1. Candlestick Charts
A candlestick chart is the most common way to view price data. Each candle represents a period of time (e.g. 4 hours, 1 day) and shows four prices:
- Open — the price at the start of the period
- Close — the price at the end of the period
- High — the highest price during the period
- Low — the lowest price during the period
Red candle = price went DOWN (close < open)
| ← High (wick/shadow)
███ ← Body (open to close)
███
| ← Low (wick/shadow)
The body shows the range between open and close. The wicks (thin lines above and below) show the high and low. A long wick indicates the price was pushed back — this is called rejection and can signal a reversal.
Key Candlestick Patterns
| Pattern | What It Looks Like | What It Means |
|---|---|---|
| Hammer | Small body at top, long lower wick | Buyers stepped in — potential reversal up |
| Shooting Star | Small body at bottom, long upper wick | Sellers pushed back — potential reversal down |
| Doji | Very small body, wicks both sides | Indecision — trend may be weakening |
| Engulfing | Large candle completely covers previous | Strong momentum shift in that direction |
| Morning Star | Down candle → small candle → up candle | Reversal from downtrend to uptrend |
2. Support & Resistance
Support is a price level where buying pressure tends to stop the price from falling further. Think of it as a floor. Resistance is a price level where selling pressure tends to stop the price from rising. Think of it as a ceiling.
These levels form because traders remember where price reversed before and place orders around those areas. The more times a level is tested (price touches it and bounces), the stronger it becomes.
Key concept: When support breaks, it often becomes resistance (and vice versa). This is called a flip — a critical concept in technical analysis.
3. Trend Lines & Channel Lines
Trend Lines
A trend line is a straight line drawn across two or more price points. It's one of the simplest but most powerful tools in technical analysis.
- Uptrend line — drawn along the lows (connects higher lows). Acts as dynamic support. As long as price stays above it, the uptrend is intact.
- Downtrend line — drawn along the highs (connects lower highs). Acts as dynamic resistance. As long as price stays below it, the downtrend is intact.
/
/ price bounces
/ off the line
/ each time
/
Downtrend line (resistance):
\
\ price rejected
\ at the line
\ each time
\
A trend line needs at least two touches to be valid. Three or more touches makes it significantly stronger. When a trend line breaks, it often signals a trend reversal.
Channel Lines
A channel is formed by drawing two parallel trend lines — one along the highs and one along the lows. Price bounces between the two lines like a ball between walls.
- Ascending channel — both lines slope upward. Buy near the lower line, take profit near the upper line.
- Descending channel — both lines slope downward. Sell/short near the upper line, cover near the lower line.
- Horizontal channel (range) — price moves sideways between flat support and resistance. Buy the bottom, sell the top.
| Signal | Meaning |
|---|---|
| Price touches lower channel line in uptrend | Buy opportunity — support within the trend |
| Price touches upper channel line | Take profit zone — resistance within the trend |
| Price breaks below the channel | Trend may be reversing — exit longs |
| Price breaks above the channel | Acceleration — trend is strengthening |
Channel breakouts: When price breaks out of a channel, the width of the channel gives you a price target. Measure the channel height and project it from the breakout point.
4. Moving Averages — SMA vs EMA
Simple Moving Average (SMA)
An SMA calculates the average closing price over a set number of periods, giving equal weight to every candle. A 50-period SMA adds up the last 50 closes and divides by 50.
- SMA 50 — the intermediate-term trend. Widely watched by institutional traders.
- SMA 100 — medium-term trend filter.
- SMA 200 — the most important moving average in finance. Price above = bull market; below = bear market. The "Golden Cross" (SMA 50 crossing above SMA 200) and "Death Cross" (SMA 50 crossing below SMA 200) are major signals.
