Williams Percent of R (%R)

Larry Williams developed an overbought/oversold oscillator that, like the others, compares the recent close to the market’s trading range over x days. Unlike with Stochastics, the today’s close is subtracted from the high of the range over x days and then divided by the range over those days. This yields an inverted oscillator where an … Read more

Trendline Analysis and Open Interest

Joseph Skibinski Although Moving Averages offer an excellent means for determining the trend in the market, their lag and lack of precision makes it difficult to trade them in an optimal fashion. Trendline Analysis allows us to more effectively trade the market by clearly defining levels of support and resistance. This is particularly true when … Read more

Stochastics Tutorial

George Lane found another way to track market momentum by following the relationship between a market’s closing price and the extremes of its recent range. A bull market should consistently see closes near the high it’s recent range. A bear market should see closes near the range’s lows. A market’s momentum wanes as the day’s … Read more

Relative Strength Index (RSI)

One of the problems associated with many technical indicators, such as moving averages, is the sudden shift in their value as a data point from the beginning of the series drops off. For instance, a moving average indicator may suddenly give a trade signal even though the market has remained inactive. This is due to … Read more

Pivot Point Analysis

Pivot Points offer the trader a method of determining support and resistance for a given time frame. Pivots can be used with any time frame, daily, weekly, monthly, even any intra-day chart. A common technique is to calculate Pivots for a variety of time frames using common levels as a way of developing confidence parameters. … Read more

Moving Averages

Although moving averages are an imprecise technical tool, they are effective in their ability to help define the environment that you are trading in. In their most common form, moving averages are just a simple average of a market’s closing prices for the last x number of periods. Those periods may be days, weeks, months … Read more

Moving Average Convergence/Divergence (MACD)

Gerald Appel developed an interesting oscillator that provides greater emphasis on recent price action over more distant activity through a creative use of exponential moving averages. The first step in the derivation of this indicator is to calculate a 12 and a 26 day exponential moving average from your price data. Your next step would … Read more