Indicators: MA, RSI, MACD, Bollinger

All four indicators read the same history of closing prices, but each one slices that history at a different length and adds it up a different way. A moving average takes one window, say the last twenty closes, and reports the middle of them. Bollinger bands take that same middle and add a measure of how far the closes strayed from it. RSI sorts the recent closes into up moves and down moves and compares the totals. MACD takes two averages of different lengths and reports the gap between them. Four sums, one price record.

The length you choose changes what the line can notice. A short window forgets yesterday quickly and swings hard. A long window holds old prices for weeks and barely flinches at a single busy afternoon. Two readers can put the same indicator on the same chart and see different lines, because one chose twenty and the other chose two hundred. That is not a setting to get right. It is a choice about how much history you want the line to remember.

This is why the four lines sometimes cross each other and sometimes sit on top of each other for days. When USD/ZAR drifts sideways, every average of it lands in much the same place, so the lines bunch. When it trends, the short sums pull away from the long ones and the lines fan out. The fanning is not a signal arriving. It is the arithmetic reporting that recent closes differ from older ones, which you could see on the candles without any indicator at all.

A moving average can react to the general level of prices and to a change in that level. It cannot react to the order in which the closes arrived, because addition does not care about order. Two days up then two days down gives the same average as two down then two up. If the shape of the path matters to your question, this line will not answer it.

RSI can react to whether recent closes were mostly higher or mostly lower than the one before. It cannot react to the size of the whole move, because it works on the ratio of gains to losses, not the rand distance. A quiet week and a violent week can produce the same reading. It also cannot see price gaps, since a gap is one close compared with the previous close, nothing more.

MACD can react to a change in the relationship between a fast average and a slow one. It cannot react to price itself, only to the gap between two sums of price. Bollinger bands can react to how spread out the closes were, which the other three ignore. They cannot react to direction, because a band widens whether the market is racing up or racing down. Each line is blind to something the others can see, and none of them can see the future.

Write your question down before you open the chart. If the question is whether the recent move is large compared with recent noise, Bollinger bands answer it, because their width is built from that noise. If the question is whether recent closes leaned upward or downward, RSI answers it. If the question is whether a fast sum has separated from a slow sum, MACD answers it. If the question is simply where the middle of the last stretch sits, a moving average answers it.

One line, one question. Adding a second line that measures the same thing in different words does not add evidence, it adds a second reason to feel certain about the same fact. That feeling of certainty is the risk, not the line. When two averages of the same prices agree, you have confirmed nothing new.

Then price the move in rand. On USD/ZAR at 18.4100, a 0.0100 move is 100 pips, and at R0.10 per pip on 0.10 lots that is R10 gross. Your broker sets the pip value, the spread and any commission, and these vary between brokers, so the R10 is a worked figure rather than what you would receive. No indicator changes that subtraction. The line tells you what happened in the past. The rand tells you what the position costs you now.