Technical Indicators
The stochastic oscillator is a momentum indicator that measures how powerful a price move is. Although the formula can be applied to any kind of data, it is most often used with closing prices of stocks, ETFs or other tradable securities. The indicator shows where the closing price is in… Read More
Bollinger Bandwidth is one of the few technical indicators that measures volatility. Most indicators use price and attempt to identify trend changes. Bollinger Bandwidth measures how strong the recent trend is. It does not offer any information about whether prices will go up or down in the future. Instead the… Read More
The Momentum of Comparative Strength (MoCS) indicator transforms relative strength (RS) into a momentum tool and helps traders identify changes in the trend of RS. This indicator was created by Christopher Hendrix, CMT, and introduced in an article in the November 2006 issue of SFO Magazine. MoCS replaces price with… Read More
Fibonacci ratios are widely used to develop price targets for retracements on countertrend moves. A Fibonacci retracement will help spot support levels in an uptrend or resistance in a downtrend. Fibonacci extensions apply the same idea to price moves that are in the direction of the… Read More
Fibonacci ratios are widely used to develop price targets for retracements on countertrend moves. A Fibonacci retracement will help spot support levels in an uptrend or resistance in a downtrend. Fibonacci extensions apply the same idea to price moves that are in the direction of the… Read More
Retracements are price moves that are opposite to the primary trend. In a bull market, retracements are the short declines that interrupt the long-term trend of rising prices. Bear market retracements are short up moves. While traders usually think of retracements in terms of price, the concept can also be… Read More
A number sequence known as the Fibonacci series was proposed as an answer to the question, “If we start with one pair of rabbits, how many pairs of rabbits will there be one year later if we assume that every month each pair reproduces and adds a new pair to… Read More
Average True Range (ATR) is an indicator used to measure volatility. IT was introduced to the trading community by J. Welles Wilder in his 1978 book, New Concepts in Technical Trading Systems. Mathematically, the formula is similar to an exponential moving average and was relatively easy to calculate before computers… Read More
An old trader once told me, “Trading is the hardest easy money you’ll ever make.” In theory, trading is easy enough — all you have to do is buy low and sell high, right? After all, there are thousands of books claiming to have all the information we’ll ever need. Read More
Many investors spend their time trying to find a dark horse stock that will come out of nowhere to provide monster gains. While this can yield spectacular results for a lucky few, the majority of investors fail most of the time. I take the exact opposite approach to… Read More