What is false signal?False Signal
An indicator gives a signal, but price doesn't move the way it suggested.
Learn “false signal” in an animated lesson
- Oscillators & MomentumCommodity Channel Index (CCI)
How far has price strayed from its average? CCI uses the mean deviation as its ruler, and a move above +100 is often seen as the start of strength.
- Oscillators & MomentumRelative Strength Index (RSI)
Compare the average gain and average loss over the last 14 candles and squeeze it into a 0–100 reading: what share of the force is pushing up.
- Oscillators & MomentumRSI in Trends: The Range Shifts
In uptrends RSI tends to swing between 40 and 80, in downtrends between 20 and 60. Identify the trend first, then decide where your overbought and oversold lines go.
- Oscillators & MomentumStochastic Oscillator (KD / KDJ)
Where does the close sit within the recent range? The K and D lines swing back and forth between 0 and 100.
- Oscillators & MomentumWilliams %R
The stochastic oscillator's mirror twin, just with the scale flipped: from 0 to −100.
- Indicators in Practice & BacktestingLag and False Signals
Every indicator based on past prices lags, and in a ranging market the signals will whipsaw you again and again.
- Trend IndicatorsExponential Moving Average (EMA)
An EMA gives more weight to recent prices, so it turns faster than an SMA.
- Trend IndicatorsMoving Average Crossovers: Golden and Death Crosses
A short-term average crossing above a long-term one is a golden cross; crossing below is a death cross. The most classic trend signal there is.
Related terms
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Go to “Commodity Channel Index (CCI)”