What is PSAR?
PSAR is an indicator developed by Welles Wilder, Where P stands for Parabolic & SAR stands for Stop and Reversal. The indicator helps in assessing the direction of the stock’s movement.
Continue reading “Chapter- 8: Parabolic SAR – (PSAR)”
TRIX is a fairly simple looking momentum indicator that smoothens out price fluctuations and shows the direction of dominant momentum in a stock or other asset.
Continue reading “The Series of Technical Analysis Studies Chapter 7: “TRIX””
What is a MACD?
Moving average convergence divergence (MACD) is a trend-following momentum indicator that shows the relationship between two moving averages of prices. MACD can be pronounced as either “Mac-Dee” or “M-A-C-D.”
Continue reading “The Series of Technical Analysis Studies Chapter 6: “MACD””
What is a Directional Moving Index?
The Directional Movement Index (also known as DMI) is a momentum indicator developed by J. Welles Wilder. The DMI is actually part of a series of technical indicators developed by Wilder, so some trading platforms split up the indicators, providing Directional Movement as one indicator and ADX as another. DMI tells you when to be long or short. It is especially useful for trend trading strategies because it differentiates between strong and weak trends, allowing the trader to enter only the strongest trends.
Continue reading “The Series of Technical Analysis Studies Chapter 5: “Directional Moving Index””
What is Keltner Channel?
Originally developed by Chester Keltner in the late 1950’s, the Keltner channel indicator belongs to a family of Technical analysis tools called envelop indicators. Keltner Channels are volatility-based envelopes set above and below an exponential moving average. This indicator is similar to Bollinger Bands, which use the standard deviation to set the bands.
Continue reading “The Series of Technical Analysis Studies Chapter 4: “Keltner Channel””
What is an Average True Range?
The average true range is a volatility indicator. It measures the average of true price ranges over time. The True Range is the greatest distance between today’s high to today’s low, yesterday’s close to today’s high, or Yesterday’s close to today’s low.
Continue reading “The Series of Technical Analysis Studies Chapter 3: “Average True Range””
What is an Exponential Moving Average?
The Exponential Moving Average (EMA) is similar to SMA but EMA gives more importance to recent price data than the simple moving average. It responds more quickly to recent price changes than SMA.
Continue reading “The Series of Technical Analysis Studies Chapter 2: “Exponential Moving Average””
What is a Simple Moving Average?
A Simple Moving Average (SMA) is an arithmetic moving average calculated by adding the closing price of the security for a number of time periods and then, dividing this total by the number of time periods. SMA is basically an average stock price over a period of time.
Continue reading “The Series of Technical Analysis Studies Chapter 1: “Simple Moving Average””
What is an Andrew’s Pitchfork?
Andrew’s pitchfork is a technical analysis concept developed by renowned educator Dr Alan Andrews. It’s basically a trend channel tool consisting of three lines that helps traders & investors to determine the support & resistance.
Continue reading “The Series of Technical Analysis Tools Chapter 5: “Andrews Pitchfork””
What is a Price Channel?
The price channels are basically two parallel lines, drawn above and below the price security. The upper line is set at the period high, and the lower line is set at the period low. So, for a 20 days price channel, the upper channel would be equal to 20 day high, and the lower channel would be equal to 20 day low.
Continue reading “The Series of Technical Analysis Tools Chapter 4: “Price Channel””