Tag Archives: Technical Analysis

Know Sure Thing (KST), is a momentum indicator based on Rate of Change (ROC). It helps traders interpret rate-of-change price data by providing trading signals generated from centerline and signal line crossovers. Divergences produced by this strategy can also help identify trend reversals. Learn to use IQ Option with its assistance. Identifying Divergences Martin Pring created the KST, or Know …

The Elder Ray Index is a trend-following indicator, employing two indicators referred to as Bulls Power and Bears Power to track price trends. A 13-period exponential moving average (EMA) helps determine which direction the trend is moving in, with trading signals generated whenever there is divergence between Bulls Power and price. This indicator works on the theory that during an …

Keltner Channels provide traders with valuable price signals in rapidly moving markets. Similar to Bollinger Bands, this volatility-based envelope indicator helps traders better time their entries and increase winning rates. Developed by Chester Keltner and updated by Linda Raschke, the Keltner Channel utilizes average true range to define volatility bands. It provides an effective method of detecting directional trends as …

Donald Dorsey created the Mass Index as a volatility indicator to pinpoint potential trend reversals and understand widening and contracting trading ranges, which technical analysts often fail to analyze due to their focus on singular price/volume movements. When the mass index reading spikes above 27 and then falls back under 26.5, this could signal that trading may be viable. Trend …

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 …

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 …

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 …

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 …

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 …

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 …