Indicators on Indicators: The Next Step in Analysis

Traders and analysts have been developing market indicators for decades. Many of these indicators are simply measuring the same idea in only a slightly different way since most indicators are based on the same limited amount of market information. For any given time frame, there are only four price data points – the open, close, … Read more

Absolute Price Oscillator (APO)

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).

Standard Deviation Channel

The Standard Deviation Channel consists of two parallel lines on either side of the Linear Regression Trendline. The lines are spaced x number of standard deviations above and below the Linear Regression Trendline. Chart courtesy of Prophet Financial Systems (www.prophet.net)

Williams Accumulation Distribution

Developed by Larry Williams, the Williams’ Accumulation/ Distribution indicator aims to reflect whether the market is controlled by buyers (accumulation) or by sellers (distribution). Prices making a new low along with the A/D indicator failing to reach a new low suggests that accumulation is taking place and creates a buy signal. Prices making a new … Read more

Williams %R

Developed by Larry Williams, Williams %R is a momentum indicator similar to the Stochastic Oscillator. Typically used to determine overbought and oversold levels in nontrending markets. The scale ranges from 0 to -100 with readings below -20 considered overbought, and readings above -80 considered oversold. Williams %R is normally calculated using 14 day periods, but … Read more

Wilders Volatility Index

Developed by J. Welles Wilder, Jr. this indicator is intended to measure true range over time and is also known as Average True Range. It is the greatest difference between: This period’s high and low, the previous period’s close and this period’s high, the previous period’s close and this period’s low. Chart courtesy of Prophet … Read more

Wilders Smoothing Indicator

Developed by J. Welles Wilder, Jr. this indicator is similar to the Exponential Moving Average. It is slow to reflect price changes compared with other moving averages. Wilder’s Smoothing is used as a part of Wilder’s RSI. Chart courtesy of Prophet Financial Systems

Momentum Indicator

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