Tag Archives: Technical Analysis

A Comprehensive Guide to Market Reversals

Traders can experiment with Parabolic SAR settings until they find what suits them best. Wilder found that setting their maximum step at 0.02 and acceleration factor (AF) of 0.2 was most suitable for novice traders. A momentum indicator displays on a chart as a series of dots above or below an asset’s price candles, signalling when their position changes and …

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Unravel the Trend Mystery With This All-in-One Indicator

Ichimoku cloud is a trend indicator used to spot high probability reversals. Additionally, this tool can assist traders with riding trends successfully and closing trades profitably. The Ichimoku cloud consists of five lines that combine to produce both momentum and trend signals. Let’s take a look at each component of this indicator: What is the Ichimoku Cloud? Ichimoku Cloud is …

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How to Gauge Trends and Reversals With This Percentage-Based Indicator

Rate of Change Indicator (ROC) is a momentum technical trading tool. It compares current prices with those from a defined number of periods ago and plots this data over or under a fixed Zero Line. ROC can assist traders in detecting divergences, overbought/oversold conditions and centerline crossovers. Furthermore, traders should look out for trend reversal opportunities when the indicator touches …

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A Step by Step Guide to Combining Short Medium and Long-Term Momentum Indicators

The Ultimate Oscillator is a momentum indicator designed to reduce false trading signals after price surges such as bearish divergences where oscillator rises but prices continue their upward trajectory. By including multiple timeframes into its calculations, this approach attempts to counteract momentum indicators‘ tendency of producing false trading signals after surges such as price surges by creating less false signals …

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Money Flow Index – Identifying Market Reversals With Volume and Price Data

Algo trading

MFI differs from other technical indicators like RSI by taking both price and volume into account, providing overbought/oversold signals as well as any divergences from price that might indicate trend reversals. As shown below in a four-hour chart of GBP/USD, MFI had reached an oversold condition before price crossed over a 20 exponential moving average. Overbought The Money Flow Index …

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The Chande Momentum Oscillator – A Unique Approach to Measuring Market Strength

algorithm trading

Tushar Chande developed the Chande Momentum Oscillator as a momentum indicator based on the Relative Strength Index formula. This indicator compares recent gains to losses, and identifies overbought and oversold levels. Overbought and oversold levels often signal price reversals and provide entry signals, however an indicator which fails to breach these levels could signal a range market. How It Works …

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The Balance of Power Indicator Revealing the Secret Battle Between Buyers and Sellers

Algo Trading

Balance of Power indicators provide traders with an effective tool for recognizing price trends. They offer both bullish and bearish divergence signals. Assesses the strength of buyers and sellers by measuring how well they are at driving prices up to extreme levels, with values that typically fall between -1 and +1. It reveals the secret battle between Buyers and Sellers …

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Understanding the Force Index and Its Impact on Momentum Trading

The Force Index is a trend-following indicator that integrates price and volume data. It helps traders identify trade signals within trends as well as detect divergences. Force Indices tend to signal upward trends. Conversely, when they reach new highs they often signify the continuation of an uptrend; conversely if they drop lower lows this may signal that downtrends could be …

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Momentum Indicator Trading Strategies to Boost Your Profits

Algorithmic Trading strategies

Momentum trading can be an extremely profitable strategy for those able to manage its risks and stick to an established plan. However, it is crucial that trades be exited before reaching an overextended technical state. Divergences between the price chart and momentum indicator can help investors spot potential trends reversals by showing where the indicator line moves oppositely from price …

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Awesome Oscillator Simplifying Momentum Analysis for Profitable Trades

Algo trading strategies

Oscillator trading strategies provide traders with many valuable ways to identify potential buying and selling opportunities. Some of the more basic signals include zero line crossings, twin peaks and saucer setups. The Awesome Oscillator indicator can be easily added to your charts, with most trading platforms including this tool by default. Unfortunately, like any technical indicator, it does not guarantee …

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