Technical Indicators
Relative Strength Index Definition
The Relative Strength Index (RSI) is one of the most popular indicators in the market.
Commodity Channel Index Definition
The commodity channel index (CCI) is an oscillator used to identify cyclical trends in a security. It gained its name because it was originally used to analyze commodities. The formula for the CCI is as follows:
What is Climactic Volume?
As we have discussed many times before, volume analysis is the single most important factor in helping a trader determine if there is true buying or selling activity going on within a stock.
Chande Momentum Oscillator Definition
The chande momentum oscillator (CMO) was developed by Tushar Chande and is a technical indicator that attempts to capture the momentum of a security. Chande discussed this and many other indicators in his book "The New Technical Trader".
Chaikin Money Flow Definition
The chaikin money flow (CMF) was developed by Marc Chaikin and attempts to determine if a stock is under accumulation or distribution by comparing the closing price to the high-low range of the trading session. In Lehman's terms, if the stock closes near the high of the session with increased volume, the CMF increases in value.
Sentiment Indicators Definition
Sentiment indicators are used to gauge how investors are perceiving the current health in the market outside of simple price activity. Traders will use a variety of tools and methods for assessing the sentiment of a given security. One method is to analyze the put/call spread on a security to gauge how traders are feeling about a stock.
How to Calculate the Simple Moving Average
The simple moving average (SMA) is the most basic of the moving averages used for trading. The simple moving average formula is calculated by taking the average closing price of a stock over the last "x" periods.
Slow Stochastic Definition
The slow stochastic indicator is a price oscillator that compares a security's closing price over "n" range. The most commonly used range for the slow stochastic indicator is 14. The slow stochastic formula is calculated as follows:
Bull/Bear Ratio Definition
Once a week a poll is conducted by Investor's Intelligence of over 100 top investment advisors. The poll asks the advisors whether they are bullish, bearish, or neutral on the market. The survey is released every Wednesday. This relationship between bullish and bearish advisors is quantified in the bull/bear ratio.
Breadth Thrust Indicator Definition
The breadth thrust indicator is a momentum indicator developed by Dr. Martin Zweig. The indicator is best used for identifying major bull markets.
Tick Volume Definition
Tick volume is measuring every trade whether up or down and the volume that accompanies those trades for a given time period.
Aroon Indicator - Overview
The Aroon indicator anticipates when a security is changing from an impulsive move to a trading range and vice versa. The Aroon indicator was developed by Tushar Chande, who also created the Chande Momentum Oscillator and the Qstick. The aroon indicator displays two plots: (1) Aroon Up and (2) Aroon Down.
Upside Downside Volume Definition
The upside downside volume indicator displays the difference of the advancing and declining volume for the New York Stock Exchange. In essence, the indicator is displaying the new flow of volume into or out of the market.
Volume Analysis Definition
Volume analysis is the technical analysis technique of assessing the health of a trend, based on volume activity. Volume analysis is one of the oldest trading indicators in the market.
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