What is this indicator?
By double-smoothing price changes, it produces cleaner, less noisy momentum signals. Its crossover with its signal line is interpreted similarly to MACD.
How to read the chart
The indicator moving toward the ends of its range usually signals overbought or oversold conditions; a divergence between price and the indicator is also considered an important signal.
Practical tip
Instead of trading purely off reaching an overbought or oversold zone, first check the overall trend on a higher timeframe and only take signals that align with it.