Viewing Indicators

Indicators

You asked, and we listened.  We're excited to finally release indicators for Robinhood Web!  Indicators offer more ways to visualize and understand what's happening in the market, and are the basis for many different technical trading strategies.

How to add an indicator:

  1. Go to any stock or cryptocurrency page
  2. Click the expand button (expand.png) on the bottom right of the chart
  3. A larger chart should open. You can add indicators here. 

How to adjust an indicator’s settings:

  1. Once an indicator has been added to the chart, you can adjust its settings. Find the pill for the indicator you want to change. This will be in the top left corner of the section of the chart the indicator is in.
  2. Click the settings button (settings.png) for the indicator you want to change. You can tweak any of the parameters in the popup that appears.

How to remove an indicator from the chart:

  1. To remove an indicator that you’ve added to the chart, find the pill for the indicator you want to remove. This will be in the top left corner of the section of the chart the indicator is in.
  2. Click the remove button (close.png) for the indicator you want to remove.

Which indicators does Robinhood offer?

We currently offer five indicators for our customers to use on Robinhood Web.

  • Volume
  • Moving Average (MA)
  • Exponential Moving Average (EMA)
  • Relative Strength Index (RSI)
  • Moving Average Convergence Divergence (MACD)

What does each indicator show?

Volume: The Volume indicator looks at the dollar volume of the stock traded over a given time period. The taller the bar, the higher this dollar volume traded.  The color of the bar is dependent on whether the stock’s price moved up (green) or down (red) over the period.

Moving Average (MA): Moving Average (MA) shows a line based on the moving average of the closing prices over a given time period.  For instance, the first point on a 20 day moving average would show the average of all closing prices from the past 20 days.  The next point would average the same days except the earliest, which it would drop in order to include the most recent day.

MA is often used to track price trends over time, and analysts compare MAs for different time periods to see whether or not they should expect further increases or decreases in the price of a security.

Exponential Moving Average (EMA): The Exponential Moving Average (EMA) is very similar to the Moving Average (MA) in that it's looking at an average value of the closing price of a stock over a moving window of time.  However, the EMA places more weight on recent data points than the MA does, and so it reacts faster to sudden swings in price. For EMA, we use a simple average of the first length as the value of the first point on the line.  The number of points we use to calculate EMA will be determined by the number of indicators that you've got on the screen.

Just like the MA, EMA is often used to track price trends over time, and analysts compare EMAs for different time periods to see whether or not they should expect further increases or decreases in the price of a security.  The EMA is considered a more sensitive, reactive measure though, and is often preferred over the MA.

Relative Strength Index (RSI): The Relative Strength Index indicator is a line whose value moves between 0 to 100 and tries to indicate whether a stock is under- or overvalued based on the magnitude of recent changes in the price of the stock. Values below 30 are thought to indicate that a stock is undervalued (i.e. oversold). Values above 70 are thought to indicate that a stock is overvalued (i.e. overbought).

If you’d like, you can access Wilder's Relative Strength Indicator (RSI) in the indicator settings for RSI. Wilder’s Relative Strength Index is similar to the normal Relative Strength Indicator, but it uses a modified smoothing algorithm — a variant on an exponential moving average instead of a moving average. To compare, the default RSI uses a simple moving average of the average gains and losses, while Wilder's RSI uses an exponential moving average.

Moving Average Convergence Divergence (MACD): The Moving Average Convergence Divergence (MACD) line shows the difference between two exponential moving averages - one long term, and one short term.  This difference is then plotted against another line showing the nine day estimated moving average, which is known as the "signal line." Some technical traders believe that if the MACD line crosses above the signal line, it's a signal to consider if it’s right to buy a security, whereas if it crosses below the MACD line, it's a signal to consider if it’s right to sell.

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