The Relative Strength Index (RSI) is a trading indicator in the technical analysis of financial markets. It is intended to indicate the current and historical strength or weakness of a market based on the closing prices of completed trading periods. It assumes that prices close higher in strong market periods, and lower in weaker periods and computes this as a ratio of the … [Read more...]
Application and Chart for Envelopes in Forex Trading
Envelopes are used to indicate the trading range of a given market above and below an average price. Basically, moving average envelopes or trading bands are calculated by taking a moving average and calculating upper and lower trading bands as a fixed percentage above and below the moving average respectively. These are considered to suggest extreme overbought or oversold … [Read more...]
Ease of Movement : The Basic Concept
What Does Ease Of Movement Mean? A technical momentum indicator that is used to illustrate the relationship between the rate of an asset's price change and its volume. This indicator attempts to identify the amount of volume required to move prices. Generally a value greater than zero is an indication that the stock is being accumulated (bought) and negative values are used to … [Read more...]
Detrended Price Oscillator:Basic Concept
The Detrended Price Oscillator attempts to filter out trend in order to focus on the underlying cycles of price movement. To accomplish this, the moving average (generally 14-period) becomes a straight line and price variation above and below the moving average becomes the Price Oscillator. The Detrended Price Oscillator technical indicator can show overbought or oversold … [Read more...]
Demand Index : The Concept
The Demand Index is a combination of price and volume that appears to provide predictions of price changes. There are 6 rules when using the demand index:- weakness in price follows divergence between the demand index and price; after extreme peaks in the demand index, prices usually rally to new highs; tops are signalled by high prices and low demand index values; if the … [Read more...]