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Technical Indicators |
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Average true range (ATR)
BOLLINGER BAND (CCI)Commodity Channel
Index Linear Regression (MACD)
Momentum MOVING AVERAGE
PARABOLIC TIME PRICE (ROC)Rate of Change
Relative Strength Index Slow
Stochastic Standard Deviation STOCHASTIC
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EDUCATION |
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Online Tutorial |
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Average true range (ATR)
A measure of volatility introduced by Welles Wilder in his book: "New Concepts
in Technical Trading Systems." Wilder originally developed the ATR for commodities
but the indicator can also be used for Forex. Simply put, a currency experiencing
a high level of volatility will have a higher. |
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BOLLINGER BAND Developed
by John Bollinger, Bollinger Bands are charted by calculating a simple moving
average of price, then creating two bands a specified number of standard
deviations above and below the moving average. You can draw the simple moving
average analysis on the same chart as the Bollinger Bands analysis, using
the same interval. In addition, Bollinger Bands are usually plotted with
a bar analysis so that the proximity of the bands to the prices can be easily
observed. |
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(CCI)Commodity Channel Index
Commodity Channel Index (CCI) was originated by Donald Lambert in 1980.
It is based on the assumption that a perfectly cyclical commodity price
approximates a sine wave. Designed to be used with instruments, which have
seasonal or cyclical tendencies, Commodity Channel Index is not used to
calculate cycle lengths but rather to indicate that a cycle trend is beginning. |
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Linear Regression
Linear regression is a statistical tool used to measure trends. Linear regression
uses the least squares method to plot the line. The linear regression line
is a straight line extending through the prices. |
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(MACD)Moving Average Convergence
Divergence Moving Average Convergence Divergence or MACD as it
is more commonly known, was developed by Gerald Appel to trade 26 and 12-week
cycles in the stock market. MACD is a type of oscillator that can measure
market momentum as well as follow or indicate the trend. |
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Momentum Momentum
is an oscillator that measures the rate at which prices are changing over
the Observation Period. It measures whether prices are rising or falling
at an increasing or decreasing rate. The Momentum calculation subtracts
the current price from the price a set number of periods ago. This positive
or negative difference is plotted about a zero line. |
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MOVING AVERAGE A
Moving Average is a moving mean of data. In other words, Moving Averages
perform a mathematical function where data within a selected period is averaged
and the average 'moves' as new data is included in the calculation while
older data is removed or lessened. Moving Averages essentially smooth data
by removing 'noise'. This smoothing of data makes Moving Averages popular
tools in identifying price trends and trend reversals. |
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PARABOLIC TIME PRICE(SAR)
Parabolic Time Price is a system that always has a position in the market,
either long or short. You would close out the current position and enter
a reverse position when the price crosses the current Stop And Reverse (SAR)
point. The SAR points resemble a parabolic curve as they begin to tighten
and close in on prices once prices begin to trend. This explains the name
- Parabolic Time Price. |
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(ROC)Rate of Change Rate of Change
is an oscillator that measures how fast the momentum of the market is changing
over the Observation Period. Rate of Change is very similar to Momentum
in that it compares the current price with the price a specified number
of periods ago, however Rate of Change is calculated differently. Where
Momentum subtracts the current price from the price a specified number of
periods ago, Rate of Change divides the current price by the price a specified
number of periods ago and then multiplies the result by 100 |
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(RSI)Relative Strength Index
Developed by J. Welles Wilder and introduced in his book New Concepts
in Technical Trading Systems. RSI calculates the difference in values between
the closes over the Observation Period. These values are averaged, with
an up average being calculated for periods with higher closes and a down-average
being calculated for periods with lower closes. The up average is divided
by the down average to create the Relative Strength. Finally, the Relative
Strength is put into the Relative Strength Index formula to produce an oscillator
that fluctuates between 0 and 100. |
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Slow Stochastic
Stochastics are an oscillator developed by George Lane and are based on
the following observation: As prices increase - closing prices tend to be
closer to the upper end of the price range. As prices decrease - closing
prices tend to be closer to the lower end of the price range. Slow Stochastics
are based on Fast Stochastics but provide a slower, smoother response to
price movements. Slow Stochastic consist of two lines, %K and %D: - The
%K line in Slow Stochastic is the same as the %D line in Fast Stochastic.
- The %D line in Slow Stochastic is a Simple Moving Average of %K Slow Stochastic.
This line is smoother than the %K and provides the signals for an overbought
/ oversold market. |
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Standard Deviation
A measure of dispersion of a set of data from their mean. The more spread
apart the data is, the higher the "deviation". In statistics is can also
be calculated as the square root of the variance A. Volatile price would
have a high standard deviation. In mutual funds, the standard deviation
tells us how much the return on the fund is "deviating" from the expected
normal returns. |
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STOCHASTICA Stochastics
are an oscillator developed by George Lane and are based on the following
observation: As prices increase - closing prices tend to be closer to the
upper end of the price range. As prices decrease - closing prices tend to
be closer to the lower end of the price range. |
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