Directional Movement Index (DMI)

The Directional Movement Index (DMI)  (being a part of the ADX indicator) consists of two lines, the DMI plus line (DMI+) and the DMI minus line (DMI-), which generate buy and sell signals. The E-mini Russell 2000 Future example depicts DMI. DMI Bullish Crossover Buy Signal When the DMI+ crosses above the DMI-. DMI Bearish…

28 Mar @ 16:39

Detrended Price Oscillator

The Detrended Price Oscillator technical indicator can show overbought or oversold levels and create buy and sell signals. It is meant to filter out trend in helping to direct one’s focus on the underlying cycles of price movement. For this the moving average (usually 14-period) becomes a straight line and price variation above and below…

28 Mar @ 15:46

Commodity Select Index CSI

The CSI is a technical indicator created by Welles Wilder and detailed in his popular book, New Concepts in Technical Trading Systems. It weighs the volatility and trending characteristics of futures market and thus aid in selecting the best commodity to trade. The higher the Commodity Select Index, the best risk-reward setup. The 100 oz….

28 Mar @ 15:31

Commodity Channel Index (CCI)

The Commodity Channel Index (CCI) is a widely used indicator, giving simple to use buy and sell signals. It is also used to identify overbought and oversold areas of price action. The CCI is calculated so that roughly 75% of price movement should be between +100 (overbought) and -100 (oversold). In the chart of the…

28 Mar @ 15:07

Chaikin Oscillator

The Chaikin Oscillator or Volume Accumulation Oscillator is used to confirm price movement or divergences in price movement. It consists of the difference between two exponential moving averages (usually 3 and 10-day) of the Accumulation Distribution Line indicator. This oscillator is more accurate than the On Balance Volume indicator. On Balance Volume: adds all volume…

28 Mar @ 10:14

ADX Average Directional Index

The Average Directional Movement Index (ADX) technical analysis indicator describes when a market is trending or not trending and it can produce buy and sell signals when combined with the DMI+ plus and DMI- minus the ADX. The main use of the ADX is to establish if a stock, future, or currency pair is trending…

27 Mar @ 11:05

Adaptive Moving Average

Adaptive Moving Averages changes its sensitivity to price fluctuations, becoming more sensitive during periods when price is moving in a certain direction and less sensitive to price movement when price is volatile. In the current example the chart shows E-mini Nasdaq 100 Futures contract, with a difference between an Exponential Moving Average which weights current…

27 Mar @ 10:36

Advance Decline Line

The Advance Decline Line is employed mostly to confirm price movement and detect divergences. The Advance Decline Line is calculated as such: New York Stock Exchange (NYSE) Advancing Issues – NYSE Declining Issues The calculated number is then added to the previous day’s Advance Decline Line. For instance: today’s advancing issues ($ADV or $NYADV) is…

27 Mar @ 09:40

Accumulative Swing Index

The Accumulative Swing Index (ASI) is primarily employed as a divergence and confirmation tool as well as for buy and sell signals. It was developed by Welles Wilder in his technical analysis book New Concepts in Technical Trading Systems and designed to be used for futures trading. However, it can also be used for stock…

27 Mar @ 09:17

Accumulation Distribution

Accumulation Distribution uses volume to confirm price trends or warn of weak movements that could result in a price reversal. Accumulation: Volume is considered to be accumulated when the day’s close is higher than the previous day’s closing price. Distribution: Volume is distributed when the day’s close is lower than the previous day’s closing price….

26 Mar @ 18:25

Fibonacci Retracements and Projections

When traders use Fibonacci retracements and projections they are also, without always knowing it, using an element of Elliott Wave Theory. In the 1940′s, R. N. Elliott enhanced his initial Wave Theory tenets to include Fibonacci numbers, as he noticed that the mass psychology underlying the markets’ movements tended to repeat over time. Elliott related…

15 Mar @ 18:05

Identifying Point and Figure Chart Patterns

Point and Figure charts are a type of price analysis that has existed since the 19th century. Recently, however, there has been a renewed interest for it. These charts have the main advantage of allowing forex traders to completely eliminate the element of time and focus only on exchange rate movements themselves. Many professional futures…

13 Mar @ 13:48

Market Strength: Measuring Market Movements

Knowledge, like in any liquid, market-based investment, creates profits in forex. If you can accurately predict where the market is going and do so consistently, you’ll be a very rich person. However, there a multiple components to making successful predictions: know what direction the market is moving in is not enough; you also have to…

13 Mar @ 13:30

Foundations of Forex Technical Analysis

Having a good understanding of technical analysis can be the key to successful trading in the forex market. Certain people with a certain amount of expertise in financial analysis might disagree with this assessment. However, they are usually those who hold advanced degrees in economics and do not wish to feel that they are wasting…

09 Mar @ 19:40

Multiple Time Frame Analysis

When using technical analysis in forex trading, a number of traders will refer to charts that cover different time frames in order to refine their analysis.  Further, many technical analysts provide different forecasts for a particular currency pair that depends on what time frame they have under consideration. Due to the fractal nature of market…

09 Mar @ 19:19

Standard Deviation Indicator

Standard distribution is the basis that the majority of patterns of random distribution come down to with time, but even those with heavy or long tales, as, for instance, those with multiple regional means, or medians, eventually converge on the standard distribution pattern when the number of sample goes up. Thus, it is the basis…

07 Mar @ 19:46

The Inverted Hammer

The inverted hammer described as a single candlestick form but to use it, you have to use it like a morning star, which is an upward reversal figure composed of three candlesticks. The 2nd candlestick, the star itself is here an inverted hammer. This upward reversal figure is less powerful than a morning star. The…

06 Mar @ 13:40

Frying Pan Bottom

This is a bullish reversal figure composed of a series of candlesticks. It is significant on all units of time. The elements that characterize it are:      It should appear after a downtrend.      The bodies of candlesticks at the summit are generally small.      The trend slows and takes a concave trajectory.      The…

06 Mar @ 13:38

The morning star

The morning star is a relatively powerful upward reversal figure, composed of three candlesticks. The 2nd candlestick is the star itself. The elements that characterize it are:     The morning star must appear after a downtrend.     The 1st candlestick must have a red body.     The 2nd candlestick should draw a bearish gap, it ideally has a…

02 Mar @ 19:17

Dark Cloud Cover

Dark cloud cover is a figure turning bearish consisting of two candlesticks which intervene after an uptrend. It is significant on all units of time and less powerful than the bearish engulfing. The elements that characterize it are:     The dark cloud coverage must appear after an uptrend.     The first candlestick should be green, preferably powerful….

02 Mar @ 19:00