calculated by subtracting the lowest RSI value over the past 14 periods from the current RSI value, then dividing the result by the difference between the highest and lowest RSI values over the same period. The result moves between 0 and 100, allowing the indicator to respond quickly to changes in market momentum.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusKq4SMmFirMGTYHd31aLhth"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusC55fCvxvIxA6g1ztaRNIXg"><span style="font-size: 16px;">StochRSI has two lines. The fast line, or K line, tracks the current value and reacts quickly to market changes. The slow line, or D line, is usually a three-period moving average of the fast line. It is smoother and helps filter out noise and confirm signals.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusQBmB0cYHK20noetdrFjo9d"><span style="font-size: 16px;"><br></span></div><div data-type="image" data-ace-gallery-json="{"items":[{"uuid":"85768a4e-bec5-4af2-9f3d-3b2757b9dd48","height":699,"width":1170,"currHeight":699,"currWidth":1170,"natrualHeight":699,"natrualWidth":1170,"pluginName":"imageUpload","scale":1,"src":"https%3A%2F%2Finternal-api-drive-stream.larksuite.com%2Fspace%2Fapi%2Fbox%2Fstream%2Fdownload%2Fpreview%2FK8Vbb1RShoNjjsxus9vuXLyIs1b%2F%3Fpreview_type%3D16","file_token":"K8Vbb1RShoNjjsxus9vuXLyIs1b","image_type":"image/jpeg","size":1,"comments":[]}]}" class="image-uploaded gallery old-record-id-doxlgI0tp4mLQqy6IjbS5416wJf"><img src="https://l7jipx1bfq.larksuite.com/space/api/box/stream/download/asynccode/?code=ZWMwNjA2NjFmNmU0OTk5OTE1Yjg0NzBiNDNmOGNlOWVfNlRUSlBRZEl0OUZHV2dWVVY4MGM1eFA5QzhzUUJKQW5fVG9rZW46SzhWYmIxUlNob05qanN4dXM5dnVYTHlJczFiXzE3ODgyNjk5MzA6MTc4ODI3MzUzMF9WNA&add_watermark=true&scene_type=CCM" data-single-block="true" data-snapshot="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" data-suite="eyJmaWxlVG9rZW4iOiJLOFZiYjFSU2hvTmpqc3h1czl2dVhMeUlzMWIiLCJvYmpUeXBlIjoiZG9jeCIsIm9ialRva2VuIjoiZG94bGdJMHRwNG1MUXF5NklqYlM1NDE2d0pmIiwib3JpZ2luU3JjIjoiaHR0cHM6Ly9pbnRlcm5hbC1hcGktZHJpdmUtc3RyZWFtLmxhcmtzdWl0ZS5jb20vc3BhY2UvYXBpL2JveC9zdHJlYW0vZG93bmxvYWQvcHJldmlldy9LOFZiYjFSU2hvTmpqc3h1czl2dVhMeUlzMWIvP3ByZXZpZXdfdHlwZT0xNiJ9" data-src="https://internal-api-drive-stream.larksuite.com/space/api/box/stream/download/all/K8Vbb1RShoNjjsxus9vuXLyIs1b/?mount_node_token=doxlgI0tp4mLQqy6IjbS5416wJf&mount_point=docx_image" data-width="1170" data-height="699" data-lark-image-uri="drivetoken://K8Vbb1RShoNjjsxus9vuXLyIs1b" data-lark-image-width="1170" data-lark-image-height="699" style="max-width: 100%; height: auto; border-radius: 12px; font-size: 16px;"></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxust8Yj49OFbv38BmriYXsfcc"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-doxus2UZs1hI6ZQEQH6xNTjuDBc"><strong>2. StochRSI parameter settings</strong></h2><div class="ace-line ace-line old-record-id-doxusCKjU53KcIEbVrEihzplW7g"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxus8QKDJmzxXl4p7If3eCEEKd"><span style="font-size: 16px;">2.1 Default settings</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusVANPFxLJ9RnGUOq5uSCIXd"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusrIPvJJSP9FaRwVYKwhSbPd"><span style="font-size: 16px;">The standard configuration uses an RSI Period of 14, a Stochastic Period of 14, Smooth K of 3, and Smooth D of 3. The default overbought and oversold thresholds are 80 and 20, respectively.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusJtzte4aWWshowUfG3h2JJg"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxusT96gZESBpGnavNyPoZbnTg"><span style="font-size: 16px;">2.2 Intraday trading settings for 5-minute and 15-minute charts</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusDWwdTSxtCIIYXQJR7NLWsg"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusjEzwuHtd5xilXUfbRQbXzd"><span style="font-size: 16px;">For intraday trading on 5-minute or 15-minute charts, the default 14, 3, 3 settings are generally a practical starting point. Focus on highly liquid major trading pairs. Because signals appear frequently and may contain more noise, use a strict trend filter before acting on them.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusGciVc2vGbegkM0hBXtEJOh"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxusXG2KLMWqlCUivWi4FHHN5e"><span style="font-size: 16px;">2.3 Swing trading settings</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusQ4v3egMocaTbCCdLw0c5qf"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusfJtvlCrm1WAfo7s7UCWfWd"><span style="font-size: 16px;">For swing trading on the daily chart, consider increasing the period to 21 and the smoothing settings to 5. Slower settings can reduce false signals in choppy markets.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusiIoOtWgHHaDv6MpvmKhfEh"><span style="font-size: 16px;"><br></span></div><div data-type="image" data-ace-gallery-json="{"items":[{"uuid":"fc657db5-bc7c-47ce-b9da-0ec42a1df7e3","height":554,"width":1174,"currHeight":554,"currWidth":1174,"natrualHeight":554,"natrualWidth":1174,"pluginName":"imageUpload","scale":1,"src":"https%3A%2F%2Finternal-api-drive-stream.larksuite.com%2Fspace%2Fapi%2Fbox%2Fstream%2Fdownload%2Fpreview%2FA9URb31HYoUN0GxCfVduGCCDsZf%2F%3Fpreview_type%3D16","file_token":"A9URb31HYoUN0GxCfVduGCCDsZf","image_type":"image/jpeg","size":1,"comments":[]}]}" class="image-uploaded gallery old-record-id-doxlgaD8JQCeOrwNXUrXKUGq7eb"><img src="https://l7jipx1bfq.larksuite.com/space/api/box/stream/download/asynccode/?code=ZDZlNzM3ZDAzMmFhOTRhNmE4YTNmZGMzODMzOGJmNjhfbWJGZHRiMGV6RGVNa3FIbkR4Yk5CSThCZlJnaFhBRTFfVG9rZW46QTlVUmIzMUhZb1VOMEd4Q2ZWZHVHQ0NEc1pmXzE3ODgyNjk5MzA6MTc4ODI3MzUzMF9WNA&add_watermark=true&scene_type=CCM" data-single-block="true" data-snapshot="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" data-suite="eyJmaWxlVG9rZW4iOiJBOVVSYjMxSFlvVU4wR3hDZlZkdUdDQ0RzWmYiLCJvYmpUeXBlIjoiZG9jeCIsIm9ialRva2VuIjoiZG94bGdhRDhKUUNlT3J3TlhVclhLVUdxN2ViIiwib3JpZ2luU3JjIjoiaHR0cHM6Ly9pbnRlcm5hbC1hcGktZHJpdmUtc3RyZWFtLmxhcmtzdWl0ZS5jb20vc3BhY2UvYXBpL2JveC9zdHJlYW0vZG93bmxvYWQvcHJldmlldy9BOVVSYjMxSFlvVU4wR3hDZlZkdUdDQ0RzWmYvP3ByZXZpZXdfdHlwZT0xNiJ9" data-src="https://internal-api-drive-stream.larksuite.com/space/api/box/stream/download/all/A9URb31HYoUN0GxCfVduGCCDsZf/?mount_node_token=doxlgaD8JQCeOrwNXUrXKUGq7eb&mount_point=docx_image" data-width="1174" data-height="554" data-lark-image-uri="drivetoken://A9URb31HYoUN0GxCfVduGCCDsZf" data-lark-image-width="1174" data-lark-image-height="554" style="max-width: 100%; height: auto; border-radius: 12px; font-size: 16px;"></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusC7GQMvLjR8t3lHyuZ8Vcxh"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-doxus4SDQB3d3adbaMA0qPDWBRf"><strong>3. How to interpret StochRSI signals</strong></h2><div style="text-align:left" class="ace-line ace-line old-record-id-doxusfT9S4Xjmr4BSUycXTYmtud"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxus6zUZkArmQPUiDMnop98qQf"><span style="font-size: 16px;">3.1 Overbought and oversold conditions</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusbdtXwGT3SyDfoQBK9AG29f"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusW9GGMFRExtIvbwnTYRVyRg"><span style="font-size: 16px;">A reading above 80 indicates that the market is overbought and may be due for a pullback. A reading below 20 indicates that the market is oversold and may rebound. However, during a strong trend, StochRSI can remain in an extreme zone for an extended period. Overbought does not mean that the price will immediately fall, and oversold does not mean that it will immediately rise.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusoh7vpu9oH73PSNZZ65ljje"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxusmCmEi3PCj4MBssyNPFE3Rh"><span style="font-size: 16px;">3.2 Buy and sell signals</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxuspIVwKnEztj24pfwPP8z4Xg"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusjfEEHdZSgRgeiQcgrKqjKg"><span style="font-size: 16px;"><strong>Buy signal:</strong> When StochRSI is below 20 in the oversold zone and the fast line crosses above the slow line, bearish momentum may be weakening.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusIY9RJypimbkb9dI5Xnjn1e"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxus2IAjXlBnOzSb6OMszTVx7d"><span style="font-size: 16px;"><strong>Sell signal:</strong> When StochRSI is above 80 in the overbought zone and the fast line crosses below the slow line, bullish momentum may be losing strength.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusY7wC8KdeYFNGR0QJ846KBd"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusxEmRZ5Ue5r44dzf12R9RRc"><span style="font-size: 16px;">The first crossover within an extreme zone is often the most reliable. Crossovers in the middle of the range generally require confirmation from other tools.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusztk5sEBRS5DMk6lcDvjLmf"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxusH2diXkJIUAOUHcK1RkAwBe"><span style="font-size: 16px;">3.3 Divergence signals</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusarQYqRXM7SuSWWG5plr3nb"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusujBankI4KfRXshvciehndh"><span style="font-size: 16px;">A bullish divergence occurs when the price makes a lower low while StochRSI forms a higher low, suggesting a possible upward reversal. A bearish divergence occurs when the price makes a higher high while StochRSI forms a lower high, suggesting that upward momentum may be weakening. Divergences on the daily chart generally carry more weight.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusMo5LwthQkv8AoL1N82NvSb"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-doxusgVVuV8vfsu8Zll5rUwEskg"><strong>4. How to use StochRSI for trading on MEXC</strong></h2><div style="text-align:left" class="ace-line ace-line old-record-id-doxusnbxeV2H3qR9lLb1PZ2G6td"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusuXGfQ6ZpZDs5CeT3AlXIUg"><span style="font-size: 16px;">You can add StochRSI to the <a data-lark-is-custom="true" href="https://www.mexc.com/futures/BTC_USDT">Futures</a> chart on MEXC. The following workflow is provided for educational purposes:</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusqYKCibLwqxD6SzK2nZN7Jd"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusTrExSTiHmy04f82MgBNBCc"><span style="font-size: 16px;"><strong>1) Identify the trend direction.</strong> Add a 50-period <a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-the-exponential-moving-average-indicator-in-trading-416907527621799936">Exponential Moving Average (EMA)</a> as a trend reference. When the price is above the EMA, the market environment is generally bullish. When the price is below the EMA, it is generally bearish.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusajo3IqSGwjmkefndoLnToe"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusy5dTXT7OrWO5P6MsoEXa2e"><span style="font-size: 16px;"><strong>2) Identify the signal pattern.</strong> In an uptrend, a bullish crossover—where the fast line crosses above the slow line after StochRSI enters the oversold zone—may indicate renewed momentum. In a downtrend, a bearish crossover in the overbought zone may indicate weakening momentum.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxuswkyYt4twjHcDOxz9gFOnSb"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusk5J3m9fNNJXKQL5EplP1Fd"><span style="font-size: 16px;"><strong>3) Confirm with multiple tools.</strong> No single indicator is reliable in every market condition. Combine StochRSI with support and resistance levels, trading volume, and candlestick patterns to build a more complete analysis.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusnGVZyd2A0CdX188Zf23eA1"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusYfm5T2soAViKPACc1bQOZc"><span style="font-size: 16px;">Beginners may want to start with small positions while learning how the indicator behaves in live market conditions. Over time, you can develop an analysis framework that suits your own trading approach.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusD3sUrI1IiD8F1dE8bNjXQc"><span style="font-size: 16px;"><br></span></div><div style="text-align:center" class="ace-line ace-line old-record-id-doxus77GAgsqBzYpNfUG0E2vRCe"><span style="font-size: 16px;">*BTN-<strong>Futures Trading</strong>&BTNURL=<u><a data-lark-is-custom="true" href="https://www.mexc.com/futures/BTC_USDT">https://www.mexc.com/futures/BTC_USDT</a></u>*</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusLmozfgDSzIYXAuYjRqK2YL"><span style="font-size: 16px;"><br></span></div><div data-type="image" data-ace-gallery-json="{"items":[{"uuid":"93233b27-53fc-4204-80c6-542c83d4af0d","height":549,"width":1174,"currHeight":549,"currWidth":1174,"natrualHeight":549,"natrualWidth":1174,"pluginName":"imageUpload","scale":1,"src":"https%3A%2F%2Finternal-api-drive-stream.larksuite.com%2Fspace%2Fapi%2Fbox%2Fstream%2Fdownload%2Fpreview%2FGTwhbyl23oDD4tx15tburG5dszf%2F%3Fpreview_type%3D16","file_token":"GTwhbyl23oDD4tx15tburG5dszf","image_type":"image/jpeg","size":1,"comments":[]}]}" class="image-uploaded gallery old-record-id-doxlgbW6No0NwNvtbPpDNjcctId"><img src="https://l7jipx1bfq.larksuite.com/space/api/box/stream/download/asynccode/?code=YjMzMTcxYzUxOTk0NGYxYTZhY2E3YTFmM2NmMTlkZWRfSjNjeHlRejFDdzI4RFl4aGpRNlNXZjZTcWYzdWRKWjZfVG9rZW46R1R3aGJ5bDIzb0RENHR4MTV0YnVyRzVkc3pmXzE3ODgyNjk5MzA6MTc4ODI3MzUzMF9WNA&add_watermark=true&scene_type=CCM" data-single-block="true" data-snapshot="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" data-suite="eyJmaWxlVG9rZW4iOiJHVHdoYnlsMjNvREQ0dHgxNXRidXJHNWRzemYiLCJvYmpUeXBlIjoiZG9jeCIsIm9ialRva2VuIjoiZG94bGdiVzZObzBOd052dGJQcEROamNjdElkIiwib3JpZ2luU3JjIjoiaHR0cHM6Ly9pbnRlcm5hbC1hcGktZHJpdmUtc3RyZWFtLmxhcmtzdWl0ZS5jb20vc3BhY2UvYXBpL2JveC9zdHJlYW0vZG93bmxvYWQvcHJldmlldy9HVHdoYnlsMjNvREQ0dHgxNXRidXJHNWRzemYvP3ByZXZpZXdfdHlwZT0xNiJ9" data-src="https://internal-api-drive-stream.larksuite.com/space/api/box/stream/download/all/GTwhbyl23oDD4tx15tburG5dszf/?mount_node_token=doxlgbW6No0NwNvtbPpDNjcctId&mount_point=docx_image" data-width="1174" data-height="549" data-lark-image-uri="drivetoken://GTwhbyl23oDD4tx15tburG5dszf" data-lark-image-width="1174" data-lark-image-height="549" style="max-width: 100%; height: auto; border-radius: 12px; font-size: 16px;"></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxussfZrtNTwC5m6pWZrJmfr3e"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-doxusutGdHZWexqVPKyveHgC3zb"><strong>5. StochRSI vs. RSI: What is the difference?</strong></h2><div style="text-align:left" class="ace-line ace-line old-record-id-doxusTMhlNJCt42FhGwmXPTZg1b"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusZktkvU0innnTdOKKYfKEMe"><span style="font-size: 16px;">The <a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-the-relative-strength-index-rsi-in-trading-425570029981283328">Relative Strength Index (RSI)</a> is calculated directly from price data. It is smoother and is commonly used to assess overall trend strength. StochRSI is calculated from RSI values, which makes it more sensitive and produces more frequent signals. This sensitivity can help traders identify short-term reversals, but it can also result in more false signals.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusQfarnbIJfSz7TQGcq3dqpd"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxustIxWBRsVBBs8FEUHvSaIOe"><span style="font-size: 16px;">The two indicators can be used together: RSI can help confirm the broader market direction, while StochRSI can help identify more precise short-term entry opportunities.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusbAXwrRjeUYs7PxTZ5qPfTb"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-doxus00daIsJpeSxfLefER4hqBh"><strong>6. Common StochRSI mistakes and limitations</strong></h2><div style="text-align:left" class="ace-line ace-line old-record-id-doxusz2fxgbNmzO59KeQewO85If"><span style="font-size: 16px;"><br></span></div><div><span style="font-size: 16px;"><span style="font-size: 16px;">1）Do not use Sto</span>chRSI in isolation. Confirm its signals with trendlines, <a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-the-moving-average-of-volume-in-trading-421863713722995712" style="">volume</a>, or moving averages.</span></div><div><span style="font-size: 16px;">2）Avoid trying to pick a bottom or top against a strong trend.</span></div><div><span style="font-size: 16px;">3）Frequent signals can lead to overtrading, so focus on higher-quality setups.</span></div><div><span style="font-size: 16px;">4）StochRSI reflect<span style="font-size: 16px;">s momentum changes that have already occurred. It cannot predict the future, and every signal can fail.</span></span></div><p><br></p><div style="text-align:left" class="ace-line ace-line old-record-id-doxuszXw4EwiQAnbJ4taGSYymGe"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-doxusjqHj3QvgC2NpBITzReqK4g"><strong>7. StochRSI FAQs</strong></h2><div style="text-align:left" class="ace-line ace-line old-record-id-doxus2DfAVLWeHDY1IvhGt7wubd"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxus3afFhpiVIqdqiWCR4i2bLb"><span style="font-size: 16px;">7.1 How do you use the StochRSI indicator?</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusIRhXHIbQXohM3kyKMGLKce"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxus9pCobTYWncRLFquUu9Bphd"><span style="font-size: 16px;">After adding StochRSI to a chart, focus on the 80 and 20 levels. In the oversold zone, a fast-line crossover above the slow line may serve as a buy reference. In the overbought zone, a fast-line crossover below the slow line may serve as a sell reference. Always consider the broader trend direction before acting.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusoMgh9RmNrcStvGRTk8r7be"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxus0qrX0QkN4ucL1Yf2mgBwZb"><span style="font-size: 16px;">7.2 What are the best StochRSI settings for a 5-minute chart?</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusiZi9uLxsH43rdtTczdP0kN"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxus2C82WtkQuJnbx2Jokq61Ve"><span style="font-size: 16px;">The standard 14, 3, 3 settings with overbought and oversold thresholds of 80 and 20 are a practical starting point. Prioritize highly liquid trading pairs to reduce noise.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusBSK3RgGe9NBYpMfdMngmih"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxusCq0yJyjxvkYzrTm0ulfqZf"><span style="font-size: 16px;">7.3 Which StochRSI settings work for a 15-minute chart?</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxuskcgjzzCXJ0Nv1XvXYAxGJb"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusYMG33u7bzosQA6nCtWw9Sb"><span style="font-size: 16px;">You can also begin with the default 14, 3, 3 settings. If signals appear too frequently, consider increasing the period to filter out some market noise.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusT3wxRrNr5wjXtXzzpdo2ag"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxusJtfDzIyC1Me5fyenJmwm3d"><span style="font-size: 16px;">7.4 What is a StochRSI buy signal?</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusXULP2JFZWGoie8ubhObJRd"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusSqPtsX3U2BMOrwgC1Zr09g"><span style="font-size: 16px;">A common buy signal occurs when StochRSI is below 20 and the fast line crosses above the slow line, especially when the signal aligns with an uptrend on a higher timeframe.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusyVXstzCueNC2Jc6oR9Xztf"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxuskTlbgyoUrqsLQzNqruOH9d"><span style="font-size: 16px;">7.5 Can RSI and StochRSI be used together?</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusR0PmNlpYYWZXG2yPfX0jkO"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusGlbwnVVpvAJb2U6ZR7vQEo"><span style="font-size: 16px;">Yes. RSI can help confirm trend strength and the broader market direction, while StochRSI can help identify more precise short-term entry opportunities. Used together, they can provide stronger signal confirmation.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxuscSErsnJyydsN94IYhoPZ77"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxusA7uMBLi6n977m6cOMPslPg"><span style="font-size: 16px;">7.6 How should StochRSI be set up for intraday trading?</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxuswLIwXPMi7dB5bZ78AUvicg"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusYWoON5G3g1ggUi7VWyRPBd"><span style="font-size: 16px;">For intraday trading, you can use the 14, 3, 3 settings and add a 50-period moving average as a trend filter. Consider only extreme-zone crossovers that align with the prevailing trend.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusIs1mQYhGnV3R6R3MfxBtZf"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxusfSZMSxfMAYMT1z97NycY0g"><span style="font-size: 16px;">7.7 What does it mean when StochRSI stays above 80 for a long time?</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusbrGbwcnSMr3v7RXN85JQQc"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusUrdj584PtpfAt28fVC6Pqh"><span style="font-size: 16px;">This often indicates a strong uptrend rather than an imminent reversal. Do not short the market solely because StochRSI is elevated. Wait for the fast line to cross below the slow line and look for a confirmed breakdown in price structure.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusWbUnMqjLyezDSUPmmpCoUb"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxusevzY8SlCRFNyslDZyX1jUc"><span style="font-size: 16px;">Recommended reading:</span></h3><ul start="1" class="list-bullet1"><li style="text-align:left" class="ace-line ace-line old-record-id-doxus31CDQ78Jhdvj0LyqDTcs1d" data-list="bullet"><div><a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-the-momentum-indicator-mtm-in-trading-451905738648294400" style="font-size: 16px;">How to Use the Momentum Indicator (MTM) in Trading</a></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxusfPA2XoP6PT73Ss4CRwe7oR" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-to-use-the-displaced-moving-average-dma-in-trading-447820795253059584" data-lark-is-custom="true" style="font-size: 16px;">How to Use the Displaced Moving Average (DMA) in Trading</a></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxusOmcMywq4EVr2gr9NZcBLCd" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-to-use-the-psychological-line-psy-indicator-in-trading-443492945687418880" data-lark-is-custom="true" style="font-size: 16px;">How to Use the Psychological Line (PSY) Indicator in Trading</a></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxus5ckufYve0AdDOHNf7XFjlg" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-to-use-volume-ratio-vr-indicator-in-trading-443362198292994048" data-lark-is-custom="true" style="font-size: 16px;">How to Use the Volume Ratio (VR) Indicator in Trading</a></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxus95O6T3Lpp6aXbHulIGLmVf" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-to-use-the-commodity-channel-index-cci-in-trading-436075700375966720" data-lark-is-custom="true" style="font-size: 16px;">How to Use the Commodity Channel Index (CCI) in Trading</a></div></li></ul><div style="text-align:left" class="ace-line ace-line old-record-id-doxusfr7lhVi2LXHNLQwLYPaVwg"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxus624Z8GI0ADqGmS0NhtAhlh"><span style="font-size: 16px;"><strong>Risk disclaimer:</strong> Technical indicators are calculated from historical data and are provided for reference only. They cannot guarantee future market performance. Digital asset markets are highly volatile and involve risk. Make decisions carefully based on your own risk tolerance, and do not trade solely by following others.</span></div></div>
How to Use the Momentum Indicator (MTM) in Trading: A Complete Beginner's Guide
<div data-page-id="YV7ed3rmJopsRfxRw6du5PXLsvb" data-lark-html-role="root" data-docx-has-block-data="true"><h2 class="heading-3 ace-line old-record-id-QM4ldMAH6ozF5KxVmYsuFdIms4c"><strong>Key Takeaways:</strong></h2><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-Y3iQdtsbzodE4mxYEoeu3jvjsbd" data-list="bullet"><div><span style="font-size: 16px;">The Momentum Indicator measures the speed and strength of price movements rather than the price level itself.</span></div></li><li class="ace-line ace-line old-record-id-CO9cdF4IXooqfUx54q0ugotNshd" data-list="bullet"><div><span style="font-size: 16px;">Zero line crossovers, divergence signals, and overbought and oversold conditions are the three primary ways to interpret momentum.</span></div></li><li class="ace-line ace-line old-record-id-Ti7MdqZ4IoyU50xitbOuFeNdsob" data-list="bullet"><div><span style="font-size: 16px;">Common momentum indicators include the Relative Strength Index, Moving Average Convergence Divergence, Rate of Change, and Stochastic Oscillator.</span></div></li><li class="ace-line ace-line old-record-id-HwYOdqyxxoQfEMxB0fMuq5NdsWb" data-list="bullet"><div><span style="font-size: 16px;">Users can easily add the Momentum Indicator to the candlestick chart on MEXC and customize its parameters to support their trading decisions.</span></div></li></ul><div class="ace-line ace-line old-record-id-WiMSdyHxloB0rtxg7qBualQusmb"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-Rd35dotIooP0jKxADrVu7V83sWf"><strong>1. What Is the Momentum Indicator?</strong></h2><div class="ace-line ace-line old-record-id-OTgSdQSYGocMpCxJIc7uyASoscf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-DauKdn7iDoyJxBxhpGcuE80Fs2e"><span style="font-size: 16px;">The Momentum Indicator, or MTM, is one of the most widely used tools in technical analysis. It measures how quickly an asset's price changes over a specific period.</span></div><div class="ace-line ace-line old-record-id-AApkdqYpGoTtwlxsDlBuZUsus7b"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-TrB7dM3ivonAhBx9pXMuinphsBv"><span style="font-size: 16px;">The principle behind momentum is similar to inertia in physics. Once a price trend is in motion, it often continues in the same direction until a significant market force causes it to slow down or reverse.</span></div><div class="ace-line ace-line old-record-id-LdFXdNUr7okcEixt34DuSDo7sWe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Al8ldEqjHorMkJx0Sbeu1jsSsTf"><span style="font-size: 16px;">Unlike analysis methods that focus primarily on price levels, the Momentum Indicator shows whether a price movement is accelerating or losing speed. Strong momentum may support the continuation of a trend, while weakening momentum may indicate that a pullback or reversal is approaching.</span></div><div class="ace-line ace-line old-record-id-WNYIdpgbnoYucExq8FUuRUz5sYg"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-AMBrdLZhxo0y9HxyyDkubi2HsAg"><span style="font-size: 16px;">The indicator can therefore help traders assess whether a trend remains strong enough to follow and identify when it may be approaching its final stage.</span></div><div class="ace-line ace-line old-record-id-YNXydumcioseDMxtoHpus7JdsZb"><span style="font-size: 16px;"><br></span></div><div style="text-align:center" data-type="image" data-ace-gallery-json="{"items":[{"uuid":"5f9f1609-1783-4e05-9bd4-6738fef16eed","height":1472,"width":2938,"currHeight":1472,"currWidth":2938,"natrualHeight":1472,"natrualWidth":2938,"pluginName":"imageUpload","scale":1,"src":"https%3A%2F%2Finternal-api-drive-stream.larksuite.com%2Fspace%2Fapi%2Fbox%2Fstream%2Fdownload%2Fpreview%2FWE57bW05No2ub5xuxCzu9CaUsZf%2F%3Fpreview_type%3D16","file_token":"WE57bW05No2ub5xuxCzu9CaUsZf","image_type":"image/png","size":302549,"comments":[]}]}" class="image-uploaded gallery old-record-id-YDfDdVhmGoQAZUxC9GOufVZ0sOg"><img src="https://mexc-rainbown-activityimages.s3.ap-northeast-1.amazonaws.com/banner/F202609012131529551O68FpeT1aXMvN.png" data-single-block="true" data-snapshot="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" data-suite="eyJmaWxlVG9rZW4iOiJXRTU3YlcwNU5vMnViNXh1eEN6dTlDYVVzWmYiLCJvYmpUeXBlIjoiZG9jeCIsIm9ialRva2VuIjoiWURmRGRWaG1Hb1FBWlV4QzlHT3VmVlowc09nIiwib3JpZ2luU3JjIjoiaHR0cHM6Ly9pbnRlcm5hbC1hcGktZHJpdmUtc3RyZWFtLmxhcmtzdWl0ZS5jb20vc3BhY2UvYXBpL2JveC9zdHJlYW0vZG93bmxvYWQvcHJldmlldy9XRTU3YlcwNU5vMnViNXh1eEN6dTlDYVVzWmYvP3ByZXZpZXdfdHlwZT0xNiJ9" data-src="https://internal-api-drive-stream.larksuite.com/space/api/box/stream/download/all/WE57bW05No2ub5xuxCzu9CaUsZf/?mount_node_token=YDfDdVhmGoQAZUxC9GOufVZ0sOg&mount_point=docx_image" data-width="2938" data-height="1472" data-lark-image-uri="drivetoken://WE57bW05No2ub5xuxCzu9CaUsZf" data-lark-image-width="2938" data-lark-image-height="1472" data-host-from-cloud="true" style="max-width: 100%; height: auto; border-radius: 12px; font-size: 16px;"></div><div class="ace-line ace-line old-record-id-HcZad0lzPorjxkxkNTpuU4iuseh"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-DgqTdDH5Rosv2DxEBdHuzBdhsaf"><strong>2. How to Use the Momentum Indicator: Three Core Methods</strong></h2><div class="ace-line ace-line old-record-id-LEa5dBYvlo2sDYxbUMtuORZysfd"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-NcLBdEHrSolHXGxWoatuwX1Osio"><span style="font-size: 16px;">2.1 Zero Line Crossover Signals</span></h3><div class="ace-line ace-line old-record-id-SFi5dMT34o7ZAax5Fllu5CvZs6e"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Rc8udJ7AFoGyCBxVSBxu0K0qslf"><span style="font-size: 16px;">When the momentum line crosses above the zero line, it indicates that upward momentum is increasing. In an established uptrend, traders may use this as a bullish reference signal.