EMA vs SMA — When to Use Which
| Feature | SMA | EMA |
|---|---|---|
| Weighting | Equal weight to all periods | More weight to recent prices |
| Responsiveness | Slower, smoother | Faster, more reactive |
| Best for | Identifying major trends, long-term levels | Catching trend changes early, short-term signals |
| False signals | Fewer (filters out noise) | More (reacts to every wiggle) |
| Common periods | 50, 100, 200 | 9, 21, 55, 200 |
Satis Omnibus uses EMAs (9, 21, 55, 200) for signal generation because the faster response catches trend shifts earlier. But many traders overlay the SMA 50 and SMA 200 on their charts for confirmation — these levels act as magnets where price often reacts.
5. Exponential Moving Averages in Satis Omnibus
Exponential Moving Average
An EMA smooths out price data to show the overall trend direction. Unlike a Simple Moving Average (SMA), the EMA gives more weight to recent prices, making it more responsive to new information.
Satis Omnibus uses four EMAs:
- EMA 9 (fast) — reacts quickly, tracks short-term momentum
- EMA 21 (medium) — the primary trend guide
- EMA 55 (slow) — intermediate trend direction
- EMA 200 (major) — the long-term trend. Price above = bullish; below = bearish
Price below all EMAs = strong downtrend
EMA 9 crosses above EMA 21 = bullish crossover (buy signal)
EMA 9 crosses below EMA 21 = bearish crossover (sell signal)
| Condition | Meaning |
|---|---|
| EMA 9 > EMA 21 > EMA 55 | EMAs stacked bullish — strong uptrend |
| EMA 9 < EMA 21 < EMA 55 | EMAs stacked bearish — strong downtrend |
| Price pulls back to EMA 21 in an uptrend | Potential buy-the-dip opportunity |
| Price far above EMA 21 | Overextended — may pull back before continuing |
6. RSI — Relative Strength Index
RSI (14-period)
RSI measures the speed and magnitude of recent price changes on a scale of 0 to 100. It tells you whether an asset is being bought aggressively (overbought) or sold aggressively (oversold).
70 ┤ - - - OVERBOUGHT ZONE - - -
│ Price may be stretched too high
50 ┤ ─── Neutral midline ───
│ Price may be stretched too low
30 ┤ - - - OVERSOLD ZONE - - - -
0 ┴─────────────────────────────────
| RSI Value | Interpretation |
|---|---|
| Above 70 | Overbought — price may be due for a pullback |
| 50 to 70 | Bullish momentum — uptrend is healthy |
| 30 to 50 | Bearish momentum — downtrend or consolidation |
| Below 30 | Oversold — price may be due for a bounce |
Divergence: If the price makes a new low but RSI makes a higher low, that's bullish divergence — a powerful reversal signal. The opposite (price makes a new high, RSI makes a lower high) is bearish divergence.
7. MACD — Trend Momentum
Moving Average Convergence Divergence
MACD measures the relationship between two EMAs (12 and 26 period). It consists of three components:
- MACD Line — the difference between EMA 12 and EMA 26
- Signal Line — a 9-period EMA of the MACD line
- Histogram — the difference between the MACD line and signal line (the bars you see)
Histogram bars shrinking ███ = momentum fading
Histogram crosses from red to green = bullish shift
Histogram crosses from green to red = bearish shift
| Signal | Meaning |
|---|---|
| MACD crosses above signal line | Bullish crossover — momentum turning up |
| MACD crosses below signal line | Bearish crossover — momentum turning down |
| Histogram positive and growing | Strong bullish momentum |
| Histogram negative and growing | Strong bearish momentum |
8. Slow Stochastic Oscillator
Slow Stochastic (14, 3, 3)
The Slow Stochastic measures where the current close sits relative to the high-low range over a set period (usually 14). It produces two lines: %K (smoothed) and %D (signal line, a 3-period average of %K).
Unlike Stochastic RSI (which applies the formula to RSI), the Slow Stochastic works directly on price. This makes it less sensitive but more reliable — fewer false signals, especially in trending markets.
