The RSI (Relative Strength Index) measures the speed and magnitude of recent price changes on a 0–100 scale and flags overbought/oversold zones. The MACD (Moving Average Convergence Divergence) compares two exponential moving averages and captures momentum change in price units. RSI = range oscillator for extremes, MACD = trend-momentum indicator for directional shifts.
| Criterion | RSI | MACD |
|---|---|---|
| Scale | 0–100 (bounded) | Unbounded (price units) |
| Default parameter | 14 periods | 12/26 EMA + 9 signal |
| Signal source | Levels (70/30) + divergences | Line crossovers + histogram |
| Strong in | Ranging markets (mean-reversion) | Trending markets (momentum continuation) |
| Weak in | Strong trends (stays overbought long) | Ranging phases (many false signals) |
| Lag | Low to medium | Medium to high (double-smoothed) |
When a market ranges and extremes should be identified relative to its own movement or when divergences serve as an early-warning signal.
When trend direction and strength should be confirmed, especially in trend-continuation setups on medium to high timeframes.
Educational content, not investment or tax advice. Neutrally contrasted, not a recommendation of either approach. Trading leveraged products carries risk of total loss.