An indicator based on the difference between two exponential moving averages, expressed in absolute terms. Also known as the MACD indicator, the APO is calculated by subtracting the longer exponential moving average from the shorter exponential moving average. See also: Price Oscillator (PO), Percentage Price Oscillator (PPO).
RSI was introduced by Welles Wilder in the late 1970’s. Wilder observed that you should initiate the trade when the momentum indicator changes direction only when the average upmove is greater than the average downmove over a given number of days, or the inverse for a sell signal – when the average momentum is relatively … Read more
By Martha Stokes, C.M.T. © copyright 2007 all rights reserved. Trading Range Market Conditions require a different approach to trading than a trending, or correction phase market. OF the four sideways trending patterns, the trading range has the widest point range. It also tends to last a much longer time than other sideways patterns. This … Read more
The momentum indicator at core of the oscillator family, and understanding how to interpret this indicator will help you to better understand all the other oscillators. Momentum measures the rate of change rather than price itself. A fundamental principle in using momentum as an indicator is to buy when momentum crosses zero (or 50 in … Read more
Welles Wilder introduced the Relative Strength Index in 1978. RSI is widely used as an overbought/oversold indicator. It compares the amount of a security’s recent gains to the amount of its recent losses on a scale from 0 to 100. Normally, if the RSI rises above 30 it is considered a bullish signal and if … Read more
The Volume Oscillator identifies whether the volume trend is increasing or decreasing by using the difference between a longer and a shorter moving average of volume. When the Volume Oscillator rises above zero the shorter-term volume moving average has risen above the longer-term volume moving average. This means that the short-term volume trend is higher … Read more
The Volume Accumulation Oscillator, also known as the Chaikin Oscillator after it’s founder Mark Chaikin, shows the cumulative volume adjusted by the difference between the close and the midpoint of the day’s range. Divergence between volume and price movements can indicate a possible price reversal.
The Stochastic RSI uses RSI values and their relationship over time to determine entry and exit points and to confirm other indicators’ signals. Chart courtesy of Prophet Financial Systems (www.prophet.net)
Introduced by Donald Dorsey, the Relative Volatility Index is similar to the Relative Strength Index (RSI), however it uses the standard deviation over the past 10 days rather than daily price change. RVI’s signals are often used as confirmation to other indicators.