Technical Indicators

Status: Scaffolded - Content pending Last Updated: 2025-12-11

What This Means

Technical indicators are mathematical calculations based on price and volume. They help identify trends, momentum, and potential reversal points.

What We Get

Available Indicators

Indicator	What It Measures
RSI	Relative Strength Index - momentum (overbought/oversold)
SMA	Simple Moving Average - trend direction
EMA	Exponential Moving Average - recent trend emphasis
MACD	Moving Average Convergence Divergence - trend momentum

Indicators by Trade Style

Not all indicators are used for all trade styles:

Indicator	SCALP	DAY	SWING	INVESTMENT
RSI (9)	✅	❌	❌	❌
RSI (14)	❌	✅	✅	✅
SMA 20	❌	✅	❌	❌
SMA 50	❌	✅	✅	✅
SMA 100	❌	✅	✅	✅
SMA 200	❌	✅	✅	✅
EMA 9	✅	✅	✅	✅
EMA 20	❌	✅	✅	✅
MACD	✅	✅	✅	✅

Why no SMA for scalps? Moving averages lag too much for minute-by-minute trades.

Futures (Price Action + Volume)

For futures trades, the Technical Agent focuses on:

• Price action (support/resistance from bar highs/lows)
• Volume patterns
• Trend identification from sequential bars

How Indicators Are Retrieved

Key Point: Pre-Calculated from API

We do NOT calculate indicators locally from raw price bars.

Instead:

1. We request indicators pre-calculated from our market data provider API
2. We fetch only the current value (limit=1)
3. The API does all the math based on specified windows (RSI 14, SMA 200, etc.)

Why This Matters:

• Indicators like SMA 200 need 200+ bars of history
• The API handles this calculation using ALL available data
• We don't need to pull 200 bars locally just for one indicator value
• Keeps our requests efficient and token-friendly

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How Indicators Are Used

Important: AI Interprets, Code Doesn't

The algorithm does NOT have hard-coded rules like "RSI > 70 = overbought."

Instead:

1. The API returns indicator values (e.g., RSI: 72)
2. The code formats these values into the prompt
3. The AI agent interprets what those values mean in context
4. The AI uses its training + Mike's methodology to decide

Example: The AI receives RSI: 72 and decides based on context whether that's:

• Overbought (potential reversal)
• Strong momentum (trend continuation)
• Irrelevant (if other factors dominate)

This makes the system adaptive rather than mechanical.

Volatility Assessment

The Technical Agent also assesses volatility:

Condition	Definition
Volatile Day	Intraday range > 25% above 30-day ATR
Normal Day	Intraday range within 25% of ATR
Low Volatility	Intraday range below 30-day ATR

Impact: Wider stops/targets for high volatility, tighter for low.

Volume Confirmation

Condition	Definition
Volume Spike	Current bar > 25% above average
Strong Volume Day	Today's volume > 25% above 30-day average

Impact: Price moves WITH volume = higher conviction.

Implementation details are intentionally omitted from public documentation.