80 ┤ - - OVERBOUGHT (above 80) - -
│
50 ┤ ─── Midline ───
│
20 ┤ - - OVERSOLD (below 20) - - -
0 ┴─────────────────────────────────
| Signal | Meaning |
|---|---|
| %K crosses above %D below 20 | Buy signal — momentum turning up from oversold |
| %K crosses below %D above 80 | Sell signal — momentum turning down from overbought |
| Both lines rising from below 20 | Building bullish momentum |
| Both lines falling from above 80 | Building bearish momentum |
| Price makes new low, Stochastic makes higher low | Bullish divergence — reversal likely |
Slow vs Fast Stochastic: The "Fast" Stochastic is very choppy and generates many false signals. The "Slow" version smooths %K with a 3-period average, filtering out noise. Most traders use the Slow version exclusively.
9. Stochastic RSI
Stoch RSI (%K and %D)
Stochastic RSI applies the Stochastic oscillator formula to RSI values instead of price. This makes it more sensitive than regular RSI and better at catching turning points early.
It oscillates between 0 and 100 with two lines: %K (fast) and %D (slow, smoothed).
| Condition | Meaning |
|---|---|
| Both lines below 20 | Oversold — watch for %K crossing above %D for a buy |
| Both lines above 80 | Overbought — watch for %K crossing below %D for a sell |
| %K crosses above %D below 20 | Strong buy signal from oversold |
| %K crosses below %D above 80 | Strong sell signal from overbought |
Satis Omnibus tip: The strategy requires Stochastic RSI to be in oversold territory (%K below 25) before generating a BUY signal. This ensures you're buying weakness, not chasing strength.
10. TDI — Traders Dynamic Index
Traders Dynamic Index
TDI is an all-in-one indicator that combines RSI, moving averages of RSI, and Bollinger Bands of RSI into a single view. It gives you trend direction, momentum, and volatility in one pane — making it extremely powerful for confirming entries and exits.
TDI has five components:
- Green line (RSI Price Line) — a smoothed RSI (typically 2-period SMA of RSI 13). This is your fast signal line.
- Red line (Trade Signal Line) — a slower SMA of RSI (typically 7-period). This is your trigger line.
- Yellow line (Market Base Line) — the middle Bollinger Band of RSI (34-period SMA of RSI). Shows the overall market sentiment.
- Upper blue band — upper Bollinger Band of RSI. Overbought when green line reaches here.
- Lower blue band — lower Bollinger Band of RSI. Oversold when green line reaches here.
── Yellow (Market Base) ── ← 50 = neutral
── Lower Volatility Band ── ← Oversold zone
Green crosses above Red = BUY
Green crosses below Red = SELL
| Signal | Meaning |
|---|---|
| Green crosses above Red | Buy signal — momentum shifting bullish |
| Green crosses below Red | Sell signal — momentum shifting bearish |
| Both lines above Yellow (50) | Bullish market — look for longs only |
| Both lines below Yellow (50) | Bearish market — look for shorts only |
| Green hits upper blue band | Overbought — momentum may exhaust |
| Green hits lower blue band | Oversold — look for reversal entries |
| Bands narrowing (squeeze) | Low volatility — big move incoming |
| Bands widening | High volatility — trend is active |
Why TDI is powerful: Because it's built on RSI, it filters out price noise. The green/red crossover gives you entries, the yellow line tells you the trend, and the Bollinger Bands tell you if the move is stretched. One indicator, three layers of information.
Best TDI setup: Wait for the green line to pull back to the yellow (50) line during a trend, then cross back above red. This is the TDI equivalent of a "buy the dip" — you're entering on a momentum reset within an established trend.
11. Bollinger Bands
Bollinger Bands (20, 2)
Bollinger Bands wrap around the price with three lines: a middle band (20-period SMA) and upper/lower bands set 2 standard deviations away. They expand when volatility increases and contract when it decreases.