</span></div><div class="ace-line ace-line old-record-id-DKu0dDtd2ouWBmxXBZKuf3b5sLb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-NcGGdCm80oCT7lxe4iqu6MPNsud"><span style="font-size: 16px;">When the momentum line crosses below the zero line, it suggests that downward momentum is strengthening. In an established downtrend, traders may interpret this as a bearish reference signal.</span></div><div class="ace-line ace-line old-record-id-PVf7dZP3ooxKMSxMysmuar91sSd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-W433dKPd5oMRYIx6zHQuXC52sKb"><span style="font-size: 16px;">Crossover signals that align with the broader market trend are generally more reliable than signals that move against it.</span></div><div class="ace-line ace-line old-record-id-EsQLdRjd6ohsI7xeGBUuf2Wus4g"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-WsrWdlaxhoFldWxnosbukn9DsFw"><span style="font-size: 16px;">2.2 Divergence Signals</span></h3><div class="ace-line ace-line old-record-id-IvFVdPGUHod6qGxxWBMu9hGCshh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Hhdsdo8FtoLUITx3zw4uJja4sHg"><span style="font-size: 16px;">Divergence is one of the most valuable signals provided by the Momentum Indicator.</span></div><div class="ace-line ace-line old-record-id-Nv9odRuzxojHZUxsJpyuEgXVsQe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Hx3uddWsRorf5wxJOB2ugG3tsrh"><span style="font-size: 16px;"><strong>Bearish divergence:</strong> The price reaches a new high, but the Momentum Indicator fails to reach a corresponding new high. This suggests that upward momentum is weakening and that the price may pull back.</span></div><div class="ace-line ace-line old-record-id-Cvocde2PnoWLlWxn6rNuJUpAssc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-FF8BdWXqdoca93x2ksXu8wLpsSd"><span style="font-size: 16px;"><strong>Bullish divergence:</strong> The price reaches a new low while the Momentum Indicator begins to rise. This indicates that selling pressure may be weakening and that the price could rebound.</span></div><div class="ace-line ace-line old-record-id-Y7tVd5xgfokT8wx0FDiuuujNsyh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Cu1DdQF9gouWImxpfX9uMI6zs1d"><span style="font-size: 16px;">Divergence does not guarantee that a reversal will occur, but it can provide an early warning that the current trend is losing strength.</span></div><div class="ace-line ace-line old-record-id-NoYWdwRfNoL6UoxRmV4uZz6bsSb"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-TgS4d0uOco5GJRx4xHauUueqsmg"><span style="font-size: 16px;">2.3 Overbought and Oversold Conditions</span></h3><div class="ace-line ace-line old-record-id-Y7KYdRPpToeecPx7GpNuo60XsFd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-TJ1ydsFdxoxtjjxAnWLu5yoKsDg"><span style="font-size: 16px;">The standard Momentum Indicator does not have fixed upper or lower boundaries. Traders must therefore identify potential overbought and oversold levels by reviewing the historical behavior of each asset.</span></div><div class="ace-line ace-line old-record-id-VxiXdFF8eoR7ZwxJoV7uk4S8sWG"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-ETBZd7CqIo3lQHx2EEEuMy8osQh"><span style="font-size: 16px;">Bounded oscillators, such as the <a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-the-relative-strength-index-rsi-in-trading-425570029981283328">Relative Strength Index</a>, provide standardized reference ranges and may be easier for beginners to interpret.</span></div><div class="ace-line ace-line old-record-id-P0n2dWP71oDKWzxnxxvu5QBEsSQ"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-VkhYdMnNFoqJmTx30hauxye1sCg"><strong>3. Momentum Indicator Parameter Settings</strong></h2><div class="ace-line ace-line old-record-id-GyzXdV8LJoVVA7xrPnAuwtvNsDb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-W0eIdbgbHox3yExP1fbujmRMsUg"><span style="font-size: 16px;">The most commonly used default period for the Momentum Indicator is 12.</span></div><div class="ace-line ace-line old-record-id-N6b3dMMOdo8xx1xa3bJuIUmbsHd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-DtTwdZqB0osCgkxewmYuOIl4snf"><span style="font-size: 16px;">A shorter period makes the indicator more responsive to recent price movements, but it may also generate more market noise and false signals. A longer period produces a smoother indicator line but responds more slowly to changes in market conditions.</span></div><div class="ace-line ace-line old-record-id-KOmZdtssIoRQwyxgMshuQZ3hsbf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-TLxXdPX9foXGZJxGn7FuA7vds5e"><span style="font-size: 16px;">Short-term traders may consider using a shorter period to increase sensitivity. Medium-term and long-term traders may prefer a longer period to filter out short-term price fluctuations.</span></div><div class="ace-line ace-line old-record-id-Wheudbr0zowB7Ox0J8NuJI09spz"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Iyb5dlCSco1t9ExnHBZupL9SsKb"><span style="font-size: 16px;">On <a data-lark-is-custom="true" href="https://www.mexc.com/">MEXC</a>, users can adjust the Momentum Indicator parameters according to their trading style and compare signals across multiple timeframes.</span></div><div class="ace-line ace-line old-record-id-R5qOd4J65oyJCRxJdwsuE0Alsjf"><span style="font-size: 16px;"><br></span></div><div style="text-align:center" class="ace-line ace-line old-record-id-FfZvd96tdoZo9gxzaHGulh6WsFc"><span style="font-size: 16px;">*BTN-<strong>Spot Trading</strong>&BTNURL=<u><a data-lark-is-custom="true" href="https://www.mexc.com/exchange/BTC_USDT">https://www.mexc.com/exchange/BTC_USDT</a></u>*</span></div><div class="ace-line ace-line old-record-id-AaNndowXuoBBodxP4jIuXWQLsQf"><span style="font-size: 16px;"><br></span></div><div style="text-align:center" data-type="image" data-ace-gallery-json="{"items":[{"uuid":"ae2d6310-15ca-4943-8d60-e2b5b760c10d","height":1394,"width":2932,"currHeight":1394,"currWidth":2932,"natrualHeight":1394,"natrualWidth":2932,"pluginName":"imageUpload","scale":1,"src":"https%3A%2F%2Finternal-api-drive-stream.larksuite.com%2Fspace%2Fapi%2Fbox%2Fstream%2Fdownload%2Fpreview%2FLd2TbV6v7oeiRXxLicbuoT7Bsfe%2F%3Fpreview_type%3D16","file_token":"Ld2TbV6v7oeiRXxLicbuoT7Bsfe","image_type":"image/png","size":458954,"comments":[]}]}" class="image-uploaded gallery old-record-id-AnmddoIp3ovw9vxS3AIu3bpusmh"><img src="https://mexc-rainbown-activityimages.s3.ap-northeast-1.amazonaws.com/banner/F20260901213153141WFTPXc35dBbAcW.png" data-single-block="true" data-snapshot="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" data-suite="eyJmaWxlVG9rZW4iOiJMZDJUYlY2djdvZWlSWHhMaWNidW9UN0JzZmUiLCJvYmpUeXBlIjoiZG9jeCIsIm9ialRva2VuIjoiQW5tZGRvSXAzb3Z3OXZ4UzNBSXUzYnB1c21oIiwib3JpZ2luU3JjIjoiaHR0cHM6Ly9pbnRlcm5hbC1hcGktZHJpdmUtc3RyZWFtLmxhcmtzdWl0ZS5jb20vc3BhY2UvYXBpL2JveC9zdHJlYW0vZG93bmxvYWQvcHJldmlldy9MZDJUYlY2djdvZWlSWHhMaWNidW9UN0JzZmUvP3ByZXZpZXdfdHlwZT0xNiJ9" data-src="https://internal-api-drive-stream.larksuite.com/space/api/box/stream/download/all/Ld2TbV6v7oeiRXxLicbuoT7Bsfe/?mount_node_token=AnmddoIp3ovw9vxS3AIu3bpusmh&mount_point=docx_image" data-width="2932" data-height="1394" data-lark-image-uri="drivetoken://Ld2TbV6v7oeiRXxLicbuoT7Bsfe" data-lark-image-width="2932" data-lark-image-height="1394" data-host-from-cloud="true" style="max-width: 100%; height: auto; border-radius: 12px; font-size: 16px;"></div><div class="ace-line ace-line old-record-id-HCvkdETOfoV1FQxoKWdu6x6msSg"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-FAhzdzIGQoyCkSxggBeu07GPsKb"><strong>4. Considerations When Using the Momentum Indicator</strong></h2><div class="ace-line ace-line old-record-id-GPNvd9ySNo8J0TxiHjfuvYAIsnf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-FpwcdhKa6oZ0wFxRv5Yut0BOsXb"><span style="font-size: 16px;"><strong>1）</strong><strong>Avoid relying on a single indicator.</strong> The Momentum Indicator measures the speed of price movements but cannot independently identify the broader trend or important price levels. Traders should combine it with tools such as <a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-moving-average-indicators-in-trading-416905955663768576">moving averages</a> and support and resistance levels.</span></div><div class="ace-line ace-line old-record-id-FwHHdcb8Zo3uMrxelw4ue1QXsRd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-ThQpdFVQIoKCQHxkCsQuFsPts1n"><span style="font-size: 16px;"><strong>2）</strong><strong>Consider the market environment.</strong> The Momentum Indicator may produce frequent false signals in sideways or range-bound markets. Momentum signals also tend to be more reliable in rising markets than in declining markets.</span></div><div class="ace-line ace-line old-record-id-GLqCd9BVfomPUlxqoMQu2zLbsEc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-O35WdfTANoWyUsxT6UmuUm7ysPc"><span style="font-size: 16px;"><strong>3）</strong><strong>Apply appropriate risk management.</strong> Technical indicators are analytical tools, and every signal should be supported by appropriate position sizing and stop-loss rules. When trading on MEXC, users can take advantage of the platform's <a data-lark-is-custom="true" href="https://www.mexc.com/support/article/mexc-futures-take-profit-and-stop-loss-faq-350096811661177856">take-profit and stop-loss</a> features to manage risk.</span></div><div class="ace-line ace-line old-record-id-I7C7dVeA6ogpt6xnChOuBbJnsCb"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-QMlodUur5oK9gUxcFPQuEuQRsxc"><strong>5. Common Momentum Indicators</strong></h2><div class="ace-line ace-line old-record-id-T9jydvK0ToH2mqxGUdkunp0tsmg"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Zzv0doEAMoHsfKxk0cPuO07tsVb"><span style="font-size: 16px;">Momentum indicators are a broad category of technical analysis tools. In addition to the standard MTM indicator, the following indicators are also widely used:</span></div><div class="ace-line ace-line old-record-id-FF0pdLdMVoUOaCx932muoApnsAe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-A0KqdzOoaog9eVxSxtMuYlQ6sCd"><span style="font-size: 16px;"><strong>Relative Strength Index (RSI):</strong> RSI moves between 0 and 100 and measures the speed and magnitude of price changes. It is commonly used to identify overbought conditions above 70 and oversold conditions below 30.</span></div><div class="ace-line ace-line old-record-id-Gj5XdInk5oqiXcxBxyiujRfxsgc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-GIrUdGB4soxLeLxOPPDuYPmGsac"><span style="font-size: 16px;"><strong><a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-the-macd-indicator-in-trading-426304203100942336">Moving Average Convergence Divergence (MACD)</a></strong>: MACD uses the relationship between moving averages to reflect both trend direction and momentum. Crossovers between the MACD line and the signal line are commonly used as trading reference signals.</span></div><div class="ace-line ace-line old-record-id-GFIgdN75Wo99fMxPO9EuOGqpswd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-BoXYdi7VBofNjex0tDgux5tusQe"><span style="font-size: 16px;"><strong><a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-the-stochastic-oscillator-in-trading-427169948248728576">Stochastic Oscillator (KDJ)</a></strong>: This indicator measures the current closing price’s relative position within a selected price range. Traders commonly use it to assess potential short-term price movements.</span></div><div class="ace-line ace-line old-record-id-R1RRdvQkmoVE1nxUuHMuyGV7soc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-IPqOdd1OUoqALVxbsUruYt4Jsve"><span style="font-size: 16px;"><strong>Rate of Change (ROC):</strong> ROC moves above and below a zero line and measures the percentage change between the current price and the price from a previous period.</span></div><div class="ace-line ace-line old-record-id-ACrWdRxZQoD8MFxNio2uc5dpsvc"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-BA4RdzzjmoVF84xpnctuuUfzsPc"><strong>6. Momentum Indicator FAQ</strong></h2><div class="ace-line ace-line old-record-id-MN6ldoeseosTcwxaM9Yu7utUsDe"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-Xnn2dGt83ob60TxnI2quV5VXsty"><span style="font-size: 16px;">6.1 How should I set the Momentum Indicator parameters?</span></h3><div class="ace-line ace-line old-record-id-WnQedKMHzoOP5wxo5JsuEuAFsGe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-GU27dKdztoBXKyxeYJUufc10sVg"><span style="font-size: 16px;">The default period is usually 12. Short-term traders may use a shorter period for greater sensitivity, while medium-term and long-term traders may use a longer period to reduce market noise.</span></div><div class="ace-line ace-line old-record-id-TPVgdHUo5o3w5NxI1K5uY3wwsEh"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-BPAGd5Y2Eow1pnxhc1qu5lm4sBh"><span style="font-size: 16px;">6.2 Which momentum indicator is the most accurate?</span></h3><div class="ace-line ace-line old-record-id-FXIadUVBZoSvnSxumgYuso3nsWe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-YblcdObp3oijbbxYcWpu84fnsnd"><span style="font-size: 16px;">No momentum indicator is universally the most accurate. MACD is often considered a comprehensive tool for analyzing both trends and momentum, while RSI is particularly useful for identifying overbought and oversold conditions. Performance depends on the market environment and how the indicator is applied.</span></div><div class="ace-line ace-line old-record-id-WX1qdOT1soD02AxlK1uuEfj1sYg"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-WQubdifXJoVpgsxpoVCucKMgsfd"><span style="font-size: 16px;">6.3 What are the most common momentum indicators?</span></h3><div class="ace-line ace-line old-record-id-MpKZd7g0joCABbxyC7cufdvYsZe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-RFmPd4rlMoIfARx2JbYufc0xsyg"><span style="font-size: 16px;">Common momentum indicators include the standard Momentum Indicator, Relative Strength Index, Moving Average Convergence Divergence, Rate of Change, and Stochastic Oscillator.</span></div><div class="ace-line ace-line old-record-id-UFWQdE2Svoo9RFxm8EjuUktusOg"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-ImXTdgxkGorM7lxddmnuQDtQsbb"><span style="font-size: 16px;">6.4 Does momentum trading really work?</span></h3><div class="ace-line ace-line old-record-id-AyD2dmfdTobk4FxvJB0u16PzsTe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Tr8VdM2YzotPn0xJTOgubECZscc"><span style="font-size: 16px;">Momentum strategies have historically performed well in markets with clear trends. However, they may generate unreliable signals in sideways markets. Their effectiveness depends on appropriate signal filtering, market analysis, and risk management.</span></div><div class="ace-line ace-line old-record-id-SfMxdHayEoV7BXxSteauOL5Psx3"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-FoX4dyzi1oAApXxbiK5uReNgsef"><span style="font-size: 16px;">6.5 Is the Momentum Indicator useful?</span></h3><div class="ace-line ace-line old-record-id-LP6ddfpVxo7spmxcCmIulqFDsVd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-MPlNdLck0oGXKoxB7VDuGwPZsqh"><span style="font-size: 16px;">The Momentum Indicator is a practical tool for evaluating trend strength. However, it has limitations, including the absence of fixed boundaries and less reliable signals in range-bound markets. Traders should use it together with other analytical tools.</span></div><div class="ace-line ace-line old-record-id-ATpQdhkw1oIwJAxKbfkujXUzsBc"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-I4Hidd2cwog7QHxIEEOuKa14svb"><span style="font-size: 16px;">6.6 How do I use the Momentum Indicator on MEXC?</span></h3><div class="ace-line ace-line old-record-id-EdNLdKlysofUiixgNUFuiNLssNe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-ASf6dgYdloUHqRxhZjEubWx1sCh"><span style="font-size: 16px;">Open the candlestick chart on the MEXC <a data-lark-is-custom="true" href="https://www.mexc.com/zh-MY/exchange/BTC_USDT">Spot</a> or <a data-lark-is-custom="true" href="https://www.mexc.com/zh-MY/futures/BTC_USDT">Futures</a> trading page. Search for the Momentum Indicator in the indicators menu, add it to the chart, and customize its parameters according to your trading strategy.</span></div><div class="ace-line ace-line old-record-id-Y6lfdbsKwoeQCQxiB8FuXwJzswg"><span style="font-size: 16px;"><br></span></div><div style="text-align:center" data-type="image" data-ace-gallery-json="{"items":[{"uuid":"e38cd613-e1bf-4209-b868-2b4e0b3ff385","height":1404,"width":2934,"currHeight":1404,"currWidth":2934,"natrualHeight":1404,"natrualWidth":2934,"pluginName":"imageUpload","scale":1,"src":"https%3A%2F%2Finternal-api-drive-stream.larksuite.com%2Fspace%2Fapi%2Fbox%2Fstream%2Fdownload%2Fpreview%2FRP82bZaHuocBuJxK4Jcuh1pYs7e%2F%3Fpreview_type%3D16","file_token":"RP82bZaHuocBuJxK4Jcuh1pYs7e","image_type":"image/png","size":469234,"comments":[]}]}" class="image-uploaded gallery old-record-id-TLjudh9G2o3zVhxXOY3ula7fsGh"><img src="https://mexc-rainbown-activityimages.s3.ap-northeast-1.amazonaws.com/banner/F20260901213153143FoWBAcmKTjfQdh.png" data-single-block="true" data-snapshot="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" data-suite="eyJmaWxlVG9rZW4iOiJSUDgyYlphSHVvY0J1SnhLNEpjdWgxcFlzN2UiLCJvYmpUeXBlIjoiZG9jeCIsIm9ialRva2VuIjoiVExqdWRoOUcybzN6Vmh4WE9ZM3VsYTdmc0doIiwib3JpZ2luU3JjIjoiaHR0cHM6Ly9pbnRlcm5hbC1hcGktZHJpdmUtc3RyZWFtLmxhcmtzdWl0ZS5jb20vc3BhY2UvYXBpL2JveC9zdHJlYW0vZG93bmxvYWQvcHJldmlldy9SUDgyYlphSHVvY0J1SnhLNEpjdWgxcFlzN2UvP3ByZXZpZXdfdHlwZT0xNiJ9" data-src="https://internal-api-drive-stream.larksuite.com/space/api/box/stream/download/all/RP82bZaHuocBuJxK4Jcuh1pYs7e/?mount_node_token=TLjudh9G2o3zVhxXOY3ula7fsGh&mount_point=docx_image" data-width="2934" data-height="1404" data-lark-image-uri="drivetoken://RP82bZaHuocBuJxK4Jcuh1pYs7e" data-lark-image-width="2934" data-lark-image-height="1404" data-host-from-cloud="true" style="max-width: 100%; height: auto; border-radius: 12px; font-size: 16px;"></div><div class="ace-line ace-line old-record-id-XLgYdbuaWoHJdkxSmqWuSw8QsWb"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-ZlpndmItpoTaiRxEl8QuwSp3sZg"><span style="font-size: 16px;">Recommended Reading:</span></h3><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-UXzFdws4vosYgWxEmWMu1MRls8g" data-list="bullet"><div><a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-the-directional-movement-index-dmi-in-trading-437460810149061632" style="font-size: 16px;">How to Use the Directional Movement Index (DMI) in Trading: A Complete Beginner's Guide</a></div></li><li class="ace-line ace-line old-record-id-IkbgdZs1hoRxECx4N2Luh1KfsWh" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-to-use-on-balance-volume-in-trading-451161858902562816" data-lark-is-custom="true" style="font-size: 16px;">How to Use On-Balance Volume in Trading: A Complete Beginner's Guide</a></div></li><li class="ace-line ace-line old-record-id-ZOwfdc1CiorQRux1YcEuM8tSs1c" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-to-use-the-triple-exponential-average-trix-in-trading-451158981274473472" data-lark-is-custom="true" style="font-size: 16px;">How to Use the Triple Exponential Average (TRIX) in Trading: A Complete Beginner's Guide</a></div></li><li class="ace-line ace-line old-record-id-OB5DdK7s3oDaDZxW632ulxUMscf" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-to-use-the-displaced-moving-average-dma-in-trading-447820795253059584" data-lark-is-custom="true" style="font-size: 16px;">How to Use the Displaced Moving Average (DMA) in Trading: A Complete Beginner's Guide</a></div></li><li class="ace-line ace-line old-record-id-JjpiddVEio7A1excqwQuMJMvsje" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-to-use-the-commodity-channel-index-cci-in-trading-436075700375966720" data-lark-is-custom="true" style="font-size: 16px;">How to Use the Commodity Channel Index (CCI) in Trading: A Complete Beginner's Guide</a></div></li></ul><div class="ace-line ace-line old-record-id-Hie0ddwxto29s8x6TZ5uX8q4s5d"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-GStCdQnbDogbpoxLI48uN5q8suf"><span style="font-size: 16px;"><strong>Risk Disclaimer: </strong>Technical indicators are calculated using historical data and are provided for reference only. They cannot guarantee future market performance. Digital asset markets are highly volatile, and trading involves risk. Make decisions carefully based on your own risk tolerance and avoid following market trends blindly.</span></div><div class="ace-line ace-line old-record-id-Q0Ecd6mo8oHfECxMQn9uPFsUsHd"><span style="font-size: 16px;"><br></span></div></div>
How to Use On-Balance Volume in Trading: A Complete Beginner's Guide
<div data-page-id="YL2td6USIo41RbxApBRuuKOZsib" data-lark-html-role="root" data-docx-has-block-data="true"><h2 class="heading-2 ace-line old-record-id-PgxkdhEkAoU4itxosQcucA6BsCh"><strong>Key Takeaways:</strong></h2><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-PslKdNGNioaBgNxLTPqudg8Xs7g" data-list="bullet"><div><span style="font-size: 16px;">The On-Balance Volume indicator is a momentum-based technical indicator introduced by Joe Granville in 1963. It uses cumulative changes in trading volume to help anticipate price movements.</span></div></li><li class="ace-line ace-line old-record-id-ZWskdTS5No1UjAxPrRyul8rpsv9" data-list="bullet"><div><span style="font-size: 16px;">OBV is based on the principle that volume precedes price, allowing traders to identify potential trend changes before they appear in price action.</span></div></li><li class="ace-line ace-line old-record-id-UTxUd7sHFoU5y4xgatOueWAisae" data-list="bullet"><div><span style="font-size: 16px;">OBV can be interpreted in three main ways: trend confirmation, divergence signals, and breakout validation.</span></div></li><li class="ace-line ace-line old-record-id-JDJCdVrZIojX1sxh7NwudyU0std" data-list="bullet"><div><span style="font-size: 16px;">Three practical OBV strategies include divergence reversals, moving average confirmation, and accumulation detection during consolidation.</span></div></li><li class="ace-line ace-line old-record-id-PQpHdA0mxofQzJx6HPDucr3VsTh" data-list="bullet"><div><span style="font-size: 16px;">Users can add OBV to the candlestick chart on MEXC and combine it with other tools for more comprehensive analysis.</span></div></li></ul><div class="ace-line ace-line old-record-id-QQ71dOQ17o0GuDxlDQiuSD6ks8f"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-Tr8td7VuVoCcf1xtixUu0kRosbg"><strong>1. What Is On-Balance Volume?</strong></h2><div class="ace-line ace-line old-record-id-MLxtdk6CjoZCMBxhAPkuEJszsab"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-HLSGdkiJIow8zUxb9bWuXDxxs5d"><span style="font-size: 16px;">On-Balance Volume, or OBV, is an indicator used to measure buying and selling pressure in the market. It was introduced by financial analyst Joe Granville in his 1963 book, <em>Granville's New Key to Stock Market Profits</em>, and was one of the earliest technical tools designed to track positive and negative volume flow.</span></div><div class="ace-line ace-line old-record-id-HgQVd4fHnouFppxr5ZPuWNCCsUh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-W0h7dMfPAoyfcSxntabupUPSsy7"><span style="font-size: 16px;">The central principle behind OBV is that volume precedes price. Granville believed that trading volume is a major force driving financial markets and that changes in volume often appear before corresponding changes in price when large investors begin entering or exiting the market. By observing the direction of OBV, traders may identify potential trend changes earlier.</span></div><div class="ace-line ace-line old-record-id-MV9MdOJZ6oSw46xcIdXuDx9xsUf"><span style="font-size: 16px;"><br></span></div><div style="text-align:center" data-type="image" data-ace-gallery-json="{"items":[{"uuid":"1f178d00-f065-4476-9f20-f5d040ac5fdc","height":1476,"width":2938,"currHeight":1476,"currWidth":2938,"natrualHeight":1476,"natrualWidth":2938,"pluginName":"imageUpload","scale":1,"src":"https%3A%2F%2Finternal-api-drive-stream.larksuite.com%2Fspace%2Fapi%2Fbox%2Fstream%2Fdownload%2Fpreview%2FRaOQb3x4qoa2F5xtbebuu35fsid%2F%3Fpreview_type%3D16","file_token":"RaOQb3x4qoa2F5xtbebuu35fsid","image_type":"image/png","size":256873,"comments":[]}]}" class="image-uploaded gallery old-record-id-VDGhdlt3yo5vUYxUsjQun4nesag"><img src="https://mexc-rainbown-activityimages.s3.ap-northeast-1.amazonaws.com/banner/F20260831212836979fI7Jd0jwTRLvsR.png" data-single-block="true" data-snapshot="eyJ0eXBlIjoiaW1hZ2UiLCJwYXJlbnRfaWQiOiJZTDJ0ZDZVU0lvNDFSYnhBcEJSdXVLT1pzaWIiLCJjb21tZW50cyI6W10sInJldmlzaW9ucyI6W10sImxvY2tlZCI6ZmFsc2UsImhpZGRlbiI6ZmFsc2UsImF1dGhvciI6Ijc2MjgxMjg1OTY1NDQwMTU3OTgiLCJhbGlnbiI6ImNlbnRlciIsImltYWdlIjp7InRva2VuIjoiUmFPUWIzeDRxb2EyRjV4dGJlYnV1MzVmc2lkIiwibWltZVR5cGUiOiJpbWFnZS9wbmciLCJzaXplIjoyNTY4NzMsInNjYWxlIjoxLCJ3aWR0aCI6MjkzOCwiaGVpZ2h0IjoxNDc2LCJuYW1lIjoiaW1hZ2UucG5nIiwiY3JvcCI6WzAsMCwwLDBdLCJyb3RhdGlvbiI6MCwiY2FwdGlvbiI6eyJ0ZXh0Ijp7ImFwb29sIjp7Im5leHROdW0iOjAsIm51bVRvQXR0cmliIjpudWxsfSwiaW5pdGlhbEF0dHJpYnV0ZWRUZXh0cyI6eyJhdHRyaWJzIjpudWxsLCJ0ZXh0IjpudWxsfX19fSwiYXJlYV9jb21tZW50cyI6e319" data-suite="eyJmaWxlVG9rZW4iOiJSYU9RYjN4NHFvYTJGNXh0YmVidXUzNWZzaWQiLCJvYmpUeXBlIjoiZG9jeCIsIm9ialRva2VuIjoiVkRHaGRsdDN5bzV2VVl4VXNqUXVuNG5lc2FnIiwib3JpZ2luU3JjIjoiaHR0cHM6Ly9pbnRlcm5hbC1hcGktZHJpdmUtc3RyZWFtLmxhcmtzdWl0ZS5jb20vc3BhY2UvYXBpL2JveC9zdHJlYW0vZG93bmxvYWQvcHJldmlldy9SYU9RYjN4NHFvYTJGNXh0YmVidXUzNWZzaWQvP3ByZXZpZXdfdHlwZT0xNiJ9" data-src="https://internal-api-drive-stream.larksuite.com/space/api/box/stream/download/all/RaOQb3x4qoa2F5xtbebuu35fsid/?mount_node_token=VDGhdlt3yo5vUYxUsjQun4nesag&mount_point=docx_image" data-width="2938" data-height="1476" data-lark-image-uri="drivetoken://RaOQb3x4qoa2F5xtbebuu35fsid" data-lark-image-width="2938" data-lark-image-height="1476" data-host-from-cloud="true" style="max-width: 100%; height: auto; border-radius: 12px; font-size: 16px;"></div><div class="ace-line ace-line old-record-id-NFFQdeakcoU0o3xSSCku0HjssHe"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-RiQ2dk3dQoKBeqxrCR7u7Yw0sib"><strong>2. How to Interpret On-Balance Volume</strong></h2><div class="ace-line ace-line old-record-id-DbaDdu1Lmo2kcXxh4qmuhH5TsPg"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-R2ObdiJD0oN46WxbXn8udysEsBf"><span style="font-size: 16px;">2.1 Trend Confirmation</span></h3><div class="ace-line ace-line old-record-id-Z6wkdxID4oZuelxyngkuKzfcsLh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-F7tzdvvSeoXD27xiAF2uGLSOsHe"><span style="font-size: 16px;">The most basic use of OBV is to confirm the strength of an existing trend. When the price forms higher highs and OBV also rises, the uptrend is supported by genuine buying pressure and may be more likely to continue. Conversely, when both the price and OBV move lower, OBV confirms the strength of the downtrend.</span></div><div class="ace-line ace-line old-record-id-CWvHdQYy5oEd1lxvcR0uZKHJsBh"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-J6ucdfVxMoc9fDxLIVSuHlEUsIh"><span style="font-size: 16px;">2.2 Divergence Signals</span></h3><div class="ace-line ace-line old-record-id-EWYud39mAo8L3Yxtt1Curyaus9f"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-KSgmdIyfbo5nr9xEC29uCYBxsHg"><span style="font-size: 16px;">Divergence is one of the most important OBV signals. It occurs when the price and the indicator move in different directions:</span></div><div class="ace-line ace-line old-record-id-Isp0dST9nobjBlxCzETuJVcwsUg"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-PgiIdqNqJotvrJxqvAHuHFXZsed"><span style="font-size: 16px;"><strong>Bullish divergence:</strong> The price forms a lower low while OBV forms a higher low. This suggests that selling pressure is weakening even though the price continues to decline, potentially signaling an upward reversal.</span></div><div class="ace-line ace-line old-record-id-Q3eudxtu5oos6nxpKxiunTSasok"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-TzdndOExnomGRUxKKasu4AGpsmh"><span style="font-size: 16px;"><strong>Bearish divergence:</strong> The price forms a higher high while OBV forms a lower high. This indicates that buying pressure may be weakening and that the uptrend could lose momentum or reverse.</span></div><div class="ace-line ace-line old-record-id-KUE2dvj2JojSTsxBGFNuzYeQsle"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-TRKvdoWFjoIoiUxvJNEuYplGs9c"><span style="font-size: 16px;">2.3 Breakout Validation</span></h3><div class="ace-line ace-line old-record-id-KcIzdDBREolu5CxRF8curUlcsjh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-LpFPdtv2Lom2RjxQbfqu6NYxsIe"><span style="font-size: 16px;">When the price breaks through a key support or resistance level, traders can use OBV to assess the strength of the breakout. If OBV simultaneously breaks above a previous high or below a previous low, the price breakout may be more credible. If OBV fails to confirm the move, the breakout may lack conviction, and traders should proceed cautiously.