The Series of Technical Analysis Studies Chapter 5: “Directional Moving Index”

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.

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The Series of Technical Analysis Studies Chapter 4: “Keltner Channel”

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.

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The Series of Technical Analysis Studies Chapter 3: “Average True Range”

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.

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The Series of Technical Analysis Studies Chapter 1: “Simple 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.

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The Series of Technical Analysis Tools Chapter 4: “Price Channel”

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.

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