Technical Indicators

Projection Oscillator Definition

The projection oscillator was developed by Dr.

Price Rate of Change Definition

The Price Rate of Change (ROC) displays the value of the current price relative to the price of n periods ago.  The Price Rate of Change can be expressed in either points or percentages.  

Price Rate of Change Formulas

To plot the ROC in terms of points use the below formula:

Bullish Percent Index

The bullish percent index (BPI) is a market breadth indicator. The indicator is calculated by taking the total number of issues in an index or industry that are generating point and figure buy signals and dividing it by the total number of stocks in that group.

Displaced Moving Average Definition

The displaced moving average (dma) is created by shifting the moving averages forward or backwards in time by a specific time interval. The displaced moving average is used for two primary reasons:

Positive Volume Index Definition

The positive volume index (PVI) is an indicator which tracks volume as it increases from the previous day. It was first introduced by Norman Fosback in the book Stock Market Logic. The belief behind the indicator is that as volume increases, the investment community is unified with the current direction of the market. As this indicator shows the actions of the majority, it is often used as a contrarian indicator. Many professional traders utilize the PVI to assess what the smart money is doing in the market. The assumption is that on quiet days, large institutions are active in the market.

Public Short Ratio Definition and Formula

The Public Short Ratio (PSR) is a market sentiment indicator that shows the relationship between the number of public short sales and the total number of short sales.

Fibonacci Extensions Definition

Fibonacci levels are a standard measure for support and resistance levels within the market. This levels are calculated by analyzing the retracement levels between two swing points.

Fan Principle Definition

The fan principle is based on the use of multiple trend lines to judge a major reversal in the market. The fan principle on first glance looks very busy on the chart, but it can provide some clarity to otherwise choppy patterns. The fan pattern or principle gets its name because it resembles a "fan".

Exponential Moving Average Definition

The exponential moving average (EMA) is a product of statistical analysis. I remember listening to my professor talk about EMAs in undergrad and never did I believe I would be using this powerful price indicator to make a living in the markets.

What are Lagging Indicators?

Lagging Indicators provide buy and sell signals that are triggered once a strong move primary is in place. These indicators are often the tools of choice for traders that have longer investment horizons and are looking to capture profits from larger moves.

What are Leading Indicators?

Leading Indicators provide buy and sell signals based on the concept that a security is oversold or overbought. These leading indicators attempt to make investment calls on securities prior to actual price confirmation.

MACD - Technical Analysis Indicator

On Balance Volume Definition

The On Balance Volume (OBV) indicator was developed by Joe Granville, and detailed in his 1963 classic, Granville's New Key to Stock Market Profits. The OBV is a momentum indicator, which attempts to display the relationship between volume and price change.

Parabolic SAR Definition

The Parabolic SAR indicator was developed by Welles Wilder and mentioned in the book New Concepts in Technical Trading Systems. The Parabolic SAR stands for Parabolic Stop and Reversal. The indicator provides clear levels where securities are set to have a change in trend.

Qstick Definition and Formula

The Qstick indicator was developed by Tushar Chande, in order to determine the strength or weakness of a security over 'x" period of time. The Qstick indicator represents the moving average of the difference between the opening and closing prices of a security.