</span></div><div class="ace-line ace-line old-record-id-Ook6d9Qzao5XxixINiIuA3sHsJb"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-V1jadzhGqoso4Wx7e0ZumWevsLf"><strong>3. On-Balance Volume Trading Strategies</strong></h2><div class="ace-line ace-line old-record-id-Hg9md6tiDofiL3x1gMYuNnRyssd"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-L7emd9Quho9TMvxqgGtu7nV2seg"><span style="font-size: 16px;">3.1 Classic Divergence Reversal Strategy</span></h3><div class="ace-line ace-line old-record-id-UY4GdJAS1oLlHfx6rdEudHSrsKg"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-YWvKdMex4o2c33xgYF1usECFsUc"><span style="font-size: 16px;">Mark significant price highs and lows together with the corresponding swing points on OBV. When a clear divergence appears, wait for confirmation from the price structure before entering a trade. Confirmation may include a break above a recent swing high or below a recent swing low. A stop-loss order can be placed beyond the nearest local high or low.</span></div><div class="ace-line ace-line old-record-id-Gj53dH2YioQproxl8Mjuw4plsub"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-PgU1d68q7oFg2Kx3ZXDu0lOlssh"><span style="font-size: 16px;">3.2 Combining OBV With a Moving Average</span></h3><div class="ace-line ace-line old-record-id-SWkEd4MyaoKg3GxVoVruwbc6spb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-FRKLdcXVdoW8pTxh0kxuv4U1shb"><span style="font-size: 16px;">Combining OBV with a <a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-moving-average-indicators-in-trading-416905955663768576">moving average</a> can help filter out false signals. When OBV is above its moving average and both are trending upward, traders may prioritize long setups. When OBV is below its moving average and both are trending downward, traders may prioritize short setups. This combination can improve signal quality.</span></div><div class="ace-line ace-line old-record-id-ZgzKdjdLuoEUDCxponHuxfWFsDh"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-RJiFdW61WoYotKx8WFourubdsec"><span style="font-size: 16px;">3.3 Identifying Accumulation During Consolidation</span></h3><div class="ace-line ace-line old-record-id-NtqVdF3d2oxrBaxwxi1usqqHsde"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-NaZUd3ePyo69YoxRlkGu0KxYs6b"><span style="font-size: 16px;">When the price remains within a narrow consolidation range while OBV continues to rise, it may indicate that large investors are accumulating positions. Traders may consider entering after the price makes a confirmed breakout above the upper boundary of the range.</span></div><div class="ace-line ace-line old-record-id-BZtPd2WojoyLPExPJTsuy11VsQG"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-OgMGd1PaEoXHe8xI4gJuqFRQseg"><span style="font-size: 16px;">Before applying these strategies with real funds on <a data-lark-is-custom="true" href="https://www.mexc.com/">MEXC</a>, beginners should test them with small positions and use multiple <a data-lark-is-custom="true" href="https://www.mexc.com/support/futures-trading/technical-indicators">technical indicators</a> for confirmation.</span></div><div class="ace-line ace-line old-record-id-Nh5adqG4NoSLF4xWh1buVSUYsgg"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-YpuFdXFamolabYxjHr6ukCwDskb"><strong>4. Advantages and Limitations of On-Balance Volume</strong></h2><div class="ace-line ace-line old-record-id-ROvzdj6LQoJbHPxR8fuua4ews7e"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-UNKOdGda7oLpLWxWzEuusagAspH"><span style="font-size: 16px;"><strong>Advantages:</strong> OBV is simple to calculate and interpret. It provides several types of signals, including trend confirmation, divergence, and breakout validation. It also has relatively little lag, may occasionally act as a leading indicator, and does not repaint historical signals.</span></div><div class="ace-line ace-line old-record-id-OHXhdNxUtoUl1FxPwXjuU1jhsKb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-SedFduSXvoMAjkx8aWku1FYisQh"><span style="font-size: 16px;"><strong>Limitations:</strong> Sudden volume spikes caused by breaking news may distort the indicator and generate false signals. Price noise on shorter timeframes may reduce signal reliability. OBV does not account for the magnitude of price changes and may be less effective in sideways or range-bound markets.</span></div><div class="ace-line ace-line old-record-id-Rtlvd72WsoRxN2xzRSHuQqc9sjd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-OrtYdHrjIoXovUxpQwCu9BMdsse"><span style="font-size: 16px;">Professional traders commonly recommend using OBV on timeframes of 15 minutes or longer and combining it with other tools, such as the <a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-the-relative-strength-index-rsi-in-trading-425570029981283328">Relative Strength Index</a> and moving averages. Traders should not rely on OBV alone when making trading decisions.</span></div><div class="ace-line ace-line old-record-id-FQSFd2uUwo1u1ZxJ7ibubrT5sKd"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-Efy4debuaojtUYx69Ctu7GoLsUe"><strong>5. How to Use On-Balance Volume on MEXC</strong></h2><div class="ace-line ace-line old-record-id-TQCDdd2zvoS2uvxliDRuUt4usKd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-YWkyd3kgSoeahixXspFuWbt3sKe"><span style="font-size: 16px;">1）Add OBV to the candlestick chart on <a data-lark-is-custom="true" href="https://www.mexc.com/">MEXC</a> and begin with major digital assets that have relatively high liquidity.</span></div><div class="ace-line ace-line old-record-id-IrDZddrj9oUAJOxaI5Nu24YIsIc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-IycedHwuDoXGOYxjob9ujgs3sTh"><span style="font-size: 16px;">2）Start with longer timeframes, such as the four-hour or daily chart, and learn to identify trend confirmation and divergence signals.</span></div><div class="ace-line ace-line old-record-id-Xy1gdjl7xo5wp7xeEAZu0rkZsqd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-NttsdylCRoFTF0xszIsulH2ksCf"><span style="font-size: 16px;">3）Establish clear entry, stop-loss, and take-profit rules instead of trading based on intuition.</span></div><div class="ace-line ace-line old-record-id-Eys5dimAxoTI0CxbuKxuFTe1sAh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-AipmdpHHMoJ1Frx29KGuVwJcsvb"><span style="font-size: 16px;">4）Apply appropriate risk management and confirm every OBV signal with other technical tools.</span></div><div class="ace-line ace-line old-record-id-ZNHddCCL5oh4Gnxd3ujuUWlDsRf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-B8qFd9lfconGNgxKssxuYBJssGg"><span style="font-size: 16px;">Go to MEXC Website → <strong>Spot</strong>/<strong><a data-lark-is-custom="true" href="https://www.mexc.com/futures/BTC_USDT">Futures</a></strong> → <strong>Indicators</strong> → <strong>OBV</strong></span></div><div class="ace-line ace-line old-record-id-ITqcdUPSAoXcNmxmKDouteRcshE"><span style="font-size: 16px;"><br></span></div><div style="text-align:center" data-type="image" data-ace-gallery-json="{"items":[{"uuid":"5b8d3041-b32c-4644-956e-905c26bf26b4","height":1398,"width":2934,"currHeight":1398,"currWidth":2934,"natrualHeight":1398,"natrualWidth":2934,"pluginName":"imageUpload","scale":1,"src":"https%3A%2F%2Finternal-api-drive-stream.larksuite.com%2Fspace%2Fapi%2Fbox%2Fstream%2Fdownload%2Fpreview%2FMBcxb4T3joLn6Bxp7IRuy5s8spb%2F%3Fpreview_type%3D16","file_token":"MBcxb4T3joLn6Bxp7IRuy5s8spb","image_type":"image/png","size":459855,"comments":[]}]}" class="image-uploaded gallery old-record-id-NOgqdze7boubajxug7zughdLs7n"><img src="https://mexc-rainbown-activityimages.s3.ap-northeast-1.amazonaws.com/banner/F20260831212836992GxqXxjUYR6pNHv.png" data-single-block="true" data-snapshot="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" data-suite="eyJmaWxlVG9rZW4iOiJNQmN4YjRUM2pvTG42QnhwN0lSdXk1czhzcGIiLCJvYmpUeXBlIjoiZG9jeCIsIm9ialRva2VuIjoiTk9ncWR6ZTdib3ViYWp4dWc3enVnaGRMczduIiwib3JpZ2luU3JjIjoiaHR0cHM6Ly9pbnRlcm5hbC1hcGktZHJpdmUtc3RyZWFtLmxhcmtzdWl0ZS5jb20vc3BhY2UvYXBpL2JveC9zdHJlYW0vZG93bmxvYWQvcHJldmlldy9NQmN4YjRUM2pvTG42QnhwN0lSdXk1czhzcGIvP3ByZXZpZXdfdHlwZT0xNiJ9" data-src="https://internal-api-drive-stream.larksuite.com/space/api/box/stream/download/all/MBcxb4T3joLn6Bxp7IRuy5s8spb/?mount_node_token=NOgqdze7boubajxug7zughdLs7n&mount_point=docx_image" data-width="2934" data-height="1398" data-lark-image-uri="drivetoken://MBcxb4T3joLn6Bxp7IRuy5s8spb" data-lark-image-width="2934" data-lark-image-height="1398" data-host-from-cloud="true" style="max-width: 100%; height: auto; border-radius: 12px; font-size: 16px;"></div><div class="ace-line ace-line old-record-id-X0kOdKJ4noOPv9xhUU4uYBuUsXd"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-SxuUdCRR9ox7kJxQXgvupeuusOi"><strong>6. On-Balance Volume FAQ</strong></h2><div class="ace-line ace-line old-record-id-AGJQdYfGxop0XKxHr0Uu3mtKsJf"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-DZkzdTJB3oVZzexy3vlu3xpysde"><strong style="font-size: 16px;">6.1 What is the on-balance volume indicator?</strong></h3><div class="ace-line ace-line old-record-id-ASh9dPQLToD8Vsx6kqnuQzNpsjb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-MQ3hduR8gofYcQxVQEFuMch8s2d"><span style="font-size: 16px;">OBV measures buying and selling pressure by adding trading volume when the price rises and subtracting it when the price falls. Traders use its direction to help anticipate potential price movements.</span></div><div class="ace-line ace-line old-record-id-E1ERdAwcso3mNJxWfGYuQ6VwsHb"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-MSAPdkF6po2Dhnx5hFauNJLpsrh"><strong style="font-size: 16px;">6.2 How do you use OBV in trading?</strong></h3><div class="ace-line ace-line old-record-id-JKGad8aocor6ALxwR4yuos4nsng"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-R6DmdHaFhoxoXwxKnd3uN0Hoscd"><span style="font-size: 16px;">OBV has three primary uses: comparing its direction with the price to confirm a trend, identifying divergence between the price and OBV to anticipate possible reversals, and using OBV to validate breakouts of key price levels.</span></div><div class="ace-line ace-line old-record-id-KIG8dZj92ouTPKx7YjAuLPRjsxe"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-OuyDd15YEo8qYVxyvNYuMPDDsCg"><strong style="font-size: 16px;">6.3 What is the difference between OBV and trading volume?</strong></h3><div class="ace-line ace-line old-record-id-OtdVdbFwuovlcuxfW3pur6dosoc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-VwGldSyQYo5WoOxGnUAu2144srf"><span style="font-size: 16px;">Standard <a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-the-moving-average-of-volume-in-trading-421863713722995712">trading volume</a> shows the level of trading activity during each period. OBV accumulates volume based on whether the price rises or falls, helping traders assess the broader direction of buying and selling pressure.</span></div><div class="ace-line ace-line old-record-id-KqI3dzNL7oPzZdxjZ28uEv8IsJe"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-T5A1dgmeCoJo2CxAGe6unOeksxg"><strong style="font-size: 16px;">6.4 Is OBV suitable for day trading?</strong></h3><div class="ace-line ace-line old-record-id-N63ndRkONoFR0vx8BujuOa4zscg"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Y3fad4gbeo2mQ3xQX8yuvOZLsOf"><span style="font-size: 16px;">OBV can be used for day trading. However, shorter timeframes contain more market noise and may produce more false signals. Day traders may consider using timeframes of 15 minutes or longer and combining OBV with other indicators to filter signals.</span></div><div class="ace-line ace-line old-record-id-EWEEdhIbIoPBQsxE7vsuUX42swA"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-Xw39d2bbKovD50xnqICuOonmsvc"><strong style="font-size: 16px;">6.5 What is OBV divergence?</strong></h3><div class="ace-line ace-line old-record-id-Jk10dhvdyoQuVcx9BUUu468Ns6c"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-JFYYdz4Y2oT6ygx3DD6unh2vsig"><span style="font-size: 16px;">OBV divergence occurs when the price and the indicator move in different directions. A lower low in price accompanied by a higher low in OBV is bullish divergence and may signal a rebound. A higher high in price accompanied by a lower high in OBV is bearish divergence and may signal a pullback.</span></div><div class="ace-line ace-line old-record-id-OgTUdBSGhoKZsVxTjHauxLuOsfh"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-A0hrdBcUyobPhBxakiouv0mFsUd"><strong style="font-size: 16px;">6.6 Can OBV be used as a standalone trading signal?</strong></h3><div class="ace-line ace-line old-record-id-Jls9dILd8ooBvMxdzKuub0Q5sef"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-FGTLds4lzoCDEjxEj4XuPRawsbc"><span style="font-size: 16px;">It is not recommended. OBV signals should be confirmed with other technical analysis tools. Traders can combine OBV with price structure, moving averages, and other indicators to improve the reliability of their decisions.</span></div><div class="ace-line ace-line old-record-id-D1y9dPGXqodbB7x2qmwuDuqSs0b"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-N4dDdFosPoO3KHxgnQIuizs4sZJ"><span style="font-size: 16px;">Recommended Reading:</span></h3><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-Ct1rduI1uo5Rx8xsAIKup07ps5u" data-list="bullet"><div><a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-the-displaced-moving-average-dma-in-trading-447820795253059584" style="font-size: 16px;">How to Use the Displaced Moving Average (DMA) in Trading: A Complete Beginner's Guide</a></div></li><li class="ace-line ace-line old-record-id-VoCFd1RKboYR6zxLccOuUBUOsle" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-to-use-the-triple-exponential-average-trix-in-trading-451158981274473472" data-lark-is-custom="true" style="font-size: 16px;">How to Use the Triple Exponential Average in Trading: A Complete Beginner's Guide</a></div></li><li class="ace-line ace-line old-record-id-Niuwdpn37ovghwxuX6ZuICdwsEb" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-to-use-the-commodity-channel-index-cci-in-trading-436075700375966720" data-lark-is-custom="true" style="font-size: 16px;">How to Use the Commodity Channel Index (CCI) in Trading: A Complete Beginner's Guide</a></div></li><li class="ace-line ace-line old-record-id-GQSgdnjOaobaz5xfFCfuaf2RsLb" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-to-use-the-bias-ratio-bias-in-trading-432486920192694272" data-lark-is-custom="true" style="font-size: 16px;">How to Use the Bias Ratio (BIAS) in Trading: A Complete Beginner's Guide</a></div></li><li class="ace-line ace-line old-record-id-CblCdi0aDo4foyxjiTtudvymsAf" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-to-use-the-psychological-line-psy-indicator-in-trading-443492945687418880" data-lark-is-custom="true" style="font-size: 16px;">How to Use the Psychological Line (PSY) Indicator in Trading: A Complete Beginner's Guide</a></div></li></ul><div class="ace-line ace-line old-record-id-H0IzdIMipoVdw5xe5jduxwLEs1u"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-U3T8d5UDFoRZyPxIuEluvQJZs47"><span style="font-size: 16px;"><strong>Risk Disclaimer: </strong>Technical indicators are calculated using historical data and are provided for reference only. They cannot guarantee future market performance. Digital asset markets are highly volatile, and trading involves risk. Make decisions carefully based on your own risk tolerance and avoid following market trends blindly.</span></div><div class="ace-line ace-line old-record-id-QOUXdjpApoPva8xkvcZuv4Mjskc"><span style="font-size: 16px;"><br></span></div></div>
How to Use the Triple Exponential Average (TRIX) in Trading: A Complete Beginner's Guide
<div data-page-id="ZD8ndukvVowBiRxYb7BubewhsZh" data-lark-html-role="root" data-docx-has-block-data="true"><h2 class="heading-2 ace-line old-record-id-doxusC8w4qjdXotuz1D8wxAXRCc"><strong>Content Overview</strong></h2><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-doxus0utFFYXg1pN2DzdBDxpmNb" data-list="bullet"><div><span style="font-size: 16px;">The Triple Exponential Average (TRIX) uses triple exponential smoothing to filter out market noise and help identify trend direction.</span></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxusH9UBiwU4xBBPanCFiCFdLh" data-list="bullet"><div><span style="font-size: 16px;">TRIX oscillates around the zero line. Positive values indicate bullish momentum, while negative values indicate bearish momentum.</span></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxusCnL8PC8AvfLhfvAs7pU3Uh" data-list="bullet"><div><span style="font-size: 16px;">Common TRIX trading signals include zero-line crossovers, signal-line crossovers, and divergence.</span></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxusEbEVm97BGulH3jBq4tOktd" data-list="bullet"><div><span style="font-size: 16px;">The indicator period can be adjusted to suit different trading styles, with shorter periods suited to short-term trading and longer periods suited to swing trading.</span></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxuspYUKhI2WoJrGU5Ug9xOH9g" data-list="bullet"><div><span style="font-size: 16px;">Users can add TRIX to the charting tools on MEXC and combine it with other analytical tools to support trading decisions.</span></div></li></ul><div style="text-align:left" class="ace-line ace-line old-record-id-doxusFuJ5lUs9XNiiVBudHEnIEh"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-doxusw5SNbbdXVk6MgZswBmgyTb"><strong>1. What Is the Triple Exponential Average?</strong></h2><div style="text-align:left" class="ace-line ace-line old-record-id-doxusPMNqWIEa4wsLaud7lGe4eb"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusW53PW9N0OqbC05RgyZwRah"><span style="font-size: 16px;">The Triple Exponential Average (TRIX), developed by Jack Hutson in the 1980s, is a widely used technical analysis indicator. It calculates the percentage rate of change of a triple-smoothed exponential moving average, filtering out short-term price fluctuations and insignificant noise to show the market's primary trend more clearly.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusOxaxfUYxV0oUWLeuEiRqPd"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusbeEx2RE9TPIjmiAq8g52qS"><span style="font-size: 16px;">The indicator is based on three rounds of smoothing. First, an Exponential Moving Average is calculated using closing prices. The result is then smoothed a second and third time. This multilayered smoothing significantly reduces the impact of minor fluctuations, allowing traders to focus on more meaningful trend changes. Similar to the <a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-the-macd-indicator-in-trading-426304203100942336">Moving Average Convergence Divergence</a>, TRIX can help assess overbought and oversold conditions and generate potential buy and sell signals.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusA8D8OEP46IaFZH6Iv12Ile"><span style="font-size: 16px;"><br></span></div><div data-type="image" data-ace-gallery-json="{"items":[{"uuid":"e1844bbd-4735-410f-ac24-c10380b2cf51","height":1478,"width":2938,"currHeight":1478,"currWidth":2938,"natrualHeight":1478,"natrualWidth":2938,"pluginName":"imageUpload","scale":1,"src":"https%3A%2F%2Finternal-api-drive-stream.larksuite.com%2Fspace%2Fapi%2Fbox%2Fstream%2Fdownload%2Fpreview%2FBqR6br6jyobxImxAzp6uwIUCsUf%2F%3Fpreview_type%3D16","file_token":"BqR6br6jyobxImxAzp6uwIUCsUf","image_type":"image/jpeg","size":1,"comments":[]}]}" class="image-uploaded gallery old-record-id-doxlgt6lo7h9IsMYh04N50F7jbd"><img src="https://mexc-rainbown-activityimages.s3.ap-northeast-1.amazonaws.com/banner/F20260831212305258VoLma6cyhRAJeB.png" data-single-block="true" data-snapshot="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" data-suite="eyJmaWxlVG9rZW4iOiJCcVI2YnI2anlvYnhJbXhBenA2dXdJVUNzVWYiLCJvYmpUeXBlIjoiZG9jeCIsIm9ialRva2VuIjoiZG94bGd0NmxvN2g5SXNNWWgwNE41MEY3amJkIiwib3JpZ2luU3JjIjoiaHR0cHM6Ly9pbnRlcm5hbC1hcGktZHJpdmUtc3RyZWFtLmxhcmtzdWl0ZS5jb20vc3BhY2UvYXBpL2JveC9zdHJlYW0vZG93bmxvYWQvcHJldmlldy9CcVI2YnI2anlvYnhJbXhBenA2dXdJVUNzVWYvP3ByZXZpZXdfdHlwZT0xNiJ9" data-src="https://internal-api-drive-stream.larksuite.com/space/api/box/stream/download/all/BqR6br6jyobxImxAzp6uwIUCsUf/?mount_node_token=doxlgt6lo7h9IsMYh04N50F7jbd&mount_point=docx_image" data-width="2938" data-height="1478" data-lark-image-uri="drivetoken://BqR6br6jyobxImxAzp6uwIUCsUf" data-lark-image-width="2938" data-lark-image-height="1478" data-host-from-cloud="true" style="max-width: 100%; height: auto; border-radius: 12px; font-size: 16px;"></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxuslHWtMidvDFn4XzfUpSFN5e"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-doxusdnjE1hVaVTydq3DHOVEpzc"><strong>2. How to Use the Triple Exponential Average in Trading</strong></h2><div style="text-align:left" class="ace-line ace-line old-record-id-doxusvEM9mT61J6OuQMN3eoy2rh"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxusML4AZVBVzh2n1gzYRJAnYe"><span style="font-size: 16px;">2.1 Zero-line crossover signals</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusLTh6vlsjF19GCYMay39hBe"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxus0vWJSpFvDHeOMNOKVNjUqg"><span style="font-size: 16px;">When the TRIX line crosses above the zero line, momentum shifts from negative to positive, which may indicate the beginning of an uptrend. Traders may consider looking for potential buying opportunities. When the TRIX line crosses below the zero line, momentum is weakening, and traders may consider reducing their positions or looking for potential selling opportunities.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusSZDLZj34glGcu4B05qBsGf"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxusZzWXNZRix8dfKHt4frNCec"><span style="font-size: 16px;">2.2 Signal-line crossover signals</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusjvxTzr0dArSZoU8w0RdXyf"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxussSX6DYdaGLvEtpRA8Z6fhh"><span style="font-size: 16px;">Traders often overlay a signal line on TRIX, typically a 9-period Exponential Moving Average of the indicator itself. A crossover above the signal line is generally considered bullish, while a crossover below it is considered bearish.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxustfxBnNXOlWekFq1oVSTApf"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusnIDvliGbwwRdg0SaKvDxkg"><span style="font-size: 16px;">This method can be used in both trending and range-bound markets. In a range-bound market, it may help confirm support and resistance areas. In a trending market, it may help confirm that a pullback has ended and the primary trend is resuming.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusNihGShVE0sFfzYQzfQBVCc"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxus4sAJ7pLM9OMJx1LpnzxFzg"><span style="font-size: 16px;">2.3 Divergence signals</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusFH7Y16zIRiy6pCKHhC9tph"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusT4w6xStJ8Or1TGk4ni6eXd"><span style="font-size: 16px;">Divergence is an important tool for identifying potential trend reversals. When price forms a lower low while TRIX forms a higher low, a bullish divergence occurs, suggesting that bearish momentum may be fading and price could reverse upward. When price forms a higher high while TRIX forms a lower high, a bearish divergence occurs, suggesting that the uptrend may be weakening.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusisxPrYOKTpWAkyFbjxy0Ig"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-doxusgOCxypgB270QhaEmK9uSce"><strong>3. Advantages and Limitations of the TRIX Indicator</strong></h2><div style="text-align:left" class="ace-line ace-line old-record-id-doxusTi92DRHSfJ6CejqR6Ywmzc"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusQJ5dNphe8YFeDOgnrCCBHb"><strong style="font-size: 16px;">Advantages:</strong></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusc16aTf6m6FmPL5IXx3geWh"><span style="font-size: 16px;"><br></span></div><ul start="1" class="list-bullet1"><li style="text-align:left" class="ace-line ace-line old-record-id-doxusmG42U5ajJiGCd4DTKBOGxe" data-list="bullet"><div><span style="font-size: 16px;">Triple smoothing effectively filters out noise and produces clearer signals.</span></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxusJhJlNJH9KWoONAeHg04Mje" data-list="bullet"><div><span style="font-size: 16px;">Divergence can help provide early warning of potential trend reversals.</span></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxusOnsBnEubKS33QvNqBwCmFd" data-list="bullet"><div><span style="font-size: 16px;">Flexible parameters can be adapted to different time frames and trading styles.</span></div></li></ul><div style="text-align:left" class="ace-line ace-line old-record-id-doxusnLuMy3LP4biqLpAksVy9bd"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusopSIqpYM3QiXLEv3S3Itzb"><strong style="font-size: 16px;">Limitations:</strong></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxus6AWxL0WKj5WRGDQxqatSpd"><span style="font-size: 16px;"><br></span></div><ul start="1" class="list-bullet1"><li style="text-align:left" class="ace-line ace-line old-record-id-doxus1ZG2Vwn8fQgDKOL0amd8id" data-list="bullet"><div><span style="font-size: 16px;">As a lagging indicator based on moving averages, TRIX may produce delayed signals during rapid market reversals.</span></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxuseRCujt3HsvBHHbunKvuK0c" data-list="bullet"><div><span style="font-size: 16px;">It can generate false signals in range-bound markets.</span></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxusEHEJ2to2orohfxpYSivryh" data-list="bullet"><div><span style="font-size: 16px;">Parameter selection involves a degree of subjectivity.</span></div></li></ul><div style="text-align:left" class="ace-line ace-line old-record-id-doxushxztaNqyPkgUJByQFv4Ydg"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusAy5Ktp5dnyCqeM6Fa2zvHg"><span style="font-size: 16px;">It is recommended to combine TRIX with other analytical methods, such as the <a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-the-relative-strength-index-rsi-in-trading-425570029981283328">Relative Strength Index</a>, <a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-the-moving-average-of-volume-in-trading-421863713722995712">volume indicators</a>, and support and resistance levels. Traders should also set strict stop-loss orders and manage position risk carefully.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxust8SZJz5LsX8oVDYXT9y8Lb"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-doxuskS11RwqBWIOL7ZhCSV8zYg"><strong>4. How to Use TRIX on MEXC</strong></h2><div style="text-align:left" class="ace-line ace-line old-record-id-doxus5pfT2Kywaee18MGTCWD2Nd"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusRWyvT5XXWZYIQVjRsZflNh"><span style="font-size: 16px;">MEXC offers comprehensive charting tools, allowing users to customize TRIX settings and combine it with other technical indicators.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusBNTNvNtTnXxB78kJ4AceCe"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusRsJjL5kG1ddFX4HILr4Fcc"><span style="font-size: 16px;">Navigation: MEXC website → Spot/<a data-lark-is-custom="true" href="https://www.mexc.com/futures/BTC_USDT">Futures</a> → Indicators → TRIX</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxuszZJrCmdNkIeOqfqdjGxLne"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusAghalow3mhTx1j1RzfEKMk"><span style="font-size: 16px;">Whether trading <a data-lark-is-custom="true" href="https://www.mexc.com/exchange/BTC_USDT">Spot</a> or Futures, combining zero-line crossovers, signal-line crossovers, and divergence signals may help users assess entry and exit timing more systematically. Beginners are encouraged to start with small amounts and gradually develop a trading system that suits their needs.