Most price action stays
─── Middle Band ── ← 20-period average
between the bands
─── Lower Band ─── ← Price here = stretched low
| Condition | Meaning |
|---|---|
| Price touches lower band | Potentially oversold — look for confirmation to buy |
| Price touches upper band | Potentially overbought — look for confirmation to sell |
| Bands squeezing (narrow) | Low volatility — a big move is coming (direction unknown) |
| Bands expanding (wide) | High volatility — trend is strong, trade with it |
Bollinger Bounce: In the Satis Omnibus DIP strategy, a buy signal requires price to be near or below the lower Bollinger Band. This confirms the asset is at a statistically low point relative to recent price action.
12. Gaussian Channel
Gaussian Channel Filter
The Gaussian Channel uses a mathematically smoothed average (Gaussian filter) to create a channel around price. It's less noisy than Bollinger Bands and excellent at identifying the overall trend direction.
| Condition | Meaning |
|---|---|
| Price above the channel | Bullish — strong upward momentum |
| Price inside the channel | Neutral — trend is transitioning or consolidating |
| Price below the channel | Bearish — strong downward momentum |
| Channel turning up (green) | Trend shifting bullish |
| Channel turning down (red) | Trend shifting bearish |
Satis Omnibus tip: The Gaussian Channel being bullish (green) is one of the 6 core conditions required for a STRICT buy signal. It acts as a trend filter to avoid buying in downtrends.
13. Fibonacci Retracement
Fibonacci Levels
Fibonacci retracement levels are horizontal lines that indicate where support and resistance are likely to occur. They're based on Fibonacci ratios (23.6%, 38.2%, 50%, 61.8%, 78.6%) drawn between a swing high and swing low.
────── 23.6% (shallow pullback)
────── 38.2% (moderate pullback)
────── 50.0% (key level)
────── 61.8% (golden ratio — strongest)
────── 78.6% (deep pullback)
Swing Low ────────── 100%
The 61.8% level (the "golden ratio") is the most important. In an uptrend, a pullback to 61.8% that holds is often a strong buy opportunity. If it breaks below 78.6%, the trend may be reversing.
DIP mode: The Satis Omnibus DIP strategy looks for price pulling back to Fibonacci support levels (50%-61.8%) within an intact uptrend. This gives you a better entry price than buying at the top.
14. Fibonacci Extensions
Fibonacci Extension Levels
While Fibonacci retracements help you find where a pullback might end, Fibonacci extensions help you find where the next move might go. They project price targets beyond the current swing.
Extensions are drawn using three points: a swing low, a swing high, and the retracement low. The key extension levels are:
────── 261.8% Extended target (rare but powerful)
────── 200.0% Major extension target
────── 161.8% The golden extension (most reliable)
────── 127.2% First extension target
────── 100.0% Swing high (the breakout point)
...
────── 0.0% Swing low
| Level | How to Use It |
|---|---|
| 127.2% | First take-profit target — conservative. Good for partial profit. |
| 161.8% | The golden extension — the most commonly hit target. Many traders set their primary take-profit here. |
| 200.0% | Measured move target — price has doubled the original swing. Strong resistance expected. |
| 261.8% | Extended target — only hit in strong trends. Trail your stop rather than targeting this. |
Practical use: After entering a trade on a Fibonacci retracement (buying at 61.8%), use the 161.8% extension as your take-profit target. This gives you an excellent reward-to-risk ratio — you're buying at a discount and selling at a premium.
Confluence with extensions: When a Fibonacci extension level lines up with a previous support/resistance level, that zone becomes very significant. Price is likely to react there — either pause, consolidate, or reverse.
15. ATR — Average True Range
ATR (14-period)
ATR measures how much an asset typically moves in a given period. It doesn't tell you direction — just the magnitude of movement. Higher ATR = more volatile; lower ATR = calmer.
Satis Omnibus uses ATR to set dynamic stop losses and take profit targets:
- Stop Loss = Entry Price - (1.5 × ATR) for longs
- Take Profit = Entry Price + (3 × ATR) for longs
This gives a 2:1 reward-to-risk ratio — you risk 1.5 ATR to make 3 ATR. Even with a 40% win rate, this ratio is profitable long-term.
