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Technical Indicators

Aroon Indicator

The Aroon Indicator: Up? Down? Or Sideways? The Aroon Indicator, also referred to as “Aroon Up/Down,” is a range-bound technical indicator developed by technical analyst and author Tushar Chande. “Aroon,” which is Sanskrit for “Dawn’s Early Light,” demonstrates Chande’s belief further in its ability to both determine and confirm trends. The Aroon Indicator has two lines, each with different measurements. These lines are referred to as “Aroon-Up” and “Aroon-Down.” Aroon-Up displays how long it has been… Read More »Aroon Indicator

On Balance Volume (OBV)

On Balance Volume: Understanding the Indicator On Balance Volume (OBV) is a technical indicator developed by Joe Granville in the 60s and was designed to display the flow of volume in and out of a stock or index. Simply put, the OBV is a running tally of volume. The OBV can trend up (bullish), down (bearish), or sideways (neutral). An example with annotations is shown below on $AAPL: How On Balance Volume Works A random… Read More »On Balance Volume (OBV)

Volume Weighted Average Price (VWAP)

Volume Weighted Moving Average (VWAP) Volume Weighted Average Price (VWAP) is an intraday indicator that you can use to determine where a stock is trading relative to it’s volume-weighted average for the market day. For the matheletes out there, the equation is below. It also helps determine market direction and confirm trade signals on an individual stock. Before you apply the indicator to your charts, understand how it works, the drawbacks of the indicator, and… Read More »Volume Weighted Average Price (VWAP)

Parabolic SAR Indicator

Parabolic SAR Indicator: Understand and Apply In trading, profits or losses are defined by a trader’s ability to anticipate price action. Several indicators can assist in predicting future price action, but few are as easy to interpret as the parabolic SAR indicator. The parabolic SAR (Stop And Reverse) is an indicator traders use to determine the short-term directional change and the point on the chart when this momentum shift has a higher-than-average probability of taking… Read More »Parabolic SAR Indicator

Moving Average Convergence Divergence (MACD)

The MACD Indicator: Understand and Apply The MACD Indicator is a momentum indicator that can play a part in determining whether a trend has completed or is just beginning. Depending on the time frame, the MACD can help you to find entry and exit points within the positive and negative turns of momentum. MACD Indicator – A Duel Threat  The Moving Average Convergence Divergence (MACD) indicator displays two primary indications. It displays momentum and trend-tracing… Read More »Moving Average Convergence Divergence (MACD)

Relative Strength Index (RSI)

Getting the Most From Relative Strength Index (RSI) The Relative Strength Index (or RSI) is an oscillator tool that is well known and widely respected. The term “Relative Strength Index” is somewhat misleading. It doesn’t actually compare the relative strength of the stock to an index as you might think it would. Instead, it measures the internal strength of just one you’re viewing. They should have just named it the “Internal Strength Index.” The Relative… Read More »Relative Strength Index (RSI)

Moving Averages

Moving Averages Explained Moving averages (or MAs) can be one of the easiest technical analysis indicators to understand and utilize. MAs get a lot of media exposure, yet many investors and traders are generally unaware of their full range of use. MAs can be beneficial to both long and short-term traders, as they can provide warnings, in addition to entry and exit indications, which in turn simplifies market data for you. While moving averages and… Read More »Moving Averages