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusj3CcdGWblHBx99rlYeNwIe"><span style="font-size: 16px;"><br></span></div><div data-type="image" data-ace-gallery-json="{"items":[{"uuid":"0b787f1e-0adb-416a-8e02-995140190727","height":1400,"width":2936,"currHeight":1400,"currWidth":2936,"natrualHeight":1400,"natrualWidth":2936,"pluginName":"imageUpload","scale":1,"src":"https%3A%2F%2Finternal-api-drive-stream.larksuite.com%2Fspace%2Fapi%2Fbox%2Fstream%2Fdownload%2Fpreview%2FDrj7bszTcoWZHLxxSWJuqx2GsEg%2F%3Fpreview_type%3D16","file_token":"Drj7bszTcoWZHLxxSWJuqx2GsEg","image_type":"image/jpeg","size":1,"comments":[]}]}" class="image-uploaded gallery old-record-id-doxlgGuuyYslBYH4owN5iRr8X0e"><img src="https://mexc-rainbown-activityimages.s3.ap-northeast-1.amazonaws.com/banner/F20260831212307488vr07bsOEvqcxou.png" data-single-block="true" data-snapshot="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" data-suite="eyJmaWxlVG9rZW4iOiJEcmo3YnN6VGNvV1pITHh4U1dKdXF4MkdzRWciLCJvYmpUeXBlIjoiZG9jeCIsIm9ialRva2VuIjoiZG94bGdHdXV5WXNsQllING93TjVpUnI4WDBlIiwib3JpZ2luU3JjIjoiaHR0cHM6Ly9pbnRlcm5hbC1hcGktZHJpdmUtc3RyZWFtLmxhcmtzdWl0ZS5jb20vc3BhY2UvYXBpL2JveC9zdHJlYW0vZG93bmxvYWQvcHJldmlldy9Ecmo3YnN6VGNvV1pITHh4U1dKdXF4MkdzRWcvP3ByZXZpZXdfdHlwZT0xNiJ9" data-src="https://internal-api-drive-stream.larksuite.com/space/api/box/stream/download/all/Drj7bszTcoWZHLxxSWJuqx2GsEg/?mount_node_token=doxlgGuuyYslBYH4owN5iRr8X0e&mount_point=docx_image" data-width="2936" data-height="1400" data-lark-image-uri="drivetoken://Drj7bszTcoWZHLxxSWJuqx2GsEg" data-lark-image-width="2936" data-lark-image-height="1400" data-host-from-cloud="true" style="max-width: 100%; height: auto; border-radius: 12px; font-size: 16px;"></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusWXTPDV0V5GCVCR5LPo27ib"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-doxuspxouq5QzLn7QjN2TL04ngQ"><strong>5. Triple Exponential Average FAQ</strong></h2><div style="text-align:left" class="ace-line ace-line old-record-id-doxusHWut8Q7q29jsHmFKdWcPJc"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxuseh5Nw8oIT8XZjVkr6LqaAb"><strong style="font-size: 16px;">5.1 What is the Triple Exponential Average?</strong></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusJz8zDms6mfhDDH0ThsMC4e"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxus9BMy4uwMv2Pt79JkBk978C"><span style="font-size: 16px;">TRIX is an oscillator that applies exponential smoothing to price data three times and measures the rate of change of the triple-smoothed average. It is used to identify trend direction and potential reversal points.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusop8qSyvO2IA4Xpnl0MOIZf"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxusR1Ue3LNlPKrxTn2y7Bejsc"><strong style="font-size: 16px;">5.2 How do you use the TRIX indicator?</strong></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusqr8tAIEziPOloSgH8ExqXJ"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxuscJZNeBkSuZN95afU3fOyZb"><span style="font-size: 16px;">Focus on three main signal types: TRIX crossing the zero line to identify trend direction; TRIX crossing its signal line to confirm potential buy or sell timing; and divergence between TRIX and price to warn of a potential trend reversal.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxus5GSF6FKetA9BxGVGPKHiF7"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxus7SX9jARM80tgmpCjFhZN8d"><strong style="font-size: 16px;">5.3 What is the difference between TRIX and the Triple Exponential Moving Average?</strong></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusvihrfbcFwli3VTAwtzQrWs"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusSjqtKKXURRigTuwLDwzeqh"><span style="font-size: 16px;">TRIX shows the percentage rate of change of a triple-smoothed average and oscillates around the zero line. The Triple Exponential Moving Average is plotted over the price chart and is used to track price trends. The two indicators use related calculation logic but serve different purposes.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxus78J7EMPmSFXkt5yvdSz0Gd"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxusEznnsomSnapih6ZdIZW1Ic"><strong style="font-size: 16px;">5.4 How do you read a TRIX chart?</strong></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusU0K1vey1yQtEi7bP02KRzd"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusUKGvYFYNWbuyfGJ1LX79Fb"><span style="font-size: 16px;">When TRIX is above the zero line and rising, bullish momentum is strengthening. When it is below the zero line and falling, bearish momentum is strengthening. Changes in the slope of the line can reflect the strength of the trend.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusEHpKhHVIjODQFWnAk6JKXd"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxusRhC4CbyZCowZwmpTpEtIob"><strong style="font-size: 16px;">5.5 Is TRIX suitable for beginners?</strong></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusHSNG4WcvfzoxQHSg5fhbwb"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusAmDvlsUzmYWd3gNsuUplmO"><span style="font-size: 16px;">Yes. TRIX uses clear and intuitive signal rules, but beginners should be aware of its lag and the risk of false signals in range-bound markets. It is recommended to confirm signals with other indicators on MEXC and apply appropriate risk management.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxus5CCFiVu8fPYdezj0QzL33f"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusVXB4kAssZc2SRdLnoQ8W1f"><span style="font-size: 16px;">With its strong noise-filtering capabilities, TRIX is a practical tool for assessing trend and momentum. By understanding zero-line crossovers, signal-line crossovers, and divergence, and combining them with suitable parameter settings and risk controls, beginners can incorporate TRIX into their trading strategies more effectively.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusUtkWgZN8MPOzOn5FDvkAae"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxusOoSjt7dk2l434fwFDDluad"><span style="font-size: 16px;">Recommended Reading:</span></h3><ul start="1" class="list-bullet1"><li style="text-align:left" class="ace-line ace-line old-record-id-doxusV64qGF5rsCUFyHsLgL3nmc" data-list="bullet"><div><a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-the-psychological-line-psy-indicator-in-trading-443492945687418880" style="font-size: 16px;">How to Use the Psychological Line (PSY) Indicator in Trading: A Complete Beginner's Guide</a></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxushQ7l0nryA0bOKPEax4MqAh" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-to-use-the-directional-movement-index-dmi-in-trading-437460810149061632" data-lark-is-custom="true" style="font-size: 16px;">How to Use the Directional Movement Index (DMI) in Trading: A Complete Beginner's Guide</a></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxusZf5yqCiU6Q0hYEnaeDMuRh" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-to-use-the-brar-indicator-in-trading-436020492866343936" data-lark-is-custom="true" style="font-size: 16px;">How to Use the BRAR Indicator in Trading: A Complete Beginner's Guide</a></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxus9JlxEx37gzXEkmiOeIx1ub" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-to-use-the-commodity-channel-index-cci-in-trading-436075700375966720" data-lark-is-custom="true" style="font-size: 16px;">How to Use the Commodity Channel Index (CCI) in Trading: A Complete Beginner's Guide</a></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxusdCcICrtRkzDVDQBWWni5hq" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-to-use-the-cr-energy-index-in-trading-441192234786152448" data-lark-is-custom="true" style="font-size: 16px;">How to Use the CR Energy Index in Trading: A Complete Beginner's Guide</a></div></li></ul><div style="text-align:left" class="ace-line ace-line old-record-id-doxusv44PJ9c6J066v4kIbUkcUh"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusvxC3slSSWy6REm4uRCNPIb"><span style="font-size: 16px;"><strong>Risk Warning: </strong>Technical indicators are based on historical data and do not guarantee future performance. Digital assets are highly volatile. Trade cautiously based on your risk tolerance and avoid blindly following market trends.</span></div></div>
How to Use the Displaced Moving Average (DMA) in Trading: A Complete Beginner's Guide
<div data-page-id="RtCid0APGoQsuvxR1TkumjQks5g" data-lark-html-role="root" data-docx-has-block-data="false"><h2 class="heading-2 ace-line old-record-id-doxusr8i2S2l5dgHeTsi8JAkSwc"><strong>Overview:</strong></h2><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-doxus6xjQiFAVnA0jwj0y01ALlf" data-list="bullet"><div><span style="font-size: 16px;">The Displaced Moving Average (DMA) is a technical analysis tool that shifts a standard moving average forward or backward on a chart.</span></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxusMLlQDZuT9o63gDU8gjbW9G" data-list="bullet"><div><span style="font-size: 16px;">The DMA may help traders visualize trends and filter out some short-term market.</span></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxusyMVgRWzYunlUrXzbBGT0yg" data-list="bullet"><div><span style="font-size: 16px;">The DMA can be used to identify potential support and resistance areas, helping traders plan entries and exits.</span></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxusYi176acdAJvSGkl0DA9E6g" data-list="bullet"><div><span style="font-size: 16px;">The DMA, Simple Moving Average (SMA), and Exponential Moving Average (EMA) each have their own strengths and limitations, making them suitable for different trading styles.</span></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxuss6imzwAImvj9W1A8nFT52c" data-list="bullet"><div><span style="font-size: 16px;">On MEXC, users can easily configure and apply the DMA using the platform's built-in charting tools.</span></div></li></ul><div style="text-align:left" class="ace-line ace-line old-record-id-doxusHFzY5Vm3sYlLAnLZuNtw5S"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-doxusccQCrpG1wLsmbhYGYZg4QC"><strong>1. What Is the Displaced Moving Average?</strong></h2><div style="text-align:left" class="ace-line ace-line old-record-id-doxusGGtoK4r0Ox37vzwfjULjif"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusg63ElNG4AFWEduwOvoIPRc"><span style="font-size: 16px;">The Displaced Moving Average (DMA) is a technical indicator derived from the traditional <a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-moving-average-indicators-in-trading-416905955663768576">moving average</a>. Its core principle is to shift a standard moving average, such as a Simple Moving Average (SMA) or an <a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-the-exponential-moving-average-indicator-in-trading-416907527621799936">Exponential Moving Average</a> (EMA), forward or backward by a specified number of periods on the chart. The calculation itself does not change; only the moving average's position on the chart is adjusted.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusRSBcUcvjjq6jh9A24yAa6d"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusdTQciV5Xf3rfsjOcaXsyqt"><span style="font-size: 16px;">This shift may appear minor, but it can have a noticeable effect. When the moving average no longer closely follows every price fluctuation, traders may find it easier to observe the relationship between price and the broader trend, reduce distractions caused by short-term volatility, and make more measured trading decisions.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusDEG2R60axfXpUmRCSVv1Md"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-doxusY6zQgH4Z6sDHWBBu3XKjlb"><strong>2. How Does the Displaced Moving Average Work?</strong></h2><div style="text-align:left" class="ace-line ace-line old-record-id-doxus2z7hA6VOGt2HdDfstsXvjb"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusEL7gRuD9fRxLYAnBhwoV0e"><span style="font-size: 16px;">Setting up a DMA involves two steps:</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusj80JzYeVGCOdR8Kjn79Y7z"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusCKJEvmkYiX0ejiGh8em18f"><span style="font-size: 16px;">1) Choose the moving average period: Common examples include 10, 20, or 50 days. Shorter periods may suit active trading, while longer periods may be more appropriate for medium- to long-term trend analysis.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusL3ZKptBSo3CwcK7gRDytNh"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxus0xgzj54Y4jaZox9qIrPeYg"><span style="font-size: 16px;">2) Set the displacement value: A positive value shifts the moving average forward toward future periods, while a negative value shifts it backward toward historical periods.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusABk1aJKjdyD1b0qLphyVMf"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusTT3gPFP2JKzZihNA5ciJ9g"><span style="font-size: 16px;">A forward shift can help traders visualize the potential relationship between price and the moving average and anticipate how a trend may develop. A backward shift can support historical review by showing how price previously moved relative to the trend.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusvs5Z5PXn1MEYYHLVSr0q5E"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-doxusKFw2Vsqx1DIbtN20BReoTe"><strong>3. How to Use the Displaced Moving Average in Trading</strong></h2><div style="text-align:left" class="ace-line ace-line old-record-id-doxus6AYTtARdqAcuNcmZuMy8Df"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxusrBgd0KLT8XBJcVENAkQLlh"><span style="font-size: 16px;">3.1 Identify the trend direction</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusdj2ro5h3hl16Hz9E32tUDZ"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusQ1UIaCWzfsI0qkevKEYaPd"><span style="font-size: 16px;">When price consistently trades above the displaced moving average, the market is generally considered to be in an uptrend. When price remains below the moving average, the market may be in a downtrend. Depending on the displacement setting, the line may produce fewer price crossovers, which can help traders avoid overreacting to short-term fluctuations.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusvoJ5oFHSkP2LsWWKvi55ig"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxusZa22px5HLxxONoFOkL5vjg"><span style="font-size: 16px;">3.2 Identify support and resistance</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusSp5MKTWT8qAterJKvIRsCf"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusOgSc0dPiMOhwZbnj4Fj8Qf"><span style="font-size: 16px;">In an uptrend, traders can adjust the displacement so that the moving average aligns with previous pullback lows. When price approaches the moving average again, it may act as a support reference. Similarly, in a downtrend, the displaced moving average can be aligned with previous rebound highs and used as a resistance reference. A decisive break through the displaced moving average may indicate a potential trend reversal.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxus6dJymCH8OCMsE2QLJlyknb"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxus8U8xJKCBdvLFU3fOZXYIne"><span style="font-size: 16px;">3.3 Combine it with other indicators</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusnnpaMiCSA57kxsLdTSKuAh"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxussuva1CDsngkPoDGxWUt9Mc"><span style="font-size: 16px;">The DMA does not generate direct buy or sell signals on its own. A more reliable approach is to combine it with the <a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-the-relative-strength-index-rsi-in-trading-425570029981283328">Relative Strength Index</a>, <a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-the-macd-indicator-in-trading-426304203100942336">Moving Average Convergence Divergence</a>, candlestick patterns, and support and resistance levels. When the DMA aligns with signals from other indicators, traders may have greater confirmation for a potential set.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusbFx08CH2UQVHSshGsPk5UH"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-doxusgMntmCPVju0Ce0cdwRbhWg"><strong>4. Differences Among the DMA, SMA, and EMA</strong></h2><div style="text-align:left" class="ace-line ace-line old-record-id-doxus17Rylz4lYUhTHbBniCVBun"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxuserIQOeA5akQHDAgTkBtxvb"><span style="font-size: 16px;">The SMA gives equal weight to all prices in the selected period and generally responds more slowly to recent price changes. The EMA gives more weight to recent prices, making it suitable for short-term analysis, but it may also produce more false signals. The DMA does not change how the underlying moving average is calculated. Instead, it shifts the moving average's position to make the trend structure easier to read, which may help reduce misinterpretation in volatile markets. However, all moving averages are based on historical data, and shifting a moving average does not allow the DMA to predict future prices.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxus8nykPgsIvYAysV2QcSkAYc"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-doxusxnqF1bJKr9fSlPQ4XU33ne"><strong>5. How to Use the DMA on MEXC</strong></h2><div style="text-align:left" class="ace-line ace-line old-record-id-doxus5BV2S1Ej0BfDNXh6Eu5Ugd"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusc8cNIMa9PVqZiMm8eV4r5f"><span style="font-size: 16px;">Open the chart for any trading pair on the MEXC <a data-lark-is-custom="true" href="https://www.mexc.com/exchange/BTC_USDT">Spot</a> or Futures trading page, then add the DMA from the indicator library.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxus8LUESkUAfCXiQcF1tAM2Zg"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusjENlt6ykJiAlQyhHYPmuKf"><span style="font-size: 16px;">Navigation: MEXC Website → Spot/<a data-lark-is-custom="true" href="https://www.mexc.com/futures/BTC_USDT">Futures</a> → Indicators → DMA</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusxYWdxRmu7I36vzarlNz2Me"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-doxusG0WbmwGdjFY9sC3ct5BAAf"><strong>6. Advantages and Limitations of the DMA</strong></h2><div style="text-align:left" class="ace-line ace-line old-record-id-doxusQitCIQxZPW9LvndCt1tyHh"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusAEaFUFiuroNkKGPWtJ2Whe"><span style="font-size: 16px;"><strong>Advantages:</strong> The chart remains simple and clear, making trends easier to identify; the displacement can reduce distracting signals caused by frequent crossovers.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxushQJDZqvfzfohq6SWxr1Ple"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusBRueCOD84r34HKqPOe6S7f"><span style="font-size: 16px;"><strong>Limitations:</strong> The DMA remains a lagging indicator and cannot predict the future; an excessive displacement may disconnect the moving average from actual market behavior; the indicator may be less effective in sideways markets or during periods of sharp volatility volatility triggered by major news; and it should not be used as the sole basis for trading decisions.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusQlZMMbr30eJ84rCghiu3me"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-doxushqLmuTuJzgZqucI7EB6H8g"><strong>7. Displaced Moving Average FAQ</strong></h2><div style="text-align:left" class="ace-line ace-line old-record-id-doxusIKOAuT5uLkkR5n5DlLzXwg"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxus9Jz6QnrrANgKXIRPRueHue"><strong style="font-size: 16px;">7.1 How do you use a displaced moving average in trading?</strong></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusieeATgJ6daWw2oGF3Qyplc"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusjENNkKQGp6T4AyAMZyZasg"><span style="font-size: 16px;">First, set the moving average period and displacement value. Then, assess the trend by observing the relative positions of price and the moving average. Confirm the signal with other indicators before executing a trade.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusUTIM093rNHT3oNPhpwxJNR"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxusBFthQNdvnoEuNW918aEzgQ"><strong style="font-size: 16px;">7.2 What is the difference between a DMA, an EMA, and an SMA?</strong></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusBmPQ4ONBM35fiYbjxCCS2f"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusVyYjuNyBACPAU1HyM5TLHf"><span style="font-size: 16px;">The SMA responds most slowly, while the <a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-the-exponential-moving-average-indicator-in-trading-416907527621799936">EMA</a> is the most sensitive to recent price changes. The DMA shifts either type of moving average to a different position on the chart to make the trend easier to read.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxus8JR4XlTdRp1NGtNgwKqCVb"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxusQplVWU1Q5WK7jACkeLwxUg"><strong style="font-size: 16px;">7.3 What does the distance between price and a moving average indicate?</strong></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusBGWO7vkexmEKE74xdWyxVh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-FX0fdf9G3oXW3gxUEReueoDbsQh"><span style="font-size: 16px;">When price moves too far away from the moving average, it may suggest that price has become extended relative to its recent trend and could potentially move back toward the average. Traders can use this relationship as a reference for risk management.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusmsP7k9PVNYj4vRfSkpnSmh"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxus0o32m8efUWoRyqlszFCxub"><strong style="font-size: 16px;">7.4 Can the DMA be used alone to make trading decisions?</strong></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusMJTi3b4KZIyhw8lQDSIXmg"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusZHKBFC4m9CyoYEJ7nMeqlb"><span style="font-size: 16px;">It is not recommended. The DMA is primarily used to improve chart clarity and trend identification. It should be combined with other technical indicators and risk management strategies.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusm8Q1XbVxobAe4yz2tNK6Kg"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxusmPspQJq0qknPr4aWhboSng"><span style="font-size: 16px;">Recommended Reading:</span></h3><ul start="1" class="list-bullet1"><li style="text-align:left" class="ace-line ace-line old-record-id-doxus4WLCcdgtLeXi1qwwBqcLAd" data-list="bullet"><div><a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-the-psychological-line-psy-indicator-in-trading-443492945687418880" style="font-size: 16px;">How to Use the Psychological Line (PSY) Indicator in Trading: A Complete Beginner's Guide</a></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxusKoGIaSSBgnENnqrrAaCMVC" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-to-use-the-cr-energy-index-in-trading-441192234786152448" data-lark-is-custom="true" style="font-size: 16px;">How to Use the CR Energy Index in Trading: A Complete Beginner's Guide</a></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxusqJIHwX2DLdGZHPZH7RB4se" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-to-use-volume-ratio-vr-indicator-in-trading-443362198292994048" data-lark-is-custom="true" style="font-size: 16px;">How to Use Volume Ratio (VR) Indicator in Trading: A Complete Beginner's Guide</a></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxus6NNL14irKESUs5AC90ZsIc" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-to-use-the-commodity-channel-index-cci-in-trading-436075700375966720" data-lark-is-custom="true" style="font-size: 16px;">How to Use the Commodity Channel Index (CCI) in Trading: A Complete Beginner's Guide</a></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxusZlGcTJhmVCOcW44yxx9csf" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-to-use-the-directional-movement-index-dmi-in-trading-437460810149061632" data-lark-is-custom="true" style="font-size: 16px;">How to Use the Directional Movement Index (DMI) in Trading: A Complete Beginner's Guide</a></div></li></ul><div style="text-align:left" class="ace-line ace-line old-record-id-doxusRHrPH14YYq3FsflyhzqrTh"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxushs78jJaAVbKM8xNG9kub6e"><span style="font-size: 16px;"><strong>Risk Warning: </strong>Technical indicators are based on historical data and do not guarantee future performance. Digital assets are highly volatile. Trade cautiously based on your risk tolerance and avoid blindly following market trends.</span></div></div>
How to Use the Psychological Line (PSY) Indicator in Trading: A Complete Beginner's Guide
<div data-page-id="JXEVde5Z7oSGpYxsCwzuyBlHsXg" data-lark-html-role="root" data-docx-has-block-data="true"><h2 class="heading-2 ace-line old-record-id-OgDYd2ZVloZCavxwTIZuSJexsXc"><strong>Key Takeaways:</strong></h2><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-KrzWd82h2oRZLaxBw2HulwI6sJf" data-list="bullet"><div><span style="font-size: 16px;">Psychological Line (PSY) is a momentum-based technical indicator that measures market sentiment between buyers and sellers, with values ranging from 0 to 100.</span></div></li><li class="ace-line ace-line old-record-id-XVyld83fnoiNR2xhxHeuKaMGsAe" data-list="bullet"><div><span style="font-size: 16px;">PSY calculates the percentage of price-increasing periods within a specific timeframe to identify potential overbought and oversold conditions.</span></div></li><li class="ace-line ace-line old-record-id-FwaXdQ4q1o4kRQxpFXduNL0KsHf" data-list="bullet"><div><span style="font-size: 16px;">A PSY value above 75 is generally considered overbought, while a value below 25 indicates oversold conditions. The 50 level represents a balance between buying and selling pressure.</span></div></li><li class="ace-line ace-line old-record-id-CTNmdps2JoFhLpxRbSkuWRI1sNf" data-list="bullet"><div><span style="font-size: 16px;">PSY should not be used alone. Traders are advised to combine it with other indicators, such as RSI and Moving Average, to confirm signals.</span></div></li><li class="ace-line ace-line old-record-id-OmBHdcC1NoC5tcxnt9Ku2VY2sXe" data-list="bullet"><div><span style="font-size: 16px;">MEXC users can add the PSY indicator to candlestick charts to support crypto trading decisions.</span></div></li></ul><div class="ace-line ace-line old-record-id-IYiOdj4HRoqtAixpeOfuacUVs4b"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-NHJid5dIloBCytxstLiuK0J1swh"><strong>1. What Is Psychological Line (PSY)?</strong></h2><div class="ace-line ace-line old-record-id-WUjIdWFfwoGlEoxOAtSuVT0Gswc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-UDZsdItprowYeixzpvcuwTmJs2d"><span style="font-size: 16px;">Psychological Line (PSY) is a sentiment-based technical indicator that measures market optimism and pessimism over a specific period.</span></div><div class="ace-line ace-line old-record-id-CwXcd0t85oQjs9x3FqUuUwhjsC1"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-V6uadURp9ooA6TxNtveusEemsZe"><span style="font-size: 16px;">When prices continue rising, traders may become increasingly optimistic or even overly confident. When prices continue falling, market sentiment may become more negative or fearful.</span></div><div class="ace-line ace-line old-record-id-M9bUdTuXAoc2oXx0sbVuuYdGsAh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-V9KrdYHyGosZp1x4YyHuixNXsDd"><span style="font-size: 16px;">PSY quantifies market sentiment by calculating the percentage of rising periods within a given timeframe. Its value ranges from 0 to 100:</span></div><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-RNaFdB1zGoyfs2xGhASu0gUhsfD" data-list="bullet"><div><span style="font-size: 16px;"> A value of 100 means all periods recorded price increases. </span></div></li><li class="ace-line ace-line old-record-id-Jc8adAnafoYdoKxwydEuS3bEsHc" data-list="bullet"><div><span style="font-size: 16px;"> A value of 0 means all periods recorded price declines. </span></div></li><li class="ace-line ace-line old-record-id-RERbdjTebo2xQrxqVztudsJRsUf" data-list="bullet"><div><span style="font-size: 16px;"> A value of 50 means rising and declining periods are evenly balanced. </span></div></li></ul><div class="ace-line ace-line old-record-id-QT9ndTYPIomJnGxOP1Su2YZusOb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-OI4VdGO3Vo5TbaxyNEgulXpWssf"><span style="font-size: 16px;">In crypto markets, where price movements are often highly volatile and sentiment-driven, PSY can provide useful references for identifying potentially overheated or oversold market conditions. <a data-lark-is-custom="true" href="https://www.mexc.com/">MEXC</a>'s charting tools allow users to directly add the PSY indicator for market analysis.