Module 2 · Lesson 5 of 8 · Charting · About 5 minutes
Adding Indicators and Reading Their Settings
On this page
Before you read: Technical Indicators Explained: MA, RSI, MACD, Bollinger, ATR
What you will learn
- How indicators are added as overlays on price or in separate panes.
- Why indicator inputs such as length and source change the result.
- What community scripts are and why to read their descriptions with care.
Where do indicators appear?
Why does a moving average sit on the candles while RSI sits underneath?
Indicators that share price’s scale, such as moving averages, VWAP and bands, are usually drawn as overlays on the price pane. Indicators on their own scale, such as RSI or MACD, usually get a separate pane. Volume may have its own pane or sit along the bottom of the price pane on a separate scale, depending on the platform. Most platforms add indicators from a searchable list and show their current values in a small legend. Some plans limit how many indicators can be shown at once, so check the platform’s current plan details.
Indicator diagram
Illustrative diagram constructed for teaching. Not real market data.
The diagram shows fictional candles, hollow green for up and filled red for down, with a moving average drawn on top, and a separate pane below showing the same oscillator with two different lengths, which cross their midlines at different times. All values are made up.
Why do settings matter?
Two charts show “RSI” with different readings. Who is wrong?
Neither may be wrong. Indicators have inputs: the length in bars, the price used (close, high, low or an average), the timeframe and, for some, smoothing methods. A 14-period RSI on closes differs from a 9-period RSI on a different source. Session settings change VWAP and anything built on volume. Writing the inputs in notes, or saving them in a template, keeps comparisons fair.
Try it on a chart
- Open Indicators in the top toolbar, search for RSI and add it.
- Open the RSI settings and read its inputs, such as the length.
Charts and quotes are TradingView's data, not ours, and may be delayed.
What about community scripts?
Is an indicator in a public library checked by anyone?
Some platforms let users publish their own indicators and strategies. These range from careful tools to untested ones, and names or descriptions can overstate what a script does. Scripts that show past “buy” or “sell” marks may repaint, changing earlier marks as new data arrives. Reading the description and, where shown, the code helps you understand what a script calculates. Back-tested results shown with a script are hypothetical and can be overfitted to past data.
What this does not tell you about indicators
- Which indicators or settings anyone should use.
- Whether any indicator or script predicts price.
- The exact plan limits or menu names on any platform.
- Nothing here suggests any trade.
Check yourself
- Why is a moving average usually an overlay while RSI has its own pane? Hint: scale.
- Name two inputs that change an indicator’s value. Hint: length, source.
- Why should past signal marks from a script be treated with care? Hint: repainting, hypothetical results.
Reflect on your own process
- Where does your plan record each indicator's length, source, timeframe and session so a later comparison is fair?
- What would you check in a community script's description and code before you let it into your written process?
- How do you mark in your journal that a script's backtest result was hypothetical rather than observed?