Why ATR matters: A fixed $5 stop loss makes no sense if Bitcoin moves $2,000 per day but is perfect for a $50 stock. ATR-based stops automatically adapt to each asset's volatility.
16. Volume
Trading Volume
Volume shows how many shares or coins were traded in each period. It confirms whether a price move is backed by conviction or is just noise.
| Price + Volume | Meaning |
|---|---|
| Price up + volume up | Strong bullish move — buyers are committed |
| Price up + volume down | Weak rally — could reverse (exhaustion) |
| Price down + volume up | Strong selling pressure — panic or distribution |
| Price down + volume down | Weak sell-off — could be a normal pullback |
| Breakout + high volume | Confirmed breakout — likely to continue |
| Breakout + low volume | Suspect breakout — likely to fail (fakeout) |
17. Higher Timeframe Analysis
One of the most important concepts in trading: always check the bigger picture. A buy signal on a 4-hour chart means nothing if the daily and weekly charts show a strong downtrend.
Satis Omnibus uses a Higher Timeframe (HTF) Gate that checks the daily chart before allowing trades on the 4-hour chart:
- Daily EMA 21 must be above EMA 55 (daily trend is up)
- Daily RSI must be above 40 (daily momentum isn't bearish)
If the daily trend is bearish, no buy signals fire on the 4-hour chart — even if every other indicator says "buy". This prevents you from fighting the larger trend.
The #1 beginner mistake is trading against the higher timeframe trend. A "great setup" on a 4-hour chart inside a daily downtrend will lose money more often than not. The HTF gate exists to prevent this.
18. Putting It All Together — Confluence
No single indicator is reliable on its own. The power comes from confluence — multiple indicators agreeing at the same time. The more indicators that align, the higher the probability of a successful trade.
How Satis Omnibus STRICT Mode Works
A STRICT buy signal requires all 6 conditions to be true simultaneously:
- EMA Stack — EMA 9 > EMA 21 > EMA 55 (trend structure is bullish)
- Price above EMA 200 — long-term trend is up
- RSI 40-70 — momentum is bullish but not overextended
- MACD Histogram positive — short-term momentum is rising
- Stochastic RSI %K below 25 — buying at a short-term dip (not chasing)
- Gaussian Channel bullish — the smoothed trend filter confirms
Then the HTF gate must also pass (daily trend up), and a quality score is assigned based on how strongly each condition is met.
Quality Stars
| Rating | What It Means | Position Size |
|---|---|---|
| 1 star | Minimum conditions met — entry is acceptable but not ideal | Smaller |
| 2 stars | Good setup — multiple confirmations align well | Standard |
| 3 stars | Exceptional setup — strong confluence across all indicators | Larger |
19. Common Mistakes
Overtrading
More trades doesn't mean more profit. Quality setups are rare — the scanner checks 670+ instruments to find the handful that meet all conditions. Patience is the edge.
Ignoring the Trend
Buying in a downtrend because RSI is "oversold" is a trap. Oversold can stay oversold for weeks in a strong downtrend. Always check the EMA stack and HTF gate first.
Moving Stop Losses
Never move a stop loss further away to "give the trade room". The stop was set based on ATR for a reason. Moving it increases your risk beyond what the strategy calculated.
Chasing Entries
If you missed the entry, let it go. Buying after the move has already happened gives you a worse risk/reward ratio. Wait for the next setup.
Using Too Many Indicators
More indicators doesn't mean better analysis. Many indicators are derivatives of price and say the same thing in different ways. The Satis Omnibus indicator set was chosen to cover trend, momentum, and volatility without redundancy.
Remember: The goal isn't to predict the future — it's to find setups where the probability is in your favor and the risk is controlled. Even the best setups fail sometimes. That's why position sizing and stop losses matter more than the entry.