</span></div><div class="ace-line ace-line old-record-id-JmDDdreIqoEolgx8oEduk8XusYd"><span style="font-size: 16px;"><br></span></div><div style="text-align:center" data-type="image" data-ace-gallery-json="{"items":[{"uuid":"88717fca-efc1-4da2-912c-cd5f066fad55","height":1478,"width":2938,"currHeight":1478,"currWidth":2938,"natrualHeight":1478,"natrualWidth":2938,"pluginName":"imageUpload","scale":1,"src":"https%3A%2F%2Finternal-api-drive-stream.larksuite.com%2Fspace%2Fapi%2Fbox%2Fstream%2Fdownload%2Fpreview%2FTfo6boMBMo2aC9xV4VOuQzcesjg%2F%3Fpreview_type%3D16","file_token":"Tfo6boMBMo2aC9xV4VOuQzcesjg","image_type":"image/png","size":254538,"comments":[]}]}" class="image-uploaded gallery old-record-id-T9codCb6goHhU2xu1wQuTbgQs7e"><img src="https://mexc-rainbown-activityimages.s3.ap-northeast-1.amazonaws.com/banner/F20260821132906434gz4dKbH4hNvDPL.png" data-single-block="true" data-snapshot="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" data-suite="eyJmaWxlVG9rZW4iOiJUZm82Ym9NQk1vMmFDOXhWNFZPdVF6Y2VzamciLCJvYmpUeXBlIjoiZG9jeCIsIm9ialRva2VuIjoiVDljb2RDYjZnb0hoVTJ4dTF3UXVUYmdRczdlIiwib3JpZ2luU3JjIjoiaHR0cHM6Ly9pbnRlcm5hbC1hcGktZHJpdmUtc3RyZWFtLmxhcmtzdWl0ZS5jb20vc3BhY2UvYXBpL2JveC9zdHJlYW0vZG93bmxvYWQvcHJldmlldy9UZm82Ym9NQk1vMmFDOXhWNFZPdVF6Y2VzamcvP3ByZXZpZXdfdHlwZT0xNiJ9" data-src="https://internal-api-drive-stream.larksuite.com/space/api/box/stream/download/all/Tfo6boMBMo2aC9xV4VOuQzcesjg/?mount_node_token=T9codCb6goHhU2xu1wQuTbgQs7e&mount_point=docx_image" data-width="2938" data-height="1478" data-lark-image-uri="drivetoken://Tfo6boMBMo2aC9xV4VOuQzcesjg" data-lark-image-width="2938" data-lark-image-height="1478" data-host-from-cloud="true" style="max-width: 100%; height: auto; border-radius: 12px; font-size: 16px;"></div><div class="ace-line ace-line old-record-id-NGWQdMVi6o2IabxLosVuUa9Iswf"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-GAfCd2aqGo88aRxFt5QuQjXJs1g"><strong>2. How To Interpret PSY Values</strong></h2><div class="ace-line ace-line old-record-id-ReB3dhodkoKC6bxMXiquOgJUs2b"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-CHHodajKyokVuLxnmOtumQ8dswb"><strong style="font-size: 16px;">Overbought and Oversold Levels:</strong></div><div class="ace-line ace-line old-record-id-Pvf0djhbWot9JIxJX9FunufKsOe"><span style="font-size: 16px;">When PSY rises above 75, it suggests that the market has experienced too many consecutive price increases and investor sentiment may have become overly optimistic. This may indicate overbought conditions and a higher possibility of a pullback.</span></div><div class="ace-line ace-line old-record-id-BKnadkYNzoA7B2xvyiAuLQTmsLe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Q4Tudkt6ao5O48xgz64uhl64sWh"><span style="font-size: 16px;">When PSY falls below 25, it suggests excessive pessimism and possible oversold conditions, where a rebound may become more likely.</span></div><div class="ace-line ace-line old-record-id-Fm98decouowSBBxCxjhuVRd9sBn"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-F9Uzdy7Qnol6jXxAV8qurMozsPg"><span style="font-size: 16px;">Extreme readings above 90 or below 10 may indicate that market sentiment has reached an excessive level and a potential reversal could be approaching.</span></div><div class="ace-line ace-line old-record-id-JoesdXmbboXDe6xRhw8uxn70sxc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-WfHzdDkbFoKkn8xwvT9uPmUZsvb"><strong style="font-size: 16px;">The Significance of the 50 Level:</strong></div><div class="ace-line ace-line old-record-id-UZAOdKyR5ojp5Hxqs0zu8M9DsKd"><span style="font-size: 16px;">A move above 50 from below may indicate strengthening buying momentum.</span></div><div class="ace-line ace-line old-record-id-NhDhd5Dexo078NxaaYNuilyDsKo"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-XsNyd3PkOoTv9XxPlgdugmrBsde"><span style="font-size: 16px;">A drop below 50 from above may suggest increasing selling pressure.</span></div><div class="ace-line ace-line old-record-id-BaA0dDTPoot3iqx0XJVueUf2szd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-UaN2dAi0ToH8ZOxumFVuv7DXsCy"><span style="font-size: 16px;">When PSY remains above 50 for an extended period, buyers may be dominating the market. When it stays below 50, sellers may have greater control.</span></div><div class="ace-line ace-line old-record-id-VMHpdI0qFocZfIxD8t9uskSAsBh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-IGHGdgoNgoSiMvxATeYuEuuXssf"><strong style="font-size: 16px;">Divergence Signals:</strong></div><div class="ace-line ace-line old-record-id-KR9ddKm6eonRdQx3Ri8uI10tsFh"><span style="font-size: 16px;">PSY divergence occurs when price movements and the indicator move in different directions.</span></div><div class="ace-line ace-line old-record-id-ABKedjfxSo1TH6x3upFu7ZQisSg"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Uq9kdkkT9omgfEx4ODFu6Lz8sJe"><span style="font-size: 16px;">When price reaches a new high but PSY fails to rise accordingly, it may indicate weakening upward momentum and a potential reversal risk. When price reaches a new low but PSY starts recovering, it may suggest that selling pressure is weakening and a potential bottom may be forming. </span></div><div class="ace-line ace-line old-record-id-Sd19d3yxUoyPYsxJHTTuQvmHseb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Aw2bdafexo2akcxEEu0unGi0sNh"><span style="font-size: 16px;">Divergence is one of the key signals traders can monitor when using PSY.</span></div><div class="ace-line ace-line old-record-id-UId9dOwy5oNog1xaRtcuKM83sRe"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-XJL4dtTJloCbEqxGghkuKodRscM"><strong>3. How To Use PSY in Trading</strong></h2><div class="ace-line ace-line old-record-id-Atrydu83ToqODGxXaYAu8inmsce"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-VSogdA8CjogytjxEPJJulAcnsac"><strong style="font-size: 16px;">1) Use PSY as a Sentiment Filter</strong></div><div class="ace-line ace-line old-record-id-XAzHdb1bJoPMxuxoThMu4Vm3sgc"><span style="font-size: 16px;">In an uptrend, when PSY falls below 25 and enters oversold area, traders can combine price action signals to look for potential entry opportunities after a pullback.</span></div><div class="ace-line ace-line old-record-id-RF5VdZzHTokWh8xjKgvu9rWjsXg"><span style="font-size: 16px;">In a downtrend, when PSY rises above 75, traders can monitor potential short opportunities or consider reducing exposure.</span></div><div class="ace-line ace-line old-record-id-JIv8dZUGjoZ82jxEQ4kusjhIswg"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-FO9KdnnYsolOzNxgIquuBIHQs4f"><strong style="font-size: 16px;">2) Combine PSY With Other Indicators</strong></div><div class="ace-line ace-line old-record-id-BB9WdyoOGo8w2lxkRdbuL7xSs2b"><span style="font-size: 16px;">PSY only measures the ratio of rising and declining periods and does not reflect the size of price changes.</span></div><div class="ace-line ace-line old-record-id-R6abdVP3mol2WMxk2wpu1k4RsJe"><span style="font-size: 16px;">To improve signal reliability, traders can combine PSY with other technical indicators, such as <a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-the-relative-strength-index-rsi-in-trading-425570029981283328">RSI</a>, <a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-the-macd-indicator-in-trading-426304203100942336">MACD</a>, and <a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-the-moving-average-of-volume-in-trading-421863713722995712">volume</a> indicators.</span></div><div class="ace-line ace-line old-record-id-G5mSdI36QoKRoOx8IV2uZZRHs0c"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-HvLIdQ1WxoNZtZxXmMUuduwQsnh"><strong style="font-size: 16px;">3) Wait for Confirmation After Extreme Readings</strong></div><div class="ace-line ace-line old-record-id-WL5BdEQ1ToIrkjx6U1OuMNXAssg"><span style="font-size: 16px;">Traders should avoid immediately taking a reversal position when PSY first enters overbought or oversold area.</span></div><div class="ace-line ace-line old-record-id-VZVjdKfewoL4Njx3krTufc6js3q"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-OnPIdKlztocyT0xTjQjuOVMVsGc"><span style="font-size: 16px;">Instead, wait for PSY to move back from extreme levels and confirm the reversal with other signals to avoid entering too early against a strong trend.</span></div><div class="ace-line ace-line old-record-id-FBiFd3EJ8o7oJBxePLGuv7xLsac"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Xx1HdmCTxoScfYxu4yXuefPQsOe"><span style="font-size: 16px;">MEXC users can add PSY from the indicator list on any trading pair's chart and adjust parameters based on their trading timeframe.</span></div><div class="ace-line ace-line old-record-id-C3DKdBrykoBqlFxhmPiukFoKsre"><span style="font-size: 16px;"><br></span></div><div style="text-align:center" class="ace-line ace-line old-record-id-OrNmduefGo0KXjxpGAJu0a4Wswg"><span style="font-size: 16px;">*BTN-<strong>Trade Futures</strong>&BTNURL=<u><a data-lark-is-custom="true" href="https://www.mexc.com/futures/BTC_USDT">https://www.mexc.com/futures/BTC_USDT</a></u>*</span></div><div class="ace-line ace-line old-record-id-YO8NdQBW7oviMRxPzpduNIm6src"><span style="font-size: 16px;"><br></span></div><div style="text-align:center" data-type="image" data-ace-gallery-json="{"items":[{"uuid":"59beac06-4ffe-4c6a-9a99-b468e1c3bfcf","height":1384,"width":2936,"currHeight":1384,"currWidth":2936,"natrualHeight":1384,"natrualWidth":2936,"pluginName":"imageUpload","scale":1,"src":"https%3A%2F%2Finternal-api-drive-stream.larksuite.com%2Fspace%2Fapi%2Fbox%2Fstream%2Fdownload%2Fpreview%2FFBZpbYpv0o9Do9xk43uumCtXsKb%2F%3Fpreview_type%3D16","file_token":"FBZpbYpv0o9Do9xk43uumCtXsKb","image_type":"image/png","size":466897,"comments":[]}]}" class="image-uploaded gallery old-record-id-WDpxdtJO4o6zU5xF969uOrKwsrc"><img src="https://mexc-rainbown-activityimages.s3.ap-northeast-1.amazonaws.com/banner/F20260821132905821dDytKyCeLGZWYK.png" data-single-block="true" data-snapshot="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" data-suite="eyJmaWxlVG9rZW4iOiJGQlpwYllwdjBvOURvOXhrNDN1dW1DdFhzS2IiLCJvYmpUeXBlIjoiZG9jeCIsIm9ialRva2VuIjoiV0RweGR0Sk80bzZ6VTV4Rjk2OXVPckt3c3JjIiwib3JpZ2luU3JjIjoiaHR0cHM6Ly9pbnRlcm5hbC1hcGktZHJpdmUtc3RyZWFtLmxhcmtzdWl0ZS5jb20vc3BhY2UvYXBpL2JveC9zdHJlYW0vZG93bmxvYWQvcHJldmlldy9GQlpwYllwdjBvOURvOXhrNDN1dW1DdFhzS2IvP3ByZXZpZXdfdHlwZT0xNiJ9" data-src="https://internal-api-drive-stream.larksuite.com/space/api/box/stream/download/all/FBZpbYpv0o9Do9xk43uumCtXsKb/?mount_node_token=WDpxdtJO4o6zU5xF969uOrKwsrc&mount_point=docx_image" data-width="2936" data-height="1384" data-lark-image-uri="drivetoken://FBZpbYpv0o9Do9xk43uumCtXsKb" data-lark-image-width="2936" data-lark-image-height="1384" data-host-from-cloud="true" style="max-width: 100%; height: auto; border-radius: 12px; font-size: 16px;"></div><div class="ace-line ace-line old-record-id-SAtvdVlrxosZ7lx8o8CuJs6ysca"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-O1ihdCoMxoKAYexqnbIu5NXLsmR"><strong>4. Things To Consider When Using PSY</strong></h2><div class="ace-line ace-line old-record-id-GJbAdTYQAotxnIxRmZPu2DxMsld"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-UzMJdSbggoQfEExH6QQuurEbsUg"><span style="font-size: 16px;">PSY is a relatively simple indicator that only measures the ratio of rising and declining periods without considering the magnitude of price changes.</span></div><div class="ace-line ace-line old-record-id-LIH0dD1aTof1dTxQjN6u1NVWsHe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-KkDHd4Kbqoy46qxOLHXuguU9sXe"><span style="font-size: 16px;">As a result, it may react slowly during sharp price movements.</span></div><div class="ace-line ace-line old-record-id-U0eadIkpSoXuxwxRBVsu8e6Gs1d"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-IamJdcJ7JohjJ3xB48fugZh3sbf"><span style="font-size: 16px;">PSY does not provide direct buy or sell signals and should only be used to evaluate market sentiment and potential overbought or oversold conditions.</span></div><div class="ace-line ace-line old-record-id-WIdid7Q2SobFKlxzezEuZ20hs9b"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Pj25dREZyoh5L1xq8CvuyzW2s3f"><span style="font-size: 16px;">Traders should combine PSY with market trends, price action, volume analysis, and proper risk management. Position sizing and risk control remain essential parts of any trading strategy.</span></div><div class="ace-line ace-line old-record-id-WnQRdO6kGo21RqxguCoujoLRsl2"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-NJXndy5K5o7Pysx3MOWuAn5psMb"><strong>5. PSY FAQ</strong></h2><div class="ace-line ace-line old-record-id-Ao6gdxLhAoLmENx5ZvpuEyaNsxd"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-RC1Cd3hZjockLtx2HftuYNmxshd"><strong style="font-size: 16px;">5.1 How can I use PSY in trading?</strong></h3><div class="ace-line ace-line old-record-id-Lz5VdoYUGo5iIBxJzDnuL2bxspb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Owb7dxAodoPVtXxJanuuQowzsP4"><span style="font-size: 16px;">After adding PSY to the candlestick chart, monitor key levels such as:</span></div><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-FgcWdkhbfo8MOcx1gnnumdy6s4e" data-list="bullet"><div><span style="font-size: 16px;"> Above 75: Potential overbought conditions </span></div></li><li class="ace-line ace-line old-record-id-LY1NdwBNnosaU9xe7Jxu23Uaszd" data-list="bullet"><div><span style="font-size: 16px;"> Below 25: Potential oversold conditions </span></div></li><li class="ace-line ace-line old-record-id-HTcUdKufuohukixm0hrujm46snf" data-list="bullet"><div><span style="font-size: 16px;"> Crosses of the 50 level: Changes in market sentiment </span></div></li></ul><div class="ace-line ace-line old-record-id-XBdadVi0boWcrzxNYkauvrz0sBe"><span style="font-size: 16px;">Always confirm signals with price patterns and other indicators before making trading decisions.</span></div><div class="ace-line ace-line old-record-id-OBe5dKdYGofRlmxWwXru98fUscd"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-N1vAdsyuqoKjIMxaotAuSv5Cspg"><strong style="font-size: 16px;">5.2 What does PSY represent?</strong></h3><div class="ace-line ace-line old-record-id-HQt6dhm0Uo6WrfxKCAJuJPs8scc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-VuPVdDTxmoqbnqx7cQruuqTWsHT"><span style="font-size: 16px;">PSY represents the percentage of price-increasing periods within a specific timeframe. It measures market sentiment and reflects the relative strength between buyers and sellers.</span></div><div class="ace-line ace-line old-record-id-XBGedkLzbon7HbxhfWIuWvLusWc"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-XGFidoSpNoRaQXxdCsnusoOnsWb"><strong style="font-size: 16px;">5.3 What does a PSY value above 75 mean?</strong></h3><div class="ace-line ace-line old-record-id-X4HWdABdxoDJMZxB5W8uoLEMssg"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-OBmwdfxihoP6FwxtOUfuP1mSssO"><span style="font-size: 16px;">A PSY value above 75 indicates that the market has experienced a high proportion of price increases recently. It suggests strong optimism and potential overbought conditions, with increased pullback risk.</span></div><div class="ace-line ace-line old-record-id-D9QbdvvfLoaaH3xnHpUuWOJ6s3g"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-Z0ppd40AJo4wTaxcuuVuQZE0std"><strong style="font-size: 16px;">5.4 Can PSY be used as the only trading signal?</strong></h3><div class="ace-line ace-line old-record-id-S6ePdwYBCoam7QxJLykujerusUh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-IqXMdhbR0omOqCxa1nku7Gkrsdg"><span style="font-size: 16px;">No. PSY only measures market sentiment and does not fully reflect price structure or market trends. It should be combined with indicators such as RSI, Moving Average, and volume analysis.</span></div><div class="ace-line ace-line old-record-id-XeIvdqvCRo1ZC2xKPOtufUBEsag"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-Jogud2vRJo1eD5xK9s9uxEzpsAh"><strong style="font-size: 16px;">5.5 Does psychology play a major role in trading?</strong></h3><div class="ace-line ace-line old-record-id-KDpjdxhDXoUc2sxBf5yuZ7wVsKg"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-D4SodDMrnoXh3YxHL38u9PSes3f"><span style="font-size: 16px;">Psychology plays an important role in trading. Managing emotions and maintaining discipline can significantly affect long-term performance. However, a complete trading system and proper risk management are equally important.</span></div><div class="ace-line ace-line old-record-id-P7BzdmumDoRfdhxA1spubvNYshd"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-F61jdqQWjor3RIxx4q5u6xW2ste"><strong style="font-size: 16px;">5.6 How can I use PSY on MEXC?</strong></h3><div class="ace-line ace-line old-record-id-BIYrddUUFoGPOuxTKiHu2w5Fswf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-JV9sdKtBooZnKexfFVqubak5sdb"><span style="font-size: 16px;">Open any trading pair's chart on MEXC Spot or Futures, then add PSY from <strong>Indicators</strong>.</span></div><div class="ace-line ace-line old-record-id-Ic8kdxoxIoIXdmxWEIwupX6jsbc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-TnwpdMBb0ol9SwxEtFfu1oPUs0g"><span style="font-size: 16px;">Go to MEXC official website → Spot/<a data-lark-is-custom="true" href="https://www.mexc.com/futures/BTC_USDT">Futures</a> → Indicators → PSY</span></div><div class="ace-line ace-line old-record-id-S0SBdRkA8o7S9Exo3rIu9C4ssue"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-G9Ivd4MzuoNopox9bC1ul6D8smc"><span style="font-size: 16px;">Recommended Reading:</span></h3><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-JpBcdKphAozc26xLH49ubgdmsOh" data-list="bullet"><div><a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-the-ichimoku-cloud-indicator-in-trading-416912217726086144" style="font-size: 16px;">How to Use the Ichimoku Cloud Indicator in Trading: A Complete Beginner's Guide</a></div></li><li class="ace-line ace-line old-record-id-SqwydLiwHoMcTxxuhhku6gyRsdh" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-to-use-the-parabolic-sar-indicator-in-trading-416910594228448256" data-lark-is-custom="true" style="font-size: 16px;">How to Use the Parabolic SAR Indicator in Trading: A Complete Beginner's Guide</a></div></li><li class="ace-line ace-line old-record-id-JOHAdELiVoza4JxUTV0usWf7sdg" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-to-use-moving-average-indicators-in-trading-416905955663768576" data-lark-is-custom="true" style="font-size: 16px;">How to Use Moving Average Indicators in Trading: A Complete Beginner's Guide</a></div></li><li class="ace-line ace-line old-record-id-OCBCdzcQEobCH3xETgwurVIOsWb" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-to-use-bollinger-bands-in-trading-416909030860353536" data-lark-is-custom="true" style="font-size: 16px;">How to Use Bollinger Bands in Trading: A Complete Beginner's Guide</a></div></li><li class="ace-line ace-line old-record-id-QiISdj0REokitrxasm4uHvXlsyg" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-to-use-the-stochastic-oscillator-in-trading-427169948248728576" data-lark-is-custom="true" style="font-size: 16px;">How to Use the Stochastic Oscillator in Trading: A Complete Beginner's Guide</a></div></li></ul><div class="ace-line ace-line old-record-id-HGBpdQHvIo5FT0xqVi8umnvyszd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-XrpDdQJmnoT193xoEBquLaGbsvh"><span style="font-size: 16px;"><strong>Risk Disclaimer: </strong>Technical indicators are calculated based on historical data and are provided for reference only. They do not guarantee future market movements. Digital asset markets are highly volatile and involve risks. Please make independent decisions based on your own risk tolerance and avoid relying solely on technical indicators when trading.</span></div></div>
How to Use Volume Ratio (VR) Indicator in Trading: A Complete Beginner's Guide
<div data-page-id="JP21dPXnroycD5xuQxru6XZFs9M" data-lark-html-role="root" data-docx-has-block-data="true"><h2 class="heading-2 ace-line old-record-id-Bv7Ydhzk4oUA5nx7ps7uleSGslt"><strong>Key Takeaways:</strong></h2><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-UNT7dLTEXo1Q8Mx6G9FuMzPrsLc" data-list="bullet"><div><span style="font-size: 16px;">Volume Ratio (VR) is a technical indicator that compares trading volume during price increases and declines to measure changes in buying and selling activity.</span></div></li><li class="ace-line ace-line old-record-id-Sqp5dVP8EoYK0Rxrecyureyms5c" data-list="bullet"><div><span style="font-size: 16px;">VR calculates the ratio between accumulated volume during price increases and declines over a specific period.</span></div></li><li class="ace-line ace-line old-record-id-KAxqd6FFFo4hMpxxCSKuwifLsgb" data-list="bullet"><div><span style="font-size: 16px;">VR values are commonly divided into four zones: oversold, normal, overbought, and warning zones, each providing different trading signals.</span></div></li><li class="ace-line ace-line old-record-id-CXZXdRLsNo4ytgxL2tyu2qkEsth" data-list="bullet"><div><span style="font-size: 16px;">VR can provide early signals for potential market reversals, but should be combined with other indicators for confirmation.</span></div></li><li class="ace-line ace-line old-record-id-Sm7FdgZ2doJFdcxWgEzuh23Psve" data-list="bullet"><div><span style="font-size: 16px;">MEXC users can add VR and other volume-based indicators to candlestick charts for trading analysis.</span></div></li></ul><div class="ace-line ace-line old-record-id-Xlded6PwfoCDUOxJ1CQuGOfesEd"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-I6lDdPtIWoMuMsx1t3OuE2TMsEg"><strong>1. What Is Volume Ratio (VR)?</strong></h2><div class="ace-line ace-line old-record-id-VgiQdlqLbo6iPJxq97muZNpis3e"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-VkgxdhmlCo0rJEx1W7xubS7ksnc"><span style="font-size: 16px;">Volume Ratio (VR) is a technical analysis indicator based on trading volume. It is built on the idea that price increases are often accompanied by higher trading volume, while price declines may occur with weaker volume activity.</span></div><div class="ace-line ace-line old-record-id-Fbzidm6iFonm2Pxn52xufA99sPh"><span style="font-size: 16px;">VR compares the accumulated trading volume during price increases with the accumulated trading volume during price declines over a specific period. This helps traders evaluate the balance between buying and selling activity and identify whether the market may be overbought or oversold.</span></div><div class="ace-line ace-line old-record-id-EFJBdTL1dozpmuxYyqXuXZKRsrh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-JzopdBmmuoYHfExRkupu4Iecsad"><span style="font-size: 16px;">A higher VR value suggests stronger buying activity, while a lower VR value indicates stronger selling pressure. For beginners, VR provides a simple way to understand changes in supply and demand.</span></div><div class="ace-line ace-line old-record-id-TJRWdnHUGoj7cgxyrwKuvg30sQd"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-ChYrdmCvqoj9irxQVAIu1bemsRg"><strong>2. How to Interpret VR Values</strong></h2><div class="ace-line ace-line old-record-id-Mkq3dF1DYoy4cYx8dpRudC53sWE"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-SufzdJotvoEv4OxN3LbuAfeQsCb"><span style="font-size: 16px;">VR is mainly interpreted based on different value ranges:</span></div><div class="ace-line ace-line old-record-id-RvPada2e7oLofZxRMcxuEVVesEf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-WNEmdDaIHozZwzxaUvrukcs6skh"><span style="font-size: 16px;">Normal Range (80%–350%): When VR remains within this range, buying and selling activity is relatively balanced. Price movements are usually more stable, and traders may wait for clearer signals before making decisions.</span></div><div class="ace-line ace-line old-record-id-FBy5dqMKFoe5qjx3x2nu0CEYsBh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Kg80dGWwVo0hf2xJmx5uBZ0Asrh"><span style="font-size: 16px;">Oversold Range (Below 60%): When VR falls below 60%, it indicates strong selling pressure and potentially oversold market conditions. At this stage, selling activity may be approaching exhaustion, indicating the possibility of a rebound.</span></div><div class="ace-line ace-line old-record-id-TgrpdeCkqoTb2Jx3HT8umlI2sEg"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-ZbLadqDmOoLTzUxaC8muChtTs3f"><span style="font-size: 16px;">Overbought Range (Above 350%): When VR rises above 350%, it suggests strong buying activity and excessive market enthusiasm. The market may enter an overbought condition, increasing the risk of chasing prices at high levels. Traders may consider managing positions and monitoring potential pullbacks.</span></div><div class="ace-line ace-line old-record-id-LtvPdVVaXo1WKAxKQFtuEg16s5o"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Mm7TdkNn9okjylxMgDju4x3As7d"><span style="font-size: 16px;">Warning Range (550%–700%): When VR reaches 550%–700%, buying activity may become excessive and approach exhaustion. This range may indicate a higher risk of a market top and potential reversal.</span></div><div class="ace-line ace-line old-record-id-Rju8dI05folNhnxrB9QuJewUs3e"><span style="font-size: 16px;"><br></span></div><div style="text-align:center" data-type="image" data-ace-gallery-json="{"items":[{"uuid":"44cd4280-b1f5-437d-9571-75913dc9c1fa","height":1478,"width":2938,"currHeight":1478,"currWidth":2938,"natrualHeight":1478,"natrualWidth":2938,"pluginName":"imageUpload","scale":1,"src":"https%3A%2F%2Finternal-api-drive-stream.larksuite.com%2Fspace%2Fapi%2Fbox%2Fstream%2Fdownload%2Fpreview%2FE7BlbF7avoh8T7xAYfRulteQs0c%2F%3Fpreview_type%3D16","file_token":"E7BlbF7avoh8T7xAYfRulteQs0c","image_type":"image/png","size":254909,"comments":[]}]}" class="image-uploaded gallery old-record-id-CJvHdYBdxojJZ6xixgruNzsMsLb"><img src="https://mexc-rainbown-activityimages.s3.ap-northeast-1.amazonaws.com/banner/F20260821091518492MCSN9vilvkDyPQ.png" data-single-block="true" data-snapshot="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" data-suite="eyJmaWxlVG9rZW4iOiJFN0JsYkY3YXZvaDhUN3hBWWZSdWx0ZVFzMGMiLCJvYmpUeXBlIjoiZG9jeCIsIm9ialRva2VuIjoiQ0p2SGRZQmR4b2pKWjZ4aXhncnVOenNNc0xiIiwib3JpZ2luU3JjIjoiaHR0cHM6Ly9pbnRlcm5hbC1hcGktZHJpdmUtc3RyZWFtLmxhcmtzdWl0ZS5jb20vc3BhY2UvYXBpL2JveC9zdHJlYW0vZG93bmxvYWQvcHJldmlldy9FN0JsYkY3YXZvaDhUN3hBWWZSdWx0ZVFzMGMvP3ByZXZpZXdfdHlwZT0xNiJ9" data-src="https://internal-api-drive-stream.larksuite.com/space/api/box/stream/download/all/E7BlbF7avoh8T7xAYfRulteQs0c/?mount_node_token=CJvHdYBdxojJZ6xixgruNzsMsLb&mount_point=docx_image" data-width="2938" data-height="1478" data-lark-image-uri="drivetoken://E7BlbF7avoh8T7xAYfRulteQs0c" data-lark-image-width="2938" data-lark-image-height="1478" data-host-from-cloud="true" style="max-width: 100%; height: auto; border-radius: 12px; font-size: 16px;"></div><div class="ace-line ace-line old-record-id-Wv3tdh1DpoCBUxxunKmusmaAsxh"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-GQ5YdoA8oov8fYxGQRLup1dRsQh"><strong>3. How to Use VR in Trading</strong></h2><div class="ace-line ace-line old-record-id-MbLidR8lNoil0Jxpwzju5iHKsob"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-QO4FdsLeRoEA86x0cs2uVq1LsJb"><span style="font-size: 16px;">3.1 Identify Potential Entry and Exit Opportunities</span></h3><div class="ace-line ace-line old-record-id-LtdkdfMJtokCimx3KNduPDhCs3b"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-V0XEdJrxQodW8jxMk6VuEfAAsFh"><span style="font-size: 16px;">When VR enters an oversold range, traders can monitor potential rebound opportunities. When VR reaches overbought or warning ranges, traders may consider taking profits or reducing exposure.</span></div><div class="ace-line ace-line old-record-id-OuisdoOfuocPqfxU5pOu5VnPs0c"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-NypSdnTRko1PAOx676euhLQ0sFg"><span style="font-size: 16px;">VR is generally more useful when identifying oversold conditions. At high levels, VR should be combined with other indicators for confirmation.</span></div><div class="ace-line ace-line old-record-id-Z8YMdTxE5o8xawxfRRmudjJYs4h"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-ZBN2dOulmofBc5xYg3iuBLQksxg"><span style="font-size: 16px;">3.2 Identify Volume-Price Divergence</span></h3><div class="ace-line ace-line old-record-id-R8kadcaGCojN7excXGgu1ZIBsqb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-OQNIdHsawocl3jxlIQkuOGiOsyf"><span style="font-size: 16px;">When price reaches a new high but VR fails to reach a new high, it may indicate weakening buying activity and a potential reversal risk. When price reaches a new low but VR does not continue declining, it may suggest that selling pressure is weakening and a potential bottom may be forming. </span></div><div class="ace-line ace-line old-record-id-C0rTdnFZLoH6hRxEorGuVDjfsae"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-H7BedxZM8omho3xtJetugvVms0e"><span style="font-size: 16px;">Divergence signals can provide useful references when identifying possible market turning points.</span></div><div class="ace-line ace-line old-record-id-Q2U0dq8Roohxs0xyRQWucCVdsV2"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-PpaudMTnRoG5wexyeXnuWrZYsnA"><span style="font-size: 16px;">3.3 Analyze Changes in Market Activity</span></h3><div class="ace-line ace-line old-record-id-UxzXdI2X4oHz9zxdWEgua7i8sGd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-WZQPd2L4monESLxt6k6uM3KosUg"><span style="font-size: 16px;">A sharp increase in VR may indicate that significant trading activity is entering the market. When a rapid VR increase is accompanied by a breakout above key resistance levels, it may suggest stronger upward momentum and increased market activity.</span></div><div class="ace-line ace-line old-record-id-TFggdZWczoXpYwxH66FuauZHsYc"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-Tph4d4YbbodFWdx0fHUuTdFmssg"><span style="font-size: 16px;">3.4 Combine VR with Other Indicators</span></h3><div class="ace-line ace-line old-record-id-Vu6NdfIJLomK6pxncc8ug7V5sRe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Kr56d7eT7oLHJPxipaiuklZos4d"><span style="font-size: 16px;">VR should not be used as a standalone signal. Traders can combine it with other technical indicators, such as <a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-moving-average-indicators-in-trading-416905955663768576">Moving Average</a>, <a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-bollinger-bands-in-trading-416909030860353536">Bollinger Bands</a>, and <a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-the-relative-strength-index-rsi-in-trading-425570029981283328">Relative Strength Index (RSI)</a>.