Module 4 · Understand indicator calculations
Understand indicator calculations — Trading Academy
Learn what moving averages, RSI and MACD measure before interpreting their thresholds or crossovers.
First lesson: Compare SMA and EMA. No sign-up required.
Lesson 1 of 3
Compare SMA and EMA
Not completed
By the end of this lesson
- Calculate a simple average from stated closes.
- Explain weighting, seed history and the limits of a crossover.
Suggested preparation: Describe swings without hindsight
Work it through
Calculate the three-close SMA for 100, 102 and 104. In the downloadable workbook, change one input and observe how the SMA and EMA respond differently.
Lesson 2 of 3
Interpret RSI with its assumptions
Not completed
By the end of this lesson
- Relate RSI to smoothed gains and losses.
- Separate a threshold observation from a reversal forecast.
Suggested preparation: Compare SMA and EMA
Work it through
Use average gain 1.5 and average loss 0.5 to calculate RSI. Write why the resulting value alone cannot decide the next price direction.
Lesson 3 of 3
Separate MACD from its histogram
Not completed
By the end of this lesson
- Calculate the difference between MACD and its signal line.
- Distinguish a zero-line cross from a signal-line cross.
Suggested preparation: Compare SMA and EMA, Interpret RSI with its assumptions
Work it through
Calculate the histogram when MACD is −0.0020 and its signal is −0.0030. Explain how a positive histogram can coexist with a negative MACD line.
Prepared by InsomniCapital. Checked 2 October 2026. Sources and detailed assumptions appear in each linked guide. Read the risk disclosure.