Bullish Percent Index (BPI) A breadth indicator derived from the percentage of stocks on P&F Buy signals. What Is the Bullish Percent Index? The Bullish Percent Index (BPI) is a…
Bob Farrel's Market Rules Bob Farrell is a Bob Farrell's 10 Rules Wall Street veteran whose 10 rules are drawn on 50 years of experience crafting his investing rules. After…
High-Low Index The 10-day moving average of the Record High Percent Index, which is a breadth indicator (see below). Record High Percent, which is based on new 52-week highs and lows, serves as the basis for the High-Low Index, a breadth indicator. New highs divided by new highs + new lows is the Record High Percent. A smoothed version of the Record High Percent, the High-Low Index is just a 10-day SMA of the Record High Percent. This article will describe how to determine the High-Low Index's direction and how to define a trading bias using the absolute level. Welcome to Part our Technical Analysis 101…
What Does DPO Measure? The difference between a previous price and a moving average is measured by the Detrended Price Oscillator (DPO). Remember that DPO is also shifted to the left. The indicator oscillates above/below zero as prices move above/below the displaced moving average. Chart 2 shows the S&P 500 ETF (SPY) with a 20-day…
What Is the Alligator Indicator? Bill Williams created the Alligator indicator, a technical analysis tool that aids in determining the existence and direction of market trends. To assist in identifying trend movement, it employs three smoothed moving averages (SMMAs) defined at three Fibonacci-based periods: 13, 8, and 5. Learn About Lagging indicators Each moving average period is identified using the following labels and color codes: Jaw. Slowest moving average (13-period) is…
What Are ATR Bands? An indicator based on volatility, ATR Bands plot bands above and below the underlying price's moving average. ATR Bands, which build upon J. Welles Wilder's Average True Range (ATR) concept, provide a visual depiction of price volatility around its central moving average. How to Interpret ATR Bands ATR Bands can be used in a variety of ways to improve your trading strategies or evaluate a market.Here are some suggestions regarding how to use and interpret them. Analyzing Volatility ATR Bands are used by most traders to measure market volatility.Through the visual projection of volatility levels surrounding a stock's price, the bands can assist you in evaluating the state of the market and then modifying your tactics accordingly. Setting Stop-Loss and Take-Profit Levels Setting stop-loss and takeprofit levels is another popular application for ATR Bands. You can allow your trades to vary without being prematurel stopped out by setting stop-loss orders a specific multiple of the ATR below the entry price. In a similar manner, to match profit objectives with market volatility, take-profit levels can be established by multiplying the ATR above the entry price. Position Sizing ATR Bands can be used to help in position size. You can calculate the right trade size in relation to the asset's volatility by evaluating the ATR value. While lower volatility might permit larger positions, higher volatility (shown by a higher ATR) might recommend smaller position sizes to mitigate …
What Is the Aroon Oscillator? The Aroon Oscillator is the difference between Aroon-Up and Aroon-Down. These two indicators are usually plotted together for easy comparison, but chartists can also view…
The Aroon indicators fluctuate above/below a centerline (50) and are bound between 0 and 100. These three levels are important for interpretation. At its most basic, the bulls have the…
In the world of trading, price tells the story—but volume is the proof of who's listening. If price is the what, volume is the why. While many beginners focus solely…
If you’ve ever dipped your toes into the world of trading or investing, you’ve probably heard that “the trend is your friend.” But how do you actually measure a trend’s…