</span></div><div class="ace-line ace-line old-record-id-IA4NdLcDWoOSb4xKwAIuP3b9sog"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-R57sdBh0SoDtWux6Z4Yu6u46sTZ"><span style="font-size: 16px;">For example, when VR moves upward from oversold levels and price breaks above a moving average, the signal may become more reliable.</span></div><div class="ace-line ace-line old-record-id-P9Bcd1M15ozNcUxH56vumpeVsHe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-RMoldqnvUouadZxZzh9uWzjgsQh"><span style="font-size: 16px;">Traders should also apply proper risk management, including setting stop-loss levels and controlling position sizes.</span></div><div class="ace-line ace-line old-record-id-LVeUdOBapoQIQHxd25yuNuqQsBh"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-MN9adoPXYoYJ1exQtPCu7YrDsgg"><strong>4. How to Use VR on MEXC</strong></h2><div class="ace-line ace-line old-record-id-Mjv0dbaSioHpqxxmKuRu8BuzsOf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-W0BWdFed4o44p3xc9gpu9XjIsod"><span style="font-size: 16px;">MEXC provides advanced candlestick charts and technical analysis tools to help users analyze market conditions. Users can add the VR indicator directly from the chart interface.</span></div><div class="ace-line ace-line old-record-id-UtmRd5F7Ioh0fVx6iJnuqOJDsfb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Ftz7dVSJZoaXx8x59Vbuy6WzsNg"><span style="font-size: 16px;">Go to MEXC official website → <a data-lark-is-custom="true" href="https://www.mexc.com/exchange/BTC_USDT">Spot</a>/<a data-lark-is-custom="true" href="https://www.mexc.com/futures/BTC_USDT">Futures</a> → Indicators → VR</span></div><div class="ace-line ace-line old-record-id-DWxrd3EkUo5WpExwkvIuPijFsRd"><span style="font-size: 16px;"><br></span></div><div style="text-align:center" data-type="image" data-ace-gallery-json="{"items":[{"uuid":"33ea9f81-d7e5-4d5f-8d12-b94735e8b8b8","height":1470,"width":2938,"currHeight":1470,"currWidth":2938,"natrualHeight":1470,"natrualWidth":2938,"pluginName":"imageUpload","scale":1,"src":"https%3A%2F%2Finternal-api-drive-stream.larksuite.com%2Fspace%2Fapi%2Fbox%2Fstream%2Fdownload%2Fpreview%2FYZ5BbYA0poTz0axohtvumMOEsRb%2F%3Fpreview_type%3D16","file_token":"YZ5BbYA0poTz0axohtvumMOEsRb","image_type":"image/png","size":481666,"comments":[]}]}" class="image-uploaded gallery old-record-id-VTP1dqjWMo5xI0xX3euuHQt0sxb"><img src="https://mexc-rainbown-activityimages.s3.ap-northeast-1.amazonaws.com/banner/F20260821091515560Rdh49oWTxq6QTk.png" data-single-block="true" data-snapshot="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" data-suite="eyJmaWxlVG9rZW4iOiJZWjVCYllBMHBvVHowYXhvaHR2dW1NT0VzUmIiLCJvYmpUeXBlIjoiZG9jeCIsIm9ialRva2VuIjoiVlRQMWRxaldNbzV4STB4WDNldXVIUXQwc3hiIiwib3JpZ2luU3JjIjoiaHR0cHM6Ly9pbnRlcm5hbC1hcGktZHJpdmUtc3RyZWFtLmxhcmtzdWl0ZS5jb20vc3BhY2UvYXBpL2JveC9zdHJlYW0vZG93bmxvYWQvcHJldmlldy9ZWjVCYllBMHBvVHowYXhvaHR2dW1NT0VzUmIvP3ByZXZpZXdfdHlwZT0xNiJ9" data-src="https://internal-api-drive-stream.larksuite.com/space/api/box/stream/download/all/YZ5BbYA0poTz0axohtvumMOEsRb/?mount_node_token=VTP1dqjWMo5xI0xX3euuHQt0sxb&mount_point=docx_image" data-width="2938" data-height="1470" data-lark-image-uri="drivetoken://YZ5BbYA0poTz0axohtvumMOEsRb" data-lark-image-width="2938" data-lark-image-height="1470" data-host-from-cloud="true" style="max-width: 100%; height: auto; border-radius: 12px; font-size: 16px;"></div><div class="ace-line ace-line old-record-id-AKzadu6JyoshhwxlsH5uugwYsqd"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-SFxCdqMtqoibfvxVrCGuGGxFsmu"><strong>5. Things to Consider When Using VR</strong></h2><div class="ace-line ace-line old-record-id-RXhXd2TMMoPromxKxFKu5O6ysOf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-S6EQdq3Xjor5Xjx6Qjau4RnEsVc"><span style="font-size: 16px;">1) VR is a supporting technical indicator and cannot guarantee accurate predictions. Unexpected market events may cause signals to become less effective.</span></div><div class="ace-line ace-line old-record-id-APUZdYDaBoiQG9xdDevucEsusif"><span style="font-size: 16px;">2) VR reference levels may vary depending on different timeframes and assets.</span></div><div class="ace-line ace-line old-record-id-RcOAdHGfOoV6JxxK5XiurwVUsfh"><span style="font-size: 16px;">3) VR signals at extremely high levels may become less reliable and should be combined with other indicators.</span></div><div class="ace-line ace-line old-record-id-XGXFdGAbcoXY6Qx1FT1uXrIdsVk"><span style="font-size: 16px;">4) Every trading decision involves risk. Traders should set appropriate stop-loss levels, manage position sizes, and avoid excessive trading.</span></div><div class="ace-line ace-line old-record-id-EDxDdsHHhogTvpx8PeRuBi1rswg"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-DS38d5xKzob8zVx8mYluxdMYs0b"><strong>6. VR FAQ</strong></h2><div class="ace-line ace-line old-record-id-Lv9edXOg3od9ZfxYRHGu8L55sec"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-M2sJdsSvHolpvXxaR8rue8ypsAd"><strong style="font-size: 16px;">6.1 How can I use VR?</strong></h3><div class="ace-line ace-line old-record-id-SQijd8cbPoLx4SxU5yiuB7Ybsje"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-KC7sd7rE9oh1w7x3X59uoAtlsYd"><span style="font-size: 16px;">1) Check the VR range:</span></div><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-P8PpdGrEoo4KOBxVSebuXDZSs0d" data-list="bullet"><div><span style="font-size: 16px;"> Below 60%: Potential oversold conditions </span></div></li><li class="ace-line ace-line old-record-id-Uy1rd5u1qonIoXxRHmNuJzKDsXc" data-list="bullet"><div><span style="font-size: 16px;"> Above 350%: Potential overbought conditions</span></div></li></ul><div class="ace-line ace-line old-record-id-LsWrdK2wRoDMeIx6JDNuiaMCshg"><span style="font-size: 16px;">2) Look for volume-price divergence signals.</span></div><div class="ace-line ace-line old-record-id-Q8oJdR0dYobxN2xP2SPukexLsGg"><span style="font-size: 16px;">3) Confirm signals with other technical indicators before making trading decisions. </span></div><div class="ace-line ace-line old-record-id-C6kRdbEBOoh5XrxI4IguWvedscg"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-PXtQdQaR8omTDrxuRY8ubd2Ws6g"><strong style="font-size: 16px;">6.2 How should I interpret VR values?</strong></h3><div class="ace-line ace-line old-record-id-KzZLdE7vkoqMHwxz7gKujuhtsPc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-SofgddIPJoejGsx4sqMumJkBsac"><span style="font-size: 16px;">1) 80%–350%: Normal range</span></div><div class="ace-line ace-line old-record-id-B0sad9xlloMcqEx7CYQuItYfsP9"><span style="font-size: 16px;">2) Below 60%: Oversold range</span></div><div class="ace-line ace-line old-record-id-EFJddyg7OoAtNwxpRWzuynvcsuc"><span style="font-size: 16px;">3) Above 350%: Overbought range</span></div><div class="ace-line ace-line old-record-id-EqtPdQrkWoa33fxDCS5ujA9zsWb"><span style="font-size: 16px;">4) 550%–700%: Warning range with higher reversal risk</span></div><div class="ace-line ace-line old-record-id-OJI3d1n4ToALAxxkSsAujrq9siU"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-VClMdnlW7oHEXAxL2OFuNo5HsTc"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-DI8idqZedo3ErdxavMiuS5zCsDd"><strong style="font-size: 16px;">6.3 What assets are suitable for VR analysis?</strong></h3><div class="ace-line ace-line old-record-id-RGZbdI47modia8xGQrWu3fKRs3p"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-IuqJdhvK6oWZJGxAGTgunvZzsfe"><span style="font-size: 16px;">VR is more suitable for assets with active trading volume and sufficient liquidity, such as major cryptocurrencies.</span></div><div class="ace-line ace-line old-record-id-A6bkdAxxKoPzkYxQeYIuzcnssSe"><span style="font-size: 16px;">For assets with low trading activity or limited volatility, VR signals may provide less meaningful references.</span></div><div class="ace-line ace-line old-record-id-Ew1mdu54yo4ahpxOE7SuDNgNsde"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-VoMAdhdp8oew2exjAIuuCOx5skc"><strong style="font-size: 16px;">6.4 What is the difference between VR and Relative Volume?</strong></h3><div class="ace-line ace-line old-record-id-DzcRdFcCGoca8FxIUShue5EBsBf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-TnUgdCGCVo3GoexZoXBuroFGshf"><span style="font-size: 16px;">VR measures the relationship between trading volume during price increases and declines, helping evaluate buying and selling activity.</span></div><div class="ace-line ace-line old-record-id-OL8nd7Wx8ouTLnxQByXursTTsXe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-E6XUdpQgnoFzRwxVy9luqJX1s1b"><span style="font-size: 16px;">Relative Volume compares current trading volume with historical average volume to identify unusual changes in market activity.</span></div><div class="ace-line ace-line old-record-id-O7HId3PSyoqoONxM6FAuBzousjc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-NfMndRzAqoAv2Mxq4Y8u4CYMs4f"><span style="font-size: 16px;">The two indicators focus on different aspects of volume analysis and can complement each other.</span></div><div class="ace-line ace-line old-record-id-GS5td6YVsofIONxfyIaumwWGsvh"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-Ltrwdc4BVot2Qqx0uWPulkdHsSh"><strong style="font-size: 16px;">6.5 Can VR be used as the only trading signal?</strong></h3><div class="ace-line ace-line old-record-id-JGJEdo4C2oWn2qxWkeiuibyHsse"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-QXSRd2NmLoIaFnxRJCzupMtvsTe"><span style="font-size: 16px;">No. VR should not be used alone to make trading decisions. Traders should combine VR with price action, other technical indicators, and proper risk management strategies.</span></div><div class="ace-line ace-line old-record-id-KlmHddhMEonW4xxXZsnuX3XzsXg"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-H4dmdZFdMoPUkTxDepvuk6YqsHf"><span style="font-size: 16px;">Recommended Reading:</span></h3><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-A1EodBalSoE7iOxyojjuBYCIsSh" data-list="bullet"><div><a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-the-cr-energy-index-in-trading-441192234786152448" style="font-size: 16px;">How to Use the CR Energy Index in Trading: A Complete Beginner's Guide</a></div></li><li class="ace-line ace-line old-record-id-IeYTdCtmToLunExqHfuupMHasor" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-to-use-the-commodity-channel-index-cci-in-trading-436075700375966720" data-lark-is-custom="true" style="font-size: 16px;">How to Use the Commodity Channel Index (CCI) in Trading: A Complete Beginner's Guide</a></div></li><li class="ace-line ace-line old-record-id-Snu6dnbCRoALiWxyvSMuPmOzsje" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-to-use-the-stochastic-oscillator-in-trading-427169948248728576" data-lark-is-custom="true" style="font-size: 16px;">How to Use the Stochastic Oscillator in Trading: A Complete Beginner's Guide</a></div></li><li class="ace-line ace-line old-record-id-FJwfdJXyRoWYchxGZ1FuEfq5scc" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-to-use-the-moving-average-of-volume-in-trading-421863713722995712" data-lark-is-custom="true" style="font-size: 16px;">How to Use the Moving Average of Volume in Trading: A Complete Beginner's Guide</a></div></li><li class="ace-line ace-line old-record-id-AxlydTCGNoxNyhxmP9EuMxFdswh" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-to-use-the-parabolic-sar-indicator-in-trading-416910594228448256" data-lark-is-custom="true" style="font-size: 16px;">How to Use the Parabolic SAR Indicator in Trading: A Complete Beginner's Guide</a></div></li></ul><div class="ace-line ace-line old-record-id-SNwYdo3cgoeFMVxAOs2uJnD3swd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-BKfidq23Do3kbgxgf4cuZedNsee"><span style="font-size: 16px;"><strong>Risk Disclaimer: </strong>Technical indicators are calculated based on historical data and are provided for reference only. They do not guarantee future market movements. Digital asset markets are highly volatile and involve risks. Please make independent decisions based on your own risk tolerance and carefully evaluate potential risks before trading.</span></div></div>
How to Use the CR Energy Index in Trading: A Complete Beginner's Guide
<div data-page-id="Y96OdFrL9o4gbHxANC0uCjcrsgb" data-lark-html-role="root" data-docx-has-block-data="true"><h2 class="heading-2 ace-line old-record-id-doxusxrwMG8AyHURaY0M4tBEnpj"><strong>Key Takeaways</strong></h2><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-doxus0EBoWLX7IgHEeEHQu9omlc" data-list="bullet"><div><span style="font-size: 16px;">The CR Energy Index is a momentum indicator that compares upward and downward price pressure relative to the previous period's midpoint.</span></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxusg1qZ0ByQWtCXCAxspoRePS" data-list="bullet"><div><span style="font-size: 16px;">CR is commonly centered around 100. Readings above or below this level may help traders assess the balance between buying and selling pressure, but they do not predict direction with certainty.</span></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxusy59qnXyhUQCOEniT0d8Stg" data-list="bullet"><div><span style="font-size: 16px;">Levels such as 40 and 300–400 are traditional reference zones rather than automatic buy or sell signals. Market structure, volume, and other indicators should be used for confirmation.</span></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxussQOg865nFincaLjapJUG8d" data-list="bullet"><div><span style="font-size: 16px;">CR can be viewed together with several moving-average lines to identify possible support, resistance, momentum shifts, and divergence.</span></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxusq4Y7pW98U9TzNw3kxTz9uh" data-list="bullet"><div><span style="font-size: 16px;">On MEXC, users can add CR from the chart's Indicators menu and adjust its parameters to match their timeframe and trading approach.</span></div></li></ul><div style="text-align:left" class="ace-line ace-line old-record-id-doxusaAUHO1PQtjhZFkQwwduBce"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-doxusiOLys9miK0nMClSkhyjgrg"><strong>1. What Is the CR Energy Index?</strong></h2><div style="text-align:left" class="ace-line ace-line old-record-id-doxusZFpLbu9aRl0TKMHtbDVYLe"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusRVCEV204YFAIAA00g2m4kb"><span style="font-size: 16px;">The CR Energy Index, also called the CR indicator or Energy Index, is a technical analysis tool used to compare buying and selling pressure over a selected period. It measures how far each period's high and low move relative to the previous period's midpoint.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxuszsJgPxl7g5rHR4VofwIjub"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusRQqg1NW0Zmhmd6Grtv1WYg"><span style="font-size: 16px;">In simple terms, CR attempts to show whether bullish or bearish pressure is becoming stronger. It can also be viewed with moving-average lines to identify potential support and resistance zones. Because CR is based on historical price data, it should be treated as an analytical reference rather than a prediction of future performance.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxuswJVeeeUmLvcyI1PT1txgNf"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxuss3ap68Ey5miVQ7HRmMiBMh"><span style="font-size: 16px;">For beginners, the most useful way to read CR is to combine three elements: the indicator's position relative to 100, the speed and direction of its movement, and its relationship with the accompanying moving-average lines. You can access the CR indicator directly from the charting tools on <a data-lark-is-custom="true" href="https://www.mexc.com/zh-MY/">MEXC</a>.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusgr5niWWMQ1VlVlPOJ0Ssid"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-doxusjQQO5h051HAgN3PMheHPzw"><strong>2. How Is the CR Energy Index Calculated?</strong></h2><div style="text-align:left" class="ace-line ace-line old-record-id-doxusBcTyytPFqP342cV5XaEPEc"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusZeQ8iw671YBp9nlJ7J4Z9d"><span style="font-size: 16px;">CR first calculates a midpoint for the previous period, then compares the current period's high and low with that midpoint. The standard calculation commonly uses 26 periods.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusveJwSrMhRE3Qu59RXfMOVf"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusoUihMZIHJtmPs3LS3bqXbe"><strong style="font-size: 16px;">Step 1: Calculate the midpoint</strong></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxus4ANcyUw3WlksJIVRb4Pw7V"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxuscgfufrkZSKKqjZvITrfPyh"><span style="font-size: 16px;">Midpoint = (High + Low) / 2</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusS6w4l63VrbvXD8sv6vqoie"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusP85oycUQbVZyzQS1ThXhdc"><strong style="font-size: 16px;">Step 2: Calculate upward and downward movement</strong></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusT4t4FR0ffdUdydH66pW7ce"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusmylAaeOmY8BYegzYx1Fvuf"><span style="font-size: 16px;">Upward movement = max(0, Current High − Previous Midpoint)</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusoB8otwEi64zd6VAsIveNHu"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusOSE79kEJHhNVwrxwgDww9d"><span style="font-size: 16px;">Downward movement = max(0, Previous Midpoint − Current Low)</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxuswD0uS3BAbAZmAlYkKHHYfc"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusuSpr6FEt6xyz3MI5EPugfd"><strong style="font-size: 16px;">Step 3: Add the values over the selected period</strong></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusd1qiQijJH7JIZHNNexGX4e"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxuskjkkHWe8QAEsbQ1rAUHaRc"><span style="font-size: 16px;">For the standard 26-period setting, add all upward movement values to obtain total bullish pressure, and add all downward movement values to obtain total bearish pressure.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxus1NaZXKDuMdGDZZbxVwIz1d"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusfiuUwPqtP27pyEqscY91Cg"><strong style="font-size: 16px;">Step 4: Calculate CR</strong></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusmnffGtgCBQAaRgwTG5JNJb"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusDgtgT4rtWKUiRHKAnQ9xBd"><span style="font-size: 16px;">CR = (Sum of Upward Movement / Sum of Downward Movement) × 100</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxustWtfINyfoOBgw6n7RfkGdc"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxussmjzWrw1dRYT2jXxixRnnd"><span style="font-size: 16px;">A CR value of 100 means that the measured upward and downward pressure is equal over the calculation window. A higher or lower reading shows the relative balance of the two, not a guaranteed future price move.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxus2YRiqqwaweMiAjRtSmQbYd"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxuseVimtTIHSCveCUwhLmEXBf"><span style="font-size: 16px;">MEXC's CR settings shown below use 26 for the main CR period and 10, 20, 40, and 60 for the auxiliary lines. Parameters may vary across charting platforms, so refer to the values displayed on the relevant page rather than assuming that one configuration is universal.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxuspbylrjJIKnp7gBgfzl7FTd"><span style="font-size: 16px;"><br></span></div><div data-type="image" data-ace-gallery-json="{"items":[{"uuid":"894ea5c3-86a8-4c88-a6c6-43f8082665ff","height":479.42718,"width":1019.9986960000001,"currHeight":479.42718,"currWidth":1019.9986960000001,"natrualHeight":1380,"natrualWidth":2936,"pluginName":"imageUpload","scale":0.347411,"src":"https%3A%2F%2Finternal-api-drive-stream.larksuite.com%2Fspace%2Fapi%2Fbox%2Fstream%2Fdownload%2Fpreview%2FWG4NbF1avoW8y4xNdCSuRgujsHd%2F%3Fpreview_type%3D16","file_token":"WG4NbF1avoW8y4xNdCSuRgujsHd","image_type":"image/jpeg","size":1,"comments":[]}]}" class="image-uploaded gallery old-record-id-doxlgn7VeprJuzx38AwYauVqOwr"><img src="https://mexc-rainbown-activityimages.s3.ap-northeast-1.amazonaws.com/banner/F20260818110452900glPN91Zvy6CS5G.png" data-single-block="true" data-snapshot="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" data-suite="eyJmaWxlVG9rZW4iOiJXRzROYkYxYXZvVzh5NHhOZENTdVJndWpzSGQiLCJvYmpUeXBlIjoiZG9jeCIsIm9ialRva2VuIjoiZG94bGduN1ZlcHJKdXp4MzhBd1lhdVZxT3dyIiwib3JpZ2luU3JjIjoiaHR0cHM6Ly9pbnRlcm5hbC1hcGktZHJpdmUtc3RyZWFtLmxhcmtzdWl0ZS5jb20vc3BhY2UvYXBpL2JveC9zdHJlYW0vZG93bmxvYWQvcHJldmlldy9XRzROYkYxYXZvVzh5NHhOZENTdVJndWpzSGQvP3ByZXZpZXdfdHlwZT0xNiJ9" data-src="https://internal-api-drive-stream.larksuite.com/space/api/box/stream/download/all/WG4NbF1avoW8y4xNdCSuRgujsHd/?mount_node_token=doxlgn7VeprJuzx38AwYauVqOwr&mount_point=docx_image" data-width="2936" data-height="1380" data-lark-image-uri="drivetoken://WG4NbF1avoW8y4xNdCSuRgujsHd" data-lark-image-width="2936" data-lark-image-height="1380" data-host-from-cloud="true" style="max-width: 100%; height: auto; border-radius: 12px; font-size: 16px;"></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusM9HwnFMPZwRyuAhLa4cCRg"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-doxus8CCK6a43dY0TPgQz3TlqDh"><strong>3. How to Use the CR Energy Index in Trading</strong></h2><div style="text-align:left" class="ace-line ace-line old-record-id-doxus2d4oAAvnKdu54vIVearBPd"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxusRZP20QLYn7zUV0RGfFi68b"><span style="font-size: 16px;">3.1 Use the 100 centerline to assess market strength</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusUMrzyqaPvt4LPGr9LOLjkb"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxussdX4X2FbCKFBAc1QbvaDlb"><span style="font-size: 16px;">The 100 level serves as CR's centerline. When CR remains above 100 for an extended period, upward pressure may be stronger than downward pressure. When it remains below 100, bearish pressure may be more dominant.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxuscAVQ3AuiWulqbIqFfrl4Db"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusBCrEoB7PNsxbAIt8T6iPof"><span style="font-size: 16px;">A move through 100 may indicate a shift in momentum, but a single crossover is not enough to confirm a reversal. Traders may wait for the move to persist, review the broader trend, and use volume or price structure for additional confirmation.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusYCl1XE7gzGyIAMPuoNXxWe"><span style="font-size: 16px;"><br></span></div><div data-type="image" data-ace-gallery-json="{"items":[{"uuid":"d1947755-9844-4299-9cdc-982ad671947a","height":511.734476,"width":1019.997212,"currHeight":511.734476,"currWidth":1019.997212,"natrualHeight":1474,"natrualWidth":2938,"pluginName":"imageUpload","scale":0.347174,"src":"https%3A%2F%2Finternal-api-drive-stream.larksuite.com%2Fspace%2Fapi%2Fbox%2Fstream%2Fdownload%2Fpreview%2FE8ZPb97DOoSOknxBb2XutkLRsLb%2F%3Fpreview_type%3D16","file_token":"E8ZPb97DOoSOknxBb2XutkLRsLb","image_type":"image/jpeg","size":1,"comments":[]}]}" class="image-uploaded gallery old-record-id-doxlgK5fqUkDE6k6VXciN4Cc3oc"><img src="https://mexc-rainbown-activityimages.s3.ap-northeast-1.amazonaws.com/banner/F20260818110451701Dt3zwTn3XwE8uG.png" data-single-block="true" data-snapshot="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" data-suite="eyJmaWxlVG9rZW4iOiJFOFpQYjk3RE9vU09rbnhCYjJYdXRrTFJzTGIiLCJvYmpUeXBlIjoiZG9jeCIsIm9ialRva2VuIjoiZG94bGdLNWZxVWtERTZrNlZYY2lONENjM29jIiwib3JpZ2luU3JjIjoiaHR0cHM6Ly9pbnRlcm5hbC1hcGktZHJpdmUtc3RyZWFtLmxhcmtzdWl0ZS5jb20vc3BhY2UvYXBpL2JveC9zdHJlYW0vZG93bmxvYWQvcHJldmlldy9FOFpQYjk3RE9vU09rbnhCYjJYdXRrTFJzTGIvP3ByZXZpZXdfdHlwZT0xNiJ9" data-src="https://internal-api-drive-stream.larksuite.com/space/api/box/stream/download/all/E8ZPb97DOoSOknxBb2XutkLRsLb/?mount_node_token=doxlgK5fqUkDE6k6VXciN4Cc3oc&mount_point=docx_image" data-width="2938" data-height="1474" data-lark-image-uri="drivetoken://E8ZPb97DOoSOknxBb2XutkLRsLb" data-lark-image-width="2938" data-lark-image-height="1474" data-host-from-cloud="true" style="max-width: 100%; height: auto; border-radius: 12px; font-size: 16px;"></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusZU5QrcKjwFC7ccR8GHOGke"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxussRX3xNW7JYZnbbplDUsKGh"><span style="font-size: 16px;">3.2 Treat extreme readings as alert zones</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusW77lcE036EYRMlgRWMTJwf"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxussbaOkYeiqLRZoRRU9BvaFb"><span style="font-size: 16px;">Traditional CR analysis often treats readings below 40 as a possible oversold zone and readings around 300–400 or higher as a possible overheated zone. These thresholds can help traders identify conditions that deserve closer attention.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusJnObUW74liGugN9EWED78d"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusKRiMj1qmYpebSPKorCFeMb"><span style="font-size: 16px;">However, CR below 40 does not mean that a bottom has formed, and CR above 300–400 does not mean that a decline must follow. Strong trends can keep the indicator at extreme levels for longer than expected. Traders should look for confirmation from price action, volume, volatility, or another momentum indicator before entering or reducing a position.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusB8iGA6nZ7FM732DlRX8Vsg"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxus9OulRe1pTdXvpobiuNcfZd"><span style="font-size: 16px;">3.3 Compare CR with its moving-average zones</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusEkDiZ0tCBn6u73trlSH9mg"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusI3cIjtzMF2s6QnAd3Bgqrf"><span style="font-size: 16px;">CR is commonly displayed with multiple moving-average lines. Some CR methods group the shorter lines into a secondary zone and the longer lines into a primary zone. When CR rises into or crosses these zones, they may act as areas of resistance. When CR falls into or crosses them from above, they may act as areas of support.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusU3nCZdoF6rwiJwYoQ6brsd"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxus75isjtkFh5O1rd8J5vDLAf"><span style="font-size: 16px;">These zones are not fixed price levels. If CR moves inside a cluster of averages, momentum may become less clear and price may consolidate. In that situation, traders can wait for a confirmed break, check whether the moving averages are expanding or converging, and reduce position size if volatility is elevated.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusojKVEMTvBDNajp5sUyGhUc"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxusm6jED6WcpFNwpouJodl7sh"><span style="font-size: 16px;">3.4 Watch for rapid rebounds below the moving averages</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusxCSYSGSNyQhljpCtaRnvRd"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxus3vnXDcjV6QNC7mqwsreBte"><span style="font-size: 16px;">One traditional CR setup looks for the indicator to fall below all auxiliary lines and then rebound to roughly 160% of its recent low. For example, a rise from 100 to 160 would meet this numerical condition. Some traders interpret this as a potential short-term profit-taking signal after a rebound.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusA1WtFwGYfZbGXXXNw2qq4e"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxuslcKb1wnSwQqc0Smcf8ZWzf"><span style="font-size: 16px;">Context matters. During a strong uptrend, a drop below the auxiliary lines may instead be part of a temporary pullback. Traders should review the prevailing trend, nearby support, volume, and the behavior of the price itself before acting.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusu4T8cZVU5EYaghILv7InIb"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxusRzNBrIfwmcf6BiGB1aaTQc"><span style="font-size: 16px;">3.5 Monitor rare moving-average convergence</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxus9vM7gGcOeM1tl3lewsVgcg"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusyZnSHM5ApeBxSFyAzp048g"><span style="font-size: 16px;">When several CR moving-average lines converge near the same point, the indicator may be approaching a transition in momentum. This pattern is relatively uncommon and may draw attention to a potential turning window.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusqPgFOjV2D0kL9tWL7U8DMd"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusJin4NoLrlqIcnGYrueAycg"><span style="font-size: 16px;">Convergence alone does not show whether price will move up or down. Traders may wait for CR to break away from the cluster, then use market structure and volume to assess direction. A stop-loss may be placed at a level that invalidates the setup, subject to the trader's risk tolerance and timeframe.