> For the complete documentation index, see [llms.txt](https://www.degenbot.wiki/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://www.degenbot.wiki/everyday-use/reading-analysis.md).

# Reading analysis and indicators

Understand common analysis terms without treating a single indicator as a decision rule.

Where your release offers an analysis view, begin with its **market, timeframe, and timestamp**. A detailed explanation of the wrong instrument or an old observation is still the wrong context.

The concepts below explain terminology you may encounter. They are not a claim that every indicator is active in Degen's current production method.

### Start with the market story

**Trend** describes the broader direction over a chosen period. **Momentum** describes the strength or pace of recent movement. **Volume** measures trading activity in the data source. **Volatility** describes how much price varies, not which direction it must go next.

An analysis can say that a market is in a broader decline while short-term momentum is recovering. Those statements can both be true because they describe different horizons.

### Common terms

| Term                 | What it helps describe                                                    | What not to assume                                 |
| -------------------- | ------------------------------------------------------------------------- | -------------------------------------------------- |
| Moving average / EMA | A smoothed price series; an EMA gives more weight to recent observations. | Crossing a line guarantees continuation.           |
| RSI                  | Recent gains relative to losses over a selected period.                   | A high or low reading alone guarantees a reversal. |
| MACD                 | The relationship between moving averages and changes in momentum.         | A crossover independently confirms every setup.    |
| Bollinger Bands      | Price relative to a moving average and a volatility-based envelope.       | Touching a band automatically means buy or sell.   |
| ADX                  | Trend strength rather than bullish or bearish direction by itself.        | A high value necessarily means an upward trend.    |
| Support / resistance | Areas where prior behaviour suggests buying or selling interest.          | A level cannot break or will fill exactly.         |
| Breakout             | Movement beyond a specified range or level.                               | Every breakout continues.                          |
| Pullback             | Movement against a recent trend.                                          | The earlier trend must resume.                     |
| Volume confirmation  | Activity supporting an interpretation of price movement.                  | High activity proves the direction will persist.   |

The chosen lookback, timeframe, and data source affect these readings. The same indicator name does not prove that two systems calculate or use it identically.

### Multiple timeframes

A short interval can show an emerging change while a longer one still reflects the previous trend. Check which horizon the alert evaluates. Do not combine a one-minute observation with a four-hour conclusion as though they were identical tests.

### Scores and explanations

A score summarises inputs under a method; it is not automatically a calibrated probability. A persuasive written explanation also does not independently validate the underlying data or model.

Use the analysis to answer: What is being observed? Why might it matter? What would contradict it? When does it stop being relevant?

If the explanation and displayed values seem inconsistent, preserve the message and report the mismatch instead of silently correcting it yourself.