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxus1QHglfIZFAVHcBfSc5aTgb"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-doxusQK6Ax6NvMpJU5PyjCLDPZO"><strong>4. Confirmation Tools and Risk Management</strong></h2><div style="text-align:left" class="ace-line ace-line old-record-id-doxusM4LyMqLIwqj76On8Rujabh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-MkMadfIiXou2Toxh6Axu75Sls4d"><span style="font-size: 16px;">The CR indicator has two key limitations:</span></div><div class="ace-line ace-line old-record-id-VfKcdvmXzomgsMxCgtKupASzsyc"><span style="font-size: 16px;">1. Once the CR enters the "earthquake zone," it is difficult to determine whether it will move through the zone smoothly.</span></div><div class="ace-line ace-line old-record-id-ISWXdbscnodn2dx1LepuinIEsSe"><span style="font-size: 16px;">2. During extremely strong market trends, the CR may continue rising indefinitely, making it difficult to judge whether it has already reached a high level.</span></div><div class="ace-line ace-line old-record-id-HchAd1Y5fofYP9xbL1auGzQ0s2c"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-CbsedU4cToW0R8xtUnBuCMm4sY3"><span style="font-size: 16px;">The CR indicator is generally more effective at identifying potential market bottoms than tops. Using it to identify tops carries greater risk and should be confirmed with other indicators, such as the volume ratio and <a data-lark-is-custom="true" href="https://www.mexc.com/zh-MY/support/article/how-to-use-bollinger-bands-in-trading-416909030860353536">Bollinger Bands</a>. Once the CR rises above 250 and continues climbing, its usual high-level signal rules may need to be adjusted accordingly. Divergence may also occur between the CR and price, especially when prices are at elevated levels, so additional caution is warranted.</span></div><div class="ace-line ace-line old-record-id-DnzZdtEljopFZcxQAmtuui6Gsjf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-AqjkdIm7Lo0EJHxG3hvu4CTAsNk"><span style="font-size: 16px;">When trading crypto assets on MEXC, consider using the CR indicator together with tools such as the Williams %R and <a data-lark-is-custom="true" href="https://www.mexc.com/zh-MY/support/article/how-to-use-moving-average-indicators-in-trading-416905955663768576">Moving Averages</a>, rather than relying on a single signal. The crypto market can be highly volatile, so proper position sizing and risk management are essential.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusnrfJZyJOZEgPYj6guxRdJc"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-doxusdLjv2eF7juoSX70R9Atyab"><strong>5. CR Energy Index FAQ</strong></h2><div style="text-align:left" class="ace-line ace-line old-record-id-doxusiAJDj2u5gTaUsE65LxOcsf"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxus9zvJu7acKIwCgZ1Q5aupJP"><span style="font-size: 16px;">5.1 What is the CR Energy Index?</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxushm6eKx4s2WDzLcKV2I4S0S"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusd0EgXJSOkb4tngDjrhiYnc"><span style="font-size: 16px;">The CR Energy Index is a momentum indicator that compares upward and downward price pressure relative to the previous period's midpoint. It is designed to help traders assess market strength, potential extreme conditions, and changes in momentum.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxuswp88plkEMxuvWAjR88nqfb"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxusg2g3EaGKNGQVM0NbypMtOh"><span style="font-size: 16px;">5.2 How is CR calculated?</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusBc7Pa6hgwRAuDSXa17HDce"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusp97HmlUHyZ2S45r6uycisd"><span style="font-size: 16px;">CR adds upward and downward movement over a selected period, commonly 26 periods, then divides total upward movement by total downward movement and multiplies the result by 100. Each movement value is measured relative to the previous period's midpoint.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxuskEq5Rqlr7HBjSKFahj1z8b"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxuswvMg0X62L5fxSls7PVw4y8"><span style="font-size: 16px;">5.3 What unit does CR use?</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusnp2sVzRF3bD414H0kQ9Vbd"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxus4VLafn3IZc4qDB7PNCpF5f"><span style="font-size: 16px;">CR has no currency unit. It is a ratio-based value centered around 100, representing the relative balance between measured upward and downward pressure.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusOUTy9SI0Tb9gf9g7i7HnEb"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxuseFrXine2XLSWBr1XbduYmd"><span style="font-size: 16px;">5.4 What CR levels should beginners watch?</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxuszV4AQw3lDCySAvOm0iOzFb"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusjkDiEpjddL5EqUCx7eTLnd"><span style="font-size: 16px;">Traders often monitor 100 as the centerline, below 40 as a possible oversold zone, and 300–400 or higher as a possible overheated zone. These are reference levels, not universal trading rules. Their usefulness depends on the asset, timeframe, volatility, and market regime.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusy9crfiwOAPbBuPFdJG5clh"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxusj0VsCYjHKLHnKOiC8l0zDc"><span style="font-size: 16px;">5.5 Can CR predict market reversals?</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxus7vBupkIMhG8aTEgfnt2msb"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusdUTv9imfNPxo11R5kZYLZe"><span style="font-size: 16px;">No. CR may highlight changes in momentum, divergence, or moving-average convergence, but it cannot reliably predict the timing or direction of a reversal. Confirmation from price action and other indicators is still required.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxuszK4oNP3sqDKhUm6Mcr3Sgg"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxusLAmIVtYU4Vy3NMnAdAurAh"><span style="font-size: 16px;">5.6 How can beginners use the CR on MEXC?</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusWqHLuGnNzL9IDqpA2xFGJg"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusibUBaX7G8ch1FZcVNKBoTh"><span style="font-size: 16px;">Navigation: MEXC Website → Spot/<a data-lark-is-custom="true" href="https://www.mexc.com/futures/BTC_USDT">Futures</a> → Indicators → CR</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusoyzTyjybBht3kbmUTz4brd"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxusz2kGjqXQ5eBe6obvaIhpyg"><span style="font-size: 16px;">Recommended Reading:</span></h3><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-T2EJd5352odYb8xGFrbup6YSsld" data-list="bullet"><div><a data-lark-is-custom="true" href="https://www.mexc.com/zh-MY/support/article/how-to-use-the-directional-movement-index-dmi-in-trading-437460810149061632" style="font-size: 16px;">How to Use the Directional Movement Index (DMI) in Trading: A Complete Beginner's Guide</a></div></li><li class="ace-line ace-line old-record-id-RaTYdPJYMoHnIhxr81Duua9UsKe" data-list="bullet"><div><a href="https://www.mexc.com/zh-MY/support/article/how-to-use-the-commodity-channel-index-cci-in-trading-436075700375966720" data-lark-is-custom="true" style="font-size: 16px;">How to Use the Commodity Channel Index (CCI) in Trading: A Complete Beginner's Guide</a></div></li><li class="ace-line ace-line old-record-id-HCQEdvKKjo5f2YxNHGju6gVUsOe" data-list="bullet"><div><a href="https://www.mexc.com/zh-MY/support/article/how-to-use-the-brar-indicator-in-trading-436020492866343936" data-lark-is-custom="true" style="font-size: 16px;">How to Use the BRAR Indicator in Trading: A Complete Beginner's Guide</a></div></li><li class="ace-line ace-line old-record-id-SbuYd5MadoSJqXxYtLbupaVbspf" data-list="bullet"><div><a href="https://www.mexc.com/zh-MY/support/article/how-to-use-the-bias-ratio-bias-in-trading-432486920192694272" data-lark-is-custom="true" style="font-size: 16px;">How to Use the Bias Ratio (BIAS) in Trading: A Complete Beginner's Guide</a></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxusQtIYk6Wj24WMsxPRxLDJh1" data-list="bullet"><div><a href="https://www.mexc.com/zh-MY/support/article/how-to-use-the-stochastic-oscillator-in-trading-427169948248728576" data-lark-is-custom="true" style="font-size: 16px;">How to Use the Stochastic Oscillator in Trading: A Complete Beginner's Guide</a></div></li></ul><div style="text-align:left" class="ace-line ace-line old-record-id-doxusEmjnVm8j5Kgr8z8zINM1Rh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-AApXdQqqtoP2a5xS59Hux8ULsgh"><span style="font-size: 16px;"><strong>Risk Warning: </strong>Technical indicators are based on historical data and do not guarantee future performance. Digital assets are highly volatile. Trade cautiously based on your risk tolerance and avoid blindly following market trends.</span></div></div>
How to Use the Directional Movement Index (DMI) in Trading: A Complete Beginner's Guide
<div data-page-id="LZDrdp0hQoYEXoxFypiuwkAcsGg" data-lark-html-role="root" data-docx-has-block-data="true"><h2 class="heading-2 ace-line old-record-id-AbEddGKPpoonFNx7M9suK7FxsIf"><strong>Key Takeaways</strong></h2><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-XowqdvSIUo4RX1xIZdQuClios9c" data-list="bullet"><div><span style="font-size: 16px;">The Directional Movement Index (DMI) is a technical analysis tool used to identify market trend direction and measure trend strength.</span></div></li><li class="ace-line ace-line old-record-id-CU09djAkGot1LOxekmquDc8Yslf" data-list="bullet"><div><span style="font-size: 16px;">DMI consists of four lines: the Positive Directional Indicator (PDI), Negative Directional Indicator (MDI), Average Directional Index (ADX), and Average Directional Movement Index Rating (ADXR).</span></div></li><li class="ace-line ace-line old-record-id-WlqldnTdaoTikQxmcrfuKBSgsMf" data-list="bullet"><div><span style="font-size: 16px;">When PDI crosses above MDI and ADX is above 25, it is generally considered a bullish signal. Conversely, when MDI crosses above PDI and ADX is above 25, it may indicate a bearish signal.</span></div></li><li class="ace-line ace-line old-record-id-PcD9dXjUvon1B3x0ZAZudXADsqb" data-list="bullet"><div><span style="font-size: 16px;">ADXR is a smoothed version of ADX that helps confirm whether trend strength is sustainable and reduces the impact of short-term fluctuations and false signals.</span></div></li><li class="ace-line ace-line old-record-id-MxJhdOtPUoDmIExOp4quTw4rsnc" data-list="bullet"><div><span style="font-size: 16px;">Users can add DMI directly to charts on MEXC and use it alongside other technical indicators to support trading decisions.</span></div></li></ul><div class="ace-line ace-line old-record-id-Yur0dL43Ho1lswxK82luKO0IsFh"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-W55JdX7KKooIwBxf6a9uf4TvsNc"><strong>1. What Is the Directional Movement Index?</strong></h2><div class="ace-line ace-line old-record-id-Y6tud5eaIoiJysxvo3du8khxsec"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-KHA2daVMjojCyWxxDqjuu81gsrO"><span style="font-size: 16px;">The Directional Movement Index (DMI) is a technical analysis indicator developed by J. Welles Wilder in 1978. What distinguishes DMI from many other indicators is its ability to evaluate both the direction and strength of price movements. This helps traders distinguish established trends from range-bound or directionless markets.</span></div><div class="ace-line ace-line old-record-id-XLHPdE1fvotjqBxWpuaucR4Eshd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-XhykdNu4lozGkzxvLkauOifgsye"><span style="font-size: 16px;">Crypto markets can experience significant price volatility. When trading on <a data-lark-is-custom="true" href="https://www.mexc.com/">MEXC</a>, DMI can help users assess whether buyers or sellers currently dominate the market and whether the prevailing directional movement is strong enough to warrant further attention. This may help reduce unnecessary trades caused by frequent price fluctuations in sideways markets.</span></div><div class="ace-line ace-line old-record-id-Kx1ndJoDBoxOifx4QYvuOtqhs1b"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-ULE7dIMN5oUXomxCIDuuOTJ5sce"><strong>2. The Four Components of DMI</strong></h2><div class="ace-line ace-line old-record-id-D5rSdfvlOoEa19xQnYyuvNCKs0b"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-J20cdqS0povPZOx7gGjuEQZLsoh"><span style="font-size: 16px;"><strong>Positive Directional Indicator (PDI):</strong> Measures the strength of upward price movement over a given period. PDI generally rises as buying pressure strengthens.</span></div><div class="ace-line ace-line old-record-id-YRlrdgcc3oPNklxW5QSuL1pxsHe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Kfkod4jyzofMLex6fgwu04s0ssd"><span style="font-size: 16px;"><strong>Negative Directional Indicator (MDI):</strong> Measures the strength of downward price movement. MDI generally rises as selling pressure increases.</span></div><div class="ace-line ace-line old-record-id-F2Sudj823op7lhxKmaPuqKY4sog"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-RImWdZ1hdopF2ZxNBExuFhKEsWh"><span style="font-size: 16px;"><strong>Average Directional Index (ADX):</strong> Measures trend strength rather than trend direction. Whether prices are rising or falling, ADX generally increases when the prevailing trend becomes stronger.</span></div><div class="ace-line ace-line old-record-id-B4Pyd8tm9o3V3cxETlXuTv4Is1g"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-BCD3dBCr4oyBSgx5Z7Fufr32szc"><span style="font-size: 16px;"><strong>Average Directional Movement Index Rating (ADXR):</strong> A smoother version of ADX used to evaluate the persistence and stability of trend strength. It serves as an additional confirmation tool within the DMI system.</span></div><div class="ace-line ace-line old-record-id-Nhcmdsf5roiNETxhIsUuMU0Aswc"><span style="font-size: 16px;"><br></span></div><div style="text-align:center" data-type="image" data-ace-gallery-json="{"items":[{"uuid":"a4bb37d2-6b8a-4101-9e9c-db343485728e","height":1478,"width":2938,"currHeight":1478,"currWidth":2938,"natrualHeight":1478,"natrualWidth":2938,"pluginName":"imageUpload","scale":1,"src":"https%3A%2F%2Finternal-api-drive-stream.larksuite.com%2Fspace%2Fapi%2Fbox%2Fstream%2Fdownload%2Fpreview%2FSgD7bR2HxopuGOx6hTouQTEistb%2F%3Fpreview_type%3D16","file_token":"SgD7bR2HxopuGOx6hTouQTEistb","image_type":"image/png","size":330554,"comments":[]}]}" class="image-uploaded gallery old-record-id-O06Udlpozo7en4xqlGzu17sOs2y"><img src="https://mexc-rainbown-activityimages.s3.ap-northeast-1.amazonaws.com/banner/F20260813102514624fO0C32G6qzSSAR.png" data-single-block="true" data-snapshot="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" data-suite="eyJmaWxlVG9rZW4iOiJTZ0Q3YlIySHhvcHVHT3g2aFRvdVFURWlzdGIiLCJvYmpUeXBlIjoiZG9jeCIsIm9ialRva2VuIjoiTzA2VWRscG96bzdlbjR4cWxHenUxN3NPczJ5Iiwib3JpZ2luU3JjIjoiaHR0cHM6Ly9pbnRlcm5hbC1hcGktZHJpdmUtc3RyZWFtLmxhcmtzdWl0ZS5jb20vc3BhY2UvYXBpL2JveC9zdHJlYW0vZG93bmxvYWQvcHJldmlldy9TZ0Q3YlIySHhvcHVHT3g2aFRvdVFURWlzdGIvP3ByZXZpZXdfdHlwZT0xNiJ9" data-src="https://internal-api-drive-stream.larksuite.com/space/api/box/stream/download/all/SgD7bR2HxopuGOx6hTouQTEistb/?mount_node_token=O06Udlpozo7en4xqlGzu17sOs2y&mount_point=docx_image" data-width="2938" data-height="1478" data-lark-image-uri="drivetoken://SgD7bR2HxopuGOx6hTouQTEistb" data-lark-image-width="2938" data-lark-image-height="1478" data-host-from-cloud="true" style="max-width: 100%; height: auto; border-radius: 12px; font-size: 16px;"></div><div class="ace-line ace-line old-record-id-VrjzdomuYoRvYExESzNuoWBYsGh"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-Q5z2dXSdcopgsyxtaYOuAmvDsLb"><strong>3. How to Interpret DMI Signals</strong></h2><div class="ace-line ace-line old-record-id-Fmt7d5CeFo8uWixhxiOuZibxsTe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-ENKsdWSTMoFKCJxPKXju2tCmsmd"><span style="font-size: 16px;"><strong>Identifying Trend Direction: </strong>When PDI is above MDI, buying momentum is stronger than selling momentum, indicating a bullish market bias. When MDI is above PDI, selling momentum is stronger, indicating a bearish market bias.</span></div><div class="ace-line ace-line old-record-id-NxusdGEEEowczdxBZtvum24es4b"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-HoWadgfsLo7tWLxxBKouIglkswe"><strong style="font-size: 16px;">Measuring Trend Strength With ADX:</strong></div><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-RtGhdIgtXo2fDVxcP8wusaQMs8e" data-list="bullet"><div><span style="font-size: 16px;"><strong>Below 20:</strong> The trend is weak or the market is moving sideways, making trend-following strategies less suitable.</span></div></li><li class="ace-line ace-line old-record-id-L4GwdZmVUoH8xTxgUN6uZW15skh" data-list="bullet"><div><span style="font-size: 16px;"><strong>Between 20 and 40:</strong> A trend is developing and gradually strengthening.</span></div></li><li class="ace-line ace-line old-record-id-K91cd7MAvoCjfFxUMX0uTc96sQg" data-list="bullet"><div><span style="font-size: 16px;"><strong>Above 40:</strong> The trend is relatively strong, and traders may consider maintaining positions in the direction of the prevailing trend.</span></div></li><li class="ace-line ace-line old-record-id-Og7DdBYYfoFURyxfEsDuSdCBs4e" data-list="bullet"><div><span style="font-size: 16px;">ADX measures only trend strength, not direction. A rising ADX can therefore occur during either a strong uptrend or a strong downtrend.</span></div></li></ul><div class="ace-line ace-line old-record-id-H3uXdqz2aoxcTkxq7AtufgY8sab"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-PN9bdYvIhovmfgxWJvFuJEp8sSd"><strong>4. DMI Trading Strategies</strong></h2><div class="ace-line ace-line old-record-id-QkRKdiG0xoujFYxERTquVUywsbb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-ATjBdVT5qonehOxfX10u48Qtsyd"><span style="font-size: 16px;"><strong>Crossover Strategy: </strong>A PDI and MDI crossover is one of the most basic and commonly used DMI signals. When PDI crosses above MDI, it generates a potential buy signal. When MDI crosses above PDI, it generates a potential sell signal.</span></div><div class="ace-line ace-line old-record-id-PkI5d2Yr5oky0Ax2CJ7utA0FstU"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-J1UddH4IOodcuuxndp5uWP9Hs59"><span style="font-size: 16px;"><strong>ADX Filter Strategy: </strong>In sideways markets, crossover signals may produce frequent false signals. Traders may wait for ADX to rise above 25 and continue higher before acting on a crossover. If ADX is below 20, it may be better to wait for a clearer trend.</span></div><div class="ace-line ace-line old-record-id-OYzTdquqxoc0MOxWQROunvbDs6e"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-M30wdPFtxofF8axbGk1uadphskg"><span style="font-size: 16px;"><strong>Combined Confirmation Strategy: </strong>DMI can be combined with <a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-moving-average-indicators-in-trading-416905955663768576">moving averages</a> and <a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-the-relative-strength-index-rsi-in-trading-425570029981283328">RSI</a> for additional confirmation. For example, a PDI crossover above MDI may provide a stronger bullish signal when ADX is rising, price is above the moving average, and RSI is above 50 without being overbought.</span></div><div class="ace-line ace-line old-record-id-PC4AdFkQAoZvoUxxTGpuYIb9sSd"><span style="font-size: 16px;"><br></span></div><div style="text-align:center" data-type="image" data-ace-gallery-json="{"items":[{"uuid":"25effdb2-1f6e-4b0e-93bc-71553a9f59a6","height":1470,"width":2938,"currHeight":1470,"currWidth":2938,"natrualHeight":1470,"natrualWidth":2938,"pluginName":"imageUpload","scale":1,"src":"https%3A%2F%2Finternal-api-drive-stream.larksuite.com%2Fspace%2Fapi%2Fbox%2Fstream%2Fdownload%2Fpreview%2FThXUbLwa1oSexxxlk2hutqLosuh%2F%3Fpreview_type%3D16","file_token":"ThXUbLwa1oSexxxlk2hutqLosuh","image_type":"image/png","size":455133,"comments":[]}]}" class="image-uploaded gallery old-record-id-PRzZdXMH9oRBdRxwHJHu9aUfsqK"><img src="https://mexc-rainbown-activityimages.s3.ap-northeast-1.amazonaws.com/banner/F202608131025136020HwbaPaJfS7xUc.png" data-single-block="true" data-snapshot="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" data-suite="eyJmaWxlVG9rZW4iOiJUaFhVYkx3YTFvU2V4eHhsazJodXRxTG9zdWgiLCJvYmpUeXBlIjoiZG9jeCIsIm9ialRva2VuIjoiUFJ6WmRYTUg5b1JCZFJ4d0hKSHU5YVVmc3FLIiwib3JpZ2luU3JjIjoiaHR0cHM6Ly9pbnRlcm5hbC1hcGktZHJpdmUtc3RyZWFtLmxhcmtzdWl0ZS5jb20vc3BhY2UvYXBpL2JveC9zdHJlYW0vZG93bmxvYWQvcHJldmlldy9UaFhVYkx3YTFvU2V4eHhsazJodXRxTG9zdWgvP3ByZXZpZXdfdHlwZT0xNiJ9" data-src="https://internal-api-drive-stream.larksuite.com/space/api/box/stream/download/all/ThXUbLwa1oSexxxlk2hutqLosuh/?mount_node_token=PRzZdXMH9oRBdRxwHJHu9aUfsqK&mount_point=docx_image" data-width="2938" data-height="1470" data-lark-image-uri="drivetoken://ThXUbLwa1oSexxxlk2hutqLosuh" data-lark-image-width="2938" data-lark-image-height="1470" data-host-from-cloud="true" style="max-width: 100%; height: auto; border-radius: 12px; font-size: 16px;"></div><div class="ace-line ace-line old-record-id-LGlwdnrMHoAe5txJeq7ucZwPsdc"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-WYB6dmZojoBmfpx4jy9uzg02sDh"><strong>5. Limitations of DMI</strong></h2><div class="ace-line ace-line old-record-id-C6oHdy8tIohPMcxZH8YuyHxQsgh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-UUE4dZnNzoIV7uxfIMEumacpsyc"><span style="font-size: 16px;">As a trend-following indicator, DMI is calculated using historical price data and therefore has a certain degree of lag.</span></div><div class="ace-line ace-line old-record-id-Rk5TdFUkFoPkuDxfzDdulTsgsgc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-A64ud6Ulcog2oGxIPAiu45Uisfc"><span style="font-size: 16px;">In sideways markets, PDI and MDI may repeatedly cross each other, producing false signals. For this reason, DMI should generally be used together with other technical analysis tools and appropriate risk management measures, including stop-loss orders.</span></div><div class="ace-line ace-line old-record-id-MrI5d9rsKoiU2nx2kstuuuuSsEs"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-OrA6dYDfPoMHnJxiC1huyP5IsIc"><strong>6. DMI FAQ</strong></h2><div class="ace-line ace-line old-record-id-PtH5diR6GorZzMx7w0HuOAgIsph"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-Fw3BdFoRRoyADoxprWGuM09psjh"><strong style="font-size: 16px;">6.1 How to read DMI?</strong></h3><div class="ace-line ace-line old-record-id-Htkmd5WgxoHwVbxDln8uip1msI8"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-D6hpdLxfhopsaTxtuXmuLbnisDe"><span style="font-size: 16px;">Compare PDI and MDI to determine market direction. PDI above MDI indicates a bullish bias, while MDI above PDI indicates a bearish bias.</span></div><div class="ace-line ace-line old-record-id-SsAmdZJlwoPSPxxbqdpuKpnos3d"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-QHR7dFWmroFH9kx6svbuSZH2seg"><span style="font-size: 16px;">Then use ADX to confirm trend strength. An ADX reading above 25 is commonly considered an indication that a meaningful trend is present.</span></div><div class="ace-line ace-line old-record-id-U0KHdPKF1ovAgDxRpImu3e14sFe"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-EwiodrJdTo5phNxHKGfubQL2sBz"><strong style="font-size: 16px;">6.2 What is the best DMI setting?</strong></h3><div class="ace-line ace-line old-record-id-DR5UdaJu1oZ2wmxyHwaupjdBsxh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-T73EdJkAUolHm8xl6iFuNjPNs8f"><span style="font-size: 16px;">The default 14-period setting is the industry standard and is suitable for most trading scenarios.</span></div><div class="ace-line ace-line old-record-id-QlbWd6O4ao9AHoxp4iiujFMesCv"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-TG5EdOTe1oGWa9xpUT6u20HLsKb"><span style="font-size: 16px;">Short-term traders may shorten the period to make DMI more responsive to price changes. Swing traders can retain the default setting or use a longer period to obtain smoother signals.</span></div><div class="ace-line ace-line old-record-id-S4mpdtmJ7oWJyvxPjCQu9DKYssd"><span style="font-size: 16px;"><br></span></div><div style="text-align:center" data-type="image" data-ace-gallery-json="{"items":[{"uuid":"fc37f16c-b08d-4395-8986-37079806435e","height":1244,"width":2934,"currHeight":1244,"currWidth":2934,"natrualHeight":1244,"natrualWidth":2934,"pluginName":"imageUpload","scale":1,"src":"https%3A%2F%2Finternal-api-drive-stream.larksuite.com%2Fspace%2Fapi%2Fbox%2Fstream%2Fdownload%2Fpreview%2FDx8Jb8WDEoeTG5xhF9cuIxZts1e%2F%3Fpreview_type%3D16","file_token":"Dx8Jb8WDEoeTG5xhF9cuIxZts1e","image_type":"image/png","size":497859,"comments":[]}]}" class="image-uploaded gallery old-record-id-RV8cdpK5rofoJTxsgZMu0PkusCT"><img src="https://mexc-rainbown-activityimages.s3.ap-northeast-1.amazonaws.com/banner/F20260813102514651nXkMhNgUnsroKW.png" data-single-block="true" data-snapshot="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" data-suite="eyJmaWxlVG9rZW4iOiJEeDhKYjhXREVvZVRHNXhoRjljdUl4WnRzMWUiLCJvYmpUeXBlIjoiZG9jeCIsIm9ialRva2VuIjoiUlY4Y2RwSzVyb2ZvSlR4c2daTXUwUGt1c0NUIiwib3JpZ2luU3JjIjoiaHR0cHM6Ly9pbnRlcm5hbC1hcGktZHJpdmUtc3RyZWFtLmxhcmtzdWl0ZS5jb20vc3BhY2UvYXBpL2JveC9zdHJlYW0vZG93bmxvYWQvcHJldmlldy9EeDhKYjhXREVvZVRHNXhoRjljdUl4WnRzMWUvP3ByZXZpZXdfdHlwZT0xNiJ9" data-src="https://internal-api-drive-stream.larksuite.com/space/api/box/stream/download/all/Dx8Jb8WDEoeTG5xhF9cuIxZts1e/?mount_node_token=RV8cdpK5rofoJTxsgZMu0PkusCT&mount_point=docx_image" data-width="2934" data-height="1244" data-lark-image-uri="drivetoken://Dx8Jb8WDEoeTG5xhF9cuIxZts1e" data-lark-image-width="2934" data-lark-image-height="1244" data-host-from-cloud="true" style="max-width: 100%; height: auto; border-radius: 12px; font-size: 16px;"></div><div class="ace-line ace-line old-record-id-ZtwhdgRJ9oe3CoxChIcurHYxsib"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-UuW1dbhtOofmR9xngIluXCQ3shh"><strong style="font-size: 16px;">6.3 Is ADX suitable for day trading?</strong></h3><div class="ace-line ace-line old-record-id-Cfb6dakmxoExn1xGI2AuCrMssDf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-AReqdHhXnov0QNxKuPYuSmArsog"><span style="font-size: 16px;">Yes. However, shorter timeframes tend to generate more market noise, which can reduce signal accuracy. For day trading, ADX is best used as a filter, with crossover signals considered when ADX is above 25 and confirmed by price structure.</span></div><div class="ace-line ace-line old-record-id-T2xed00HQoslyLxYXseuyFfmsIb"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-BkfEdWgCboG2zPxtTcbu1fhcskP"><strong style="font-size: 16px;">6.4 What is the difference between DMI and ADX?</strong></h3><div class="ace-line ace-line old-record-id-O6tedlbLxomc7IxamLFuIdIQsgd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-QrhGd3QepoRTKZxONtMu5116sne"><span style="font-size: 16px;">ADX is a component of the DMI system rather than the complete indicator itself.</span></div><div class="ace-line ace-line old-record-id-KF1XdTiMeoiFXex239juUUcasWd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-OlRWdhlkboqxadx1YzQurzCNsJg"><span style="font-size: 16px;">The full DMI system consists of PDI, MDI, ADX, and ADXR. PDI and MDI are primarily used to assess direction, while ADX and ADXR are used to evaluate trend strength and its persistence.</span></div><div class="ace-line ace-line old-record-id-YdB5dVoKAoS3nmxSgyhufLocs6e"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-EL4EdXBQFourKixSytpuFgl1syO"><strong style="font-size: 16px;">6.5 How to use DMI on MEXC</strong></h3><div class="ace-line ace-line old-record-id-AX2OdhHMsoARk6xRnYNuwdFLsQc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-KdsvdCHjEo6s4oxiHS5ulO0gssd"><span style="font-size: 16px;">Go to MEXC official website→ <strong>Spot/</strong><strong><a data-lark-is-custom="true" href="https://www.mexc.com/futures/BTC_USDT">Futures</a></strong> → <strong>Indicators</strong> → <strong>DMI</strong></span></div><div class="ace-line ace-line old-record-id-Dxe1dZIzvoMN88xQvb7u50lbsRY"><span style="font-size: 16px;"><br></span></div><div style="text-align:center" data-type="image" data-ace-gallery-json="{"items":[{"uuid":"f16d21da-91c1-4ae1-a91e-2ae1f6f29508","height":1252,"width":2936,"currHeight":1252,"currWidth":2936,"natrualHeight":1252,"natrualWidth":2936,"pluginName":"imageUpload","scale":1,"src":"https%3A%2F%2Finternal-api-drive-stream.larksuite.com%2Fspace%2Fapi%2Fbox%2Fstream%2Fdownload%2Fpreview%2FEVmGbTCvcosVbkxC3yDuJCzdssd%2F%3Fpreview_type%3D16","file_token":"EVmGbTCvcosVbkxC3yDuJCzdssd","image_type":"image/png","size":512696,"comments":[]}]}" class="image-uploaded gallery old-record-id-Jn1tdafZHoZ8C7xVnoBubBwCsEh"><img src="https://mexc-rainbown-activityimages.s3.ap-northeast-1.amazonaws.com/banner/F20260813102513708RC2bBDXRSwvnht.png" data-single-block="true" data-snapshot="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" data-suite="eyJmaWxlVG9rZW4iOiJFVm1HYlRDdmNvc1Zia3hDM3lEdUpDemRzc2QiLCJvYmpUeXBlIjoiZG9jeCIsIm9ialRva2VuIjoiSm4xdGRhZlpIb1o4Qzd4Vm5vQnViQndDc0VoIiwib3JpZ2luU3JjIjoiaHR0cHM6Ly9pbnRlcm5hbC1hcGktZHJpdmUtc3RyZWFtLmxhcmtzdWl0ZS5jb20vc3BhY2UvYXBpL2JveC9zdHJlYW0vZG93bmxvYWQvcHJldmlldy9FVm1HYlRDdmNvc1Zia3hDM3lEdUpDemRzc2QvP3ByZXZpZXdfdHlwZT0xNiJ9" data-src="https://internal-api-drive-stream.larksuite.com/space/api/box/stream/download/all/EVmGbTCvcosVbkxC3yDuJCzdssd/?mount_node_token=Jn1tdafZHoZ8C7xVnoBubBwCsEh&mount_point=docx_image" data-width="2936" data-height="1252" data-lark-image-uri="drivetoken://EVmGbTCvcosVbkxC3yDuJCzdssd" data-lark-image-width="2936" data-lark-image-height="1252" data-host-from-cloud="true" style="max-width: 100%; height: auto; border-radius: 12px; font-size: 16px;"></div><div class="ace-line ace-line old-record-id-Nn6Ndg6dTo6Utex32S6uouUzsag"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-HwHldSRm8ooZ3bx2sovuoBAJsdc"><span style="font-size: 16px;">Recommended Reading:</span></h3><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-Ecmod57PVo3Wn7xnur0u2K3asid" data-list="bullet"><div><a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-the-commodity-channel-index-cci-in-trading-436075700375966720" style="font-size: 16px;">How to Use the Commodity Channel Index (CCI) in Trading: A Complete Beginner's Guide</a></div></li><li class="ace-line ace-line old-record-id-T1xxdyNn3o5SVGxUcCNuLnzdsZe" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-to-use-the-brar-indicator-in-trading-436020492866343936" data-lark-is-custom="true" style="font-size: 16px;">How to Use the BRAR Indicator in Trading: A Complete Beginner's Guide</a></div></li><li class="ace-line ace-line old-record-id-L9UTd7YTrofL5exzNohu5o91sqd" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-to-use-the-bias-ratio-bias-in-trading-432486920192694272" data-lark-is-custom="true" style="font-size: 16px;">How to Use the Bias Ratio (BIAS) in Trading: A Complete Beginner's Guide</a></div></li><li class="ace-line ace-line old-record-id-FaTPdijSgoGxJkxnL9HufpX7sIc" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-to-use-the-stochastic-oscillator-in-trading-427169948248728576" data-lark-is-custom="true" style="font-size: 16px;">How to Use the Stochastic Oscillator in Trading: A Complete Beginner's Guide</a></div></li><li class="ace-line ace-line old-record-id-NANUd2uWfoGi9RxEZkgu6C7wszg" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-to-use-the-macd-indicator-in-trading-426304203100942336" data-lark-is-custom="true" style="font-size: 16px;">How to Use the MACD Indicator in Trading: A Complete Beginner's Guide</a></div></li></ul><div class="ace-line ace-line old-record-id-Rf2Hdpj1PocljJxdx6suhLsHsBf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-BUvcd3pFUokKg3xuWWxudgCLs8g"><span style="font-size: 16px;"><strong>Risk Disclaimer</strong>:Technical indicators are calculated based on historical market data and are provided for reference only. They cannot guarantee future market movements. Digital asset markets are highly volatile and involve significant risk. Please make trading decisions carefully based on your own risk tolerance and avoid blindly following market signals.</span></div><div class="ace-line ace-line old-record-id-JKAtd1FKQo1nLAxEkpQuNvZgsyz"><span style="font-size: 16px;"><br></span></div></div>
How to Use the Commodity Channel Index (CCI) in Trading: A Complete Beginner's Guide
<div data-page-id="GvlndANmBo4jM3xYtIAuEgicsKg" data-lark-html-role="root" data-docx-has-block-data="true"><h2 class="heading-2 ace-line old-record-id-doxusAG1IujYUrPipOeT4JWlsFc"><strong>Key Takeaways</strong></h2><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-doxusxIKYesTGYJ2QkaWIziptIe" data-list="bullet"><div><span style="font-size: 16px;">The Commodity Channel Index (CCI) is an unbounded momentum oscillator that measures how far an asset's current price has moved from its historical average.</span></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxusKonLhWP7CAqWGPh0AARuWv" data-list="bullet"><div><span style="font-size: 16px;">Readings above +100 may indicate strong bullish momentum, while readings below -100 may indicate strong bearish momentum or oversold conditions.</span></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxuskrLLiAcpbHSIMVbo0WKiSc" data-list="bullet"><div><span style="font-size: 16px;">Common CCI settings use 14 or 20 periods, but the appropriate setting depends on the market, timeframe, and trading style.</span></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxusMlu0FQADAv3RmtZxa4TmIf" data-list="bullet"><div><span style="font-size: 16px;">Traders commonly use CCI to analyze overbought and oversold conditions, zero-line crossovers, and bullish or bearish divergence.</span></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxus9bXnvLtePYYWHmkJcgjVzh" data-list="bullet"><div><span style="font-size: 16px;">CCI is based on historical price data and should not be used alone. Traders should seek confirmation from price action, trend tools, volume, or other momentum indicators and apply appropriate risk controls.</span></div></li></ul><div style="text-align:left" class="ace-line ace-line old-record-id-doxusmF6TzTaAHfji3EvnUkzIfb"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-doxusOwYjfZEYH72WNMTmwa6WDe"><strong>1. What Is the Commodity Channel Index?</strong></h2><div style="text-align:left" class="ace-line ace-line old-record-id-doxusTDKnqLxTkRShg9nlZf4gVc"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusmIH7AionRDmm36BP828qMS"><span style="font-size: 16px;">The Commodity Channel Index (CCI) is a momentum oscillator first introduced by technical analyst Donald Lambert in 1980. It measures the difference between an asset's current price and its average price over a selected number of periods. In simple terms, CCI helps traders assess whether price has moved unusually far above or below its recent average.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusx14KR36zVnaJTkPzxI8sTd"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusJ3wWSqDS19McDtmsY9gPCb"><span style="font-size: 16px;">A high CCI reading means the current price is well above its historical average and may reflect strong upward momentum or an overbought market. A low reading means price is well below its average and may reflect a downtrend or oversold conditions. These readings describe current momentum; they do not guarantee the next price movement.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusYxbfHXsIRZr4OBhuqNcBcb"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusunJu0OmOqoRrtZ0dmY4tWb"><span style="font-size: 16px;">Unlike the <a data-lark-is-custom="true" href="https://www.mexc.com/zh-MY/support/article/how-to-use-the-relative-strength-index-rsi-in-trading-425570029981283328">Relative Strength Index (RSI)</a>, CCI has no fixed upper or lower boundary. Approximately 70% to 80% of CCI readings typically remain between -100 and +100, while around 20% to 30% move outside this range. Traders often watch these outer zones for potential momentum or reversal signals.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusQtksHcedTUNUzViyE1bmQh"><span style="font-size: 16px;"><br></span></div><div data-type="image" data-ace-gallery-json="{"items":[{"uuid":"18e6e866-2497-4268-bb4e-42c54e391e7f","height":513.123172,"width":1019.997212,"currHeight":513.123172,"currWidth":1019.997212,"natrualHeight":1478,"natrualWidth":2938,"pluginName":"imageUpload","scale":0.347174,"src":"https%3A%2F%2Finternal-api-drive-stream.larksuite.com%2Fspace%2Fapi%2Fbox%2Fstream%2Fdownload%2Fpreview%2FHU19bsB7soytmjxKxH0unc1esKg%2F%3Fpreview_type%3D16","file_token":"HU19bsB7soytmjxKxH0unc1esKg","image_type":"image/jpeg","size":1,"comments":[]}]}" class="image-uploaded gallery old-record-id-doxlg93yTNBJURDSbjg6hXLSrVe"><img src="https://mexc-rainbown-activityimages.s3.ap-northeast-1.amazonaws.com/banner/F20260811133740970piqLIZ7Cm34FVx.png" data-single-block="true" data-snapshot="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" data-suite="eyJmaWxlVG9rZW4iOiJIVTE5YnNCN3NveXRtanhLeEgwdW5jMWVzS2ciLCJvYmpUeXBlIjoiZG9jeCIsIm9ialRva2VuIjoiZG94bGc5M3lUTkJKVVJEU2JqZzZoWExTclZlIiwib3JpZ2luU3JjIjoiaHR0cHM6Ly9pbnRlcm5hbC1hcGktZHJpdmUtc3RyZWFtLmxhcmtzdWl0ZS5jb20vc3BhY2UvYXBpL2JveC9zdHJlYW0vZG93bmxvYWQvcHJldmlldy9IVTE5YnNCN3NveXRtanhLeEgwdW5jMWVzS2cvP3ByZXZpZXdfdHlwZT0xNiJ9" data-src="https://internal-api-drive-stream.larksuite.com/space/api/box/stream/download/all/HU19bsB7soytmjxKxH0unc1esKg/?mount_node_token=doxlg93yTNBJURDSbjg6hXLSrVe&mount_point=docx_image" data-width="2938" data-height="1478" data-lark-image-uri="drivetoken://HU19bsB7soytmjxKxH0unc1esKg" data-lark-image-width="2938" data-lark-image-height="1478" data-host-from-cloud="true" style="max-width: 100%; height: auto; border-radius: 12px; font-size: 16px;"></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxust2IswPmD4ydmtqCWVS9SUg"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-doxuspnBljZ9YeJTNKfuDsKoxwS"><strong>2. What Are the Best CCI Settings?</strong></h2><div style="text-align:left" class="ace-line ace-line old-record-id-doxusZVXqTCbRVkM4co6oOabOFd"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxus5mUuEtivydb1bOumlpWXOg"><span style="font-size: 16px;">There is no universally best CCI setting. The most common settings are 14 or 20 periods, but the choice affects how quickly the indicator responds to price changes.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusB3nvmZKFtEvE7KENQBqMad"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusAhs4X6ekqLIFTvtTzhOctb"><span style="font-size: 16px;"><strong>Shorter settings, such as fewer than 14 periods:</strong> CCI reacts more quickly, produces more frequent signals, and spends less time within the -100 to +100 range. This may suit short-term or scalping strategies, but it can also generate more market noise and false signals.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxushwkxiUDyGFxMhcfI1ZGasg"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusDrXAuzMYynnnC5Ca5mKGH7"><span style="font-size: 16px;"><strong>Longer settings, such as more than 20 periods:</strong> CCI becomes smoother and may produce more stable signals. This can be useful for medium- or longer-term trend analysis, although the indicator will respond more slowly to new price movements.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusvibJKBOdyd37E7WyE6WIGb"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxus6HnXXBtmUAkfa1CmELO4Cc"><span style="font-size: 16px;">In highly volatile cryptocurrency markets, some traders use wider reference levels, such as ±200, to identify more extreme readings. Beginners are advised to test different settings in a simulated environment before using them in live trading. The selected period and threshold should match the asset's volatility, the chart timeframe, and the trader's risk tolerance.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxus0wUmu0ieXn4QVJCfq6AU6c"><span style="font-size: 16px;"><br></span></div><div data-type="image" data-ace-gallery-json="{"items":[{"uuid":"387845c9-cadb-4647-a6e5-0c7e1cfa6a2b","height":489.12631,"width":1019.99882,"currHeight":489.12631,"currWidth":1019.99882,"natrualHeight":1406,"natrualWidth":2932,"pluginName":"imageUpload","scale":0.347885,"src":"https%3A%2F%2Finternal-api-drive-stream.larksuite.com%2Fspace%2Fapi%2Fbox%2Fstream%2Fdownload%2Fpreview%2FGoqzbsEONow8jSxIYJauf2qcsud%2F%3Fpreview_type%3D16","file_token":"GoqzbsEONow8jSxIYJauf2qcsud","image_type":"image/jpeg","size":1,"comments":[]}]}" class="image-uploaded gallery old-record-id-doxlg1SjjOuAG6eMdejFEVP1wrd"><img src="https://mexc-rainbown-activityimages.s3.ap-northeast-1.amazonaws.com/banner/F20260811133740334EBYjXWcMBL5Ooj.png" data-single-block="true" data-snapshot="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" data-suite="eyJmaWxlVG9rZW4iOiJHb3F6YnNFT05vdzhqU3hJWUphdWYycWNzdWQiLCJvYmpUeXBlIjoiZG9jeCIsIm9ialRva2VuIjoiZG94bGcxU2pqT3VBRzZlTWRlakZFVlAxd3JkIiwib3JpZ2luU3JjIjoiaHR0cHM6Ly9pbnRlcm5hbC1hcGktZHJpdmUtc3RyZWFtLmxhcmtzdWl0ZS5jb20vc3BhY2UvYXBpL2JveC9zdHJlYW0vZG93bmxvYWQvcHJldmlldy9Hb3F6YnNFT05vdzhqU3hJWUphdWYycWNzdWQvP3ByZXZpZXdfdHlwZT0xNiJ9" data-src="https://internal-api-drive-stream.larksuite.com/space/api/box/stream/download/all/GoqzbsEONow8jSxIYJauf2qcsud/?mount_node_token=doxlg1SjjOuAG6eMdejFEVP1wrd&mount_point=docx_image" data-width="2932" data-height="1406" data-lark-image-uri="drivetoken://GoqzbsEONow8jSxIYJauf2qcsud" data-lark-image-width="2932" data-lark-image-height="1406" data-host-from-cloud="true" style="max-width: 100%; height: auto; border-radius: 12px; font-size: 16px;"></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusIMZIom5DyOlVYDUcE84rcc"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-doxusdjpnBQgz290JOwUehsFlKb"><strong>3. How to Use CCI in Trading</strong></h2><div style="text-align:left" class="ace-line ace-line old-record-id-doxusqC2d847HNWTpgKpcRVXlCf"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxustOma359xHpDxrOokWh2O9B"><span style="font-size: 16px;">CCI can support several forms of market analysis, but each signal should be interpreted within the broader trend and confirmed with other evidence. The following three approaches are among the most common.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusuZwDNUNykEwyXGaQlzbhVb"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxusJmR0EYldxrsdkSQRl9NpEg"><span style="font-size: 16px;">3.1 Overbought and oversold signals</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxus87KVVqccj7v1kegJvBe5vd"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxus2luVKtSoB3kuGsWLxIpmHe"><span style="font-size: 16px;">When CCI crosses above +100, price is significantly above its recent average. This may indicate strengthening bullish momentum. When CCI crosses below -100, it may indicate strengthening bearish momentum or oversold conditions. Neither crossover should be treated as an automatic instruction to enter a trade.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxuscWiWhijxhv5TS1mz5saynf"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusMbwC3i4nVwHuI8bM53fSFg"><span style="font-size: 16px;">In short-term trading, a move below -100 followed by a recovery above -100 may provide a potential bullish setup. Similarly, when CCI rises above +100 and later falls back below it, traders may consider whether upward momentum is weakening. Price structure, volume, or a trend indicator can provide additional confirmation before an entry or exit.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusfdmO3Kb2Lbf9IGDnwdpjwl"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusaHgpBc5GxVzQ1tWRWPwHG7"><span style="font-size: 16px;">Because CCI is unbounded, it can remain at an elevated or depressed level during a strong trend. A market that appears overbought may continue rising, while an oversold market may continue falling. Traders should therefore avoid relying on the threshold alone and may use stop-loss orders or smaller position sizes to manage risk.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxushnN4xoUzLBW0bfFuLjNCVd"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxusaMOfuqw9WGQPSLD8IlYNhe"><span style="font-size: 16px;">3.2 Zero-line crossovers</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxus3ME7BzBqWr1hfEkjCfqsTm"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusylg9ACj3WnUyygHuyAwBxf"><span style="font-size: 16px;">CCI oscillates around a zero line, which represents the relationship between current price and its moving average. A crossover above zero may indicate that momentum has turned positive, while a crossover below zero may indicate that momentum has turned negative.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusrg72O924gDY6C4tw2cpWgb"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxus2TCQf9uvgZPo4rSXpKoTlb"><span style="font-size: 16px;">Zero-line crossovers can help traders identify the early stages of a potential trend, especially when they align with a breakout or a change in market structure. In a sideways market, however, CCI may cross the zero line repeatedly and generate false signals. Waiting for a candle close or confirming the move with trend and volume indicators may reduce premature entries.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusdntaFLV5xZAF9D345erUdg"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxuswCuSs4x7Es4wJjEWWaRU6f"><span style="font-size: 16px;">3.3 Bullish and bearish divergence</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxus5XZeephqjeb27Q2FCmdIQd"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusnirGB7k8G6ct2DHwa8Fwlg"><span style="font-size: 16px;">Divergence occurs when price and CCI move in different directions. If price reaches a new low while CCI forms a higher low, a bullish divergence may be developing. This can suggest that downward momentum is weakening and that an upward reversal may become possible.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusHoz4R7L9TCfcLDwdjsnWQh"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusDQuHZmdCmlIhSS352pwn9g"><span style="font-size: 16px;">If price reaches a new high while CCI forms a lower high, a bearish divergence may indicate weakening upward momentum and a possible downside reversal. Divergence can persist before price changes direction, so traders should wait for confirmation from price action, support or resistance, volume, or another momentum indicator. A divergence signal alone does not confirm that a reversal will occur.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusSPJDB1QN6kXjTY6aNHIGif"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-doxusbnmVXnZgniaeUppcJjYszh"><strong>4. CCI vs. RSI: What is the difference?</strong></h2><div style="text-align:left" class="ace-line ace-line old-record-id-doxusuRii99iW7AwxcSTG0p8Bic"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxus4WharLDC1HG6dzHL19b4tg"><span style="font-size: 16px;">CCI and RSI are both momentum oscillators, but they measure different aspects of price behavior. RSI is bounded between 0 and 100 and commonly uses 70 and 30 as overbought and oversold reference levels. CCI has no fixed range and commonly uses +100 and -100 as its main reference levels.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusJnXwiCkIiT2fTf4dhg4W1c"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusvnovco3JAtkxaH6C4btrig"><span style="font-size: 16px;">CCI measures how far the current price has moved from its recent average price, making it useful for identifying extreme deviations and changes in trend momentum. RSI measures the speed and magnitude of recent price changes and may provide more stable readings in range-bound markets.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusxBKvL03cU8l5G1YLlCFCBK"><span style="font-size: 16px;"><br></span></div><div><table class="ace-table" data-ace-table-col-widths="150;220;220" style="border:none;border-collapse:collapse;table-layout:fixed;width:500px;"><colgroup><col width="150"><col width="220"><col width="220"></colgroup><tbody><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-doxusKgaQA2rf3yrU2GGv5EWGjr"><strong style="font-size: 16px;">Feature</strong></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-doxuse0ZDd6V5DIFNTKpN9TBa3e"><strong style="font-size: 16px;">CCI</strong></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-doxusTP9r4UaftSSQvEzT9pJTHd"><strong style="font-size: 16px;">RSI</strong></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:left" class="ace-line ace-line old-record-id-doxusujAO95w9BfWmI11m9QhsPg"><span style="font-size: 16px;">Range</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:left" class="ace-line ace-line old-record-id-doxusHmnA893nSzkJvtjqVJG5b6"><span style="font-size: 16px;">Unbounded</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:left" class="ace-line ace-line old-record-id-doxusbWTszz47s7EEiFHvYC9nBb"><span style="font-size: 16px;">0 to 100</span></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:left" class="ace-line ace-line old-record-id-doxusibFc9KqPglMdJHbj9Yd9Ec"><span style="font-size: 16px;">Common Levels</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:left" class="ace-line ace-line old-record-id-doxuslTFo7gMicHKxXmfbJaaXDh"><span style="font-size: 16px;">+100 and -100</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:left" class="ace-line ace-line old-record-id-doxusb99IeWngma1FouUpCXc9wg"><span style="font-size: 16px;">70 and 30</span></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:left" class="ace-line ace-line old-record-id-doxus6ipq1ruGk8uc25XKCbIGMe"><span style="font-size: 16px;">Primary Focus</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:left" class="ace-line ace-line old-record-id-doxusnZEJRNkuMyItl2WCDcXaNh"><span style="font-size: 16px;">Price deviation from its average</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:left" class="ace-line ace-line old-record-id-doxusSDwfJQXF5AZBe7o6x328Tc"><span style="font-size: 16px;">Speed and magnitude of price changes</span></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:left" class="ace-line ace-line old-record-id-doxus5tqnE0UKrSM9jSSagRULxd"><span style="font-size: 16px;">Typical Use</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:left" class="ace-line ace-line old-record-id-doxusC39kTv7as4JUnCnUFn2FKb"><span style="font-size: 16px;">Trend strength and extreme price deviation</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:left" class="ace-line ace-line old-record-id-doxus5iPybvGLECDslPgCqt2cif"><span style="font-size: 16px;">Momentum analysis in trending or range-bound markets</span></div></td></tr></tbody></table></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusqqlYiJLSXwuD5RyfgGfFrg"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusLGLbIAzujGpwx1IX1ZUHhc"><span style="font-size: 16px;">Neither indicator is universally better. The appropriate choice depends on the market environment, timeframe, and trading strategy. Traders may also use CCI and RSI together to compare momentum signals, but agreement between two indicators still does not guarantee a successful trade.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusenubbDSelaOmftKJBgxiaf"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-doxusy8zCKzmIOmPhwh4SIWvjBb"><strong>5. Commodity Channel Index FAQ</strong></h2><div style="text-align:left" class="ace-line ace-line old-record-id-doxusx8B8FevE7KnYWsRTNZdVwe"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxus9NR8jo1dZymCFDUQDXbU4f"><span style="font-size: 16px;">5.1 What is the CCI indicator?</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusuU7h3MEsGtpqJDPWayXaZc"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxussNspC7XPVBXPIecVPe80oh"><span style="font-size: 16px;">CCI is a momentum oscillator that compares an asset's current price with its historical average. Traders use it to analyze unusually strong or weak price movements, overbought or oversold conditions, and potential changes in trend momentum.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxuspkX3H99Li7y48UeqVf98Vh"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxusJsxjjru3kwoWmy08jqg3vc"><span style="font-size: 16px;">5.2 What are the best CCI settings?</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxustdCVorguosnPj7uvQZaoHf"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusT9DqH4No9xDVbtV1i1l6vi"><span style="font-size: 16px;">There is no single best setting for every market. Common settings are 14 or 20 periods. Shorter settings respond faster but may generate more noise, while longer settings are smoother but more delayed. In highly volatile markets, some traders use ±200 reference levels, but any adjustment should be tested against the asset, timeframe, and trading style.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxus5tx96OWqrJiAyvxqx4fkVf"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxusepuJnSuBOBcSN6TF7JddVc"><span style="font-size: 16px;">5.3 How can I use CCI on MEXC?</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxus5O5XTsZNOm8jX35tPVg7Dc"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxus0a5onvU1y1bsiGiVPxCreb"><span style="font-size: 16px;"><strong>Navigation:</strong> MEXC website → Spot or <a data-lark-is-custom="true" href="https://www.mexc.com/zh-MY/futures/BTC_USDT">Futures</a> → Indicators → CCI</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusSTAM7IIOrVqZTDkcPZItvc"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxusNtavB3DL5JFDA70FfAVa15"><span style="font-size: 16px;">5.4 Is CCI better than RSI?</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusupvLAQWHFxyRPPxHROdbcs"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusDWWa3IPttqZtkU7NlxGCoe"><span style="font-size: 16px;">No indicator is universally better. CCI is unbounded and may respond more strongly to price deviations and trend acceleration. RSI has a fixed 0–100 range and may be easier to interpret in range-bound markets. The choice depends on the trader's timeframe, market conditions, and strategy.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusSJVUhbZFUUuK3Fwe87SBId"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxusQDCW4X0FwhK1yW2AtsgKRf"><span style="font-size: 16px;">5.5 Is CCI suitable for scalping?</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusC60LuEEWM3tpUoDB75Koac"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusvactm0f5MsPLCReLG7HWve"><span style="font-size: 16px;">CCI can be used in short-term strategies because shorter settings respond quickly to momentum changes. However, fast settings can produce frequent false signals. Scalpers should seek additional confirmation, define a stop-loss level, and only use an amount they can afford to lose.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusu074wgxQ1W9kc5WuIUZfhb"><span style="font-size: 16px;"><br></span></div><h3 style="text-align:left" class="heading-3 ace-line old-record-id-doxusra65MYqjgadMXA91JJuqVh"><span style="font-size: 16px;">5.6 Does a move above +100 always mean buy?</span></h3><div style="text-align:left" class="ace-line ace-line old-record-id-doxusXdhHTsMZexmzO1iXBUCgFf"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusS3QjvDqEY4Pf78gmOew3Ph"><span style="font-size: 16px;">No. A move above +100 may indicate strengthening bullish momentum or the beginning of an uptrend, but it can also occur when the market is already extended and vulnerable to a pullback. Traders should consider the broader trend, price structure, volume, and other indicators before entering a position.</span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxusCzOP1VFBt05E3r5OwAtVBg"><span style="font-size: 16px;"><br></span></div><h2 style="text-align:left" class="heading-2 ace-line old-record-id-doxus5IxyC3yimkYVQkHBU4F0rf"><span style="font-size: 16px;">Recommended Reading:</span></h2><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-CN7xdVTgOo2bEixLdhvutgEtsgg" data-list="bullet"><div><a data-lark-is-custom="true" href="https://www.mexc.com/support/article/how-to-use-the-brar-indicator-in-trading-436020492866343936" style="font-size: 16px;">How to Use the BRAR Indicator in Trading: A Beginner's Complete Guide</a></div></li><li class="ace-line ace-line old-record-id-OwmNdYBLxo2T04x35GfuoffysNe" data-list="bullet"><div><a href="https://www.mexc.com/zh-MY/support/article/how-to-use-the-bias-ratio-bias-in-trading-432486920192694272" data-lark-is-custom="true" style="font-size: 16px;">How to Use the Bias Ratio (BIAS) in Trading: A Complete Beginner's Guide</a></div></li><li class="ace-line ace-line old-record-id-UXdJdrxcGobHLPxyTxuuZYbls0d" data-list="bullet"><div><a href="https://www.mexc.com/zh-MY/support/article/how-to-use-the-stochastic-oscillator-in-trading-427169948248728576" data-lark-is-custom="true" style="font-size: 16px;">How to Use the Stochastic Oscillator in Trading: A Complete Beginner's Guide</a></div></li><li class="ace-line ace-line old-record-id-LYLodz6uco94H7xwUpruj2eRssh" data-list="bullet"><div><a href="https://www.mexc.com/zh-MY/support/article/how-to-use-the-exponential-moving-average-indicator-in-trading-416907527621799936" data-lark-is-custom="true" style="font-size: 16px;">How to Use the Exponential Moving Average Indicator in Trading: A Complete Beginner's Guide</a></div></li><li style="text-align:left" class="ace-line ace-line old-record-id-doxustz91KPPFVL6qZOkYttCvcf" data-list="bullet"><div><a href="https://www.mexc.com/zh-MY/support/article/how-to-use-the-parabolic-sar-indicator-in-trading-416910594228448256" data-lark-is-custom="true" style="font-size: 16px;">How to Use the Parabolic SAR Indicator in Trading: A Complete Beginner's Guide</a></div></li></ul><div class="ace-line ace-line old-record-id-Wbisd52LGoJgbmxwtffuIC0Tsbf"><span style="font-size: 16px;"><br></span></div><div style="text-align:left" class="ace-line ace-line old-record-id-doxus0T9ynFVPb3sxlByJ4aU5ae"><span style="font-size: 16px;"><strong>Risk Warning: </strong>Technical indicators are based on historical data and do not guarantee future performance. Digital assets are highly volatile. Trade cautiously based on your risk tolerance and avoid blindly following market trends.</span></div></div>