Tag: technical analysis indicators

Trading with the Relative Vigor Index (RVI)

Trading with the Relative Vigor Index (RVI)

Trading Indicators
Among the many oscillator suite of indicators, the Relative Vigor Index, or RVI for short, is relatively less popular than its famous cousins such as the Stochastics or even the Relative Strength Index. A quick search reveals that most trading systems make use of the above two and there are hardly any popular trading systems that makes use of the RVI oscillator. However, that being said, the Relative Vigor Index makes for a fine indicator which when applied correctly can prove to be a valuable took for technical analysis. The RVI Indicator was developed by John Ehlers, who is widely known for his discovery of MESA (Maximum Entropy Spectrum Analysis), (Center of Gravity) COG indicator and other such unique indicators. Most of his work, and the resulting indicators were based off Ehle...
Moving Averages – Everything you should know

Moving Averages – Everything you should know

Trading Indicators
The moving averages indicator is one of simplest yet widely used indicator across every markets including Forex, Futures and equities. It is one of the most popular indicator with many technical analysis relying heavily on the moving average. As the name indicates, the moving average indicator is nothing but a line that plots the average of price across the chart continuously. The average can be applied to Open/High/Low/Close or even to typical price, which is High/Low/Close or Median Price, which is High/Low and Weighted Close, which is High/Low/Close/Close. Moving Averages are used to not only gauge the trend of the underlying security, they also act as dynamic support and resistance levels. Therefore it is not uncommon to see prices stall near a moving average. The moving average ...
Guide to understanding divergence trading

Guide to understanding divergence trading

Trading Indicators
Divergence trading is a well known/well used trading method used across various markets, especially in forex. While divergence trading is not a stand-alone concept of trading, it can be quite useful (and is widely used) as an additional confirmation of a trade signal/set up. In this article, we explain the basics of divergence, how it all started and how you can use divergence techniques to improve your trading system. Dow Theory - The origin of divergence Divergence trading is based off the well known Dow Theory, known as Dow Theory Divergence. The Dow Theory divergence analyses the relationship between the DJIA and the Dow Jones Transport Average. Charles Dow compared the Dow Jones Industrials against the transport average and came up with the logic that there was a close relationship ...
What is the Parabolic SAR Indicator

What is the Parabolic SAR Indicator

Trading Indicators
Parabolic SAR, short for Stop and Reverse is a technical indicator developed by J. Welles Wilder. The PSAR indicator is used to primarily determine the direction of price and the points at which price tends to reverse and move in the opposite direction. The Parabolic SAR can be identified by the 'dots' that are drawn on the charts, showing potential price points of reversal and are plotted either above or below the instrument's price. The PSAR trails price by plotting the dots either below the price during an uptrend or above the price during a down trend. These are also known as Rising SAR or Falling SAR. The Parabolic SAR is a free trading indicator that is usually available by default in most trading platforms. PSAR can be used to identify potential price reversals thus giving...
Introduction to Schaff Trend Cycle

Introduction to Schaff Trend Cycle

Trading Indicators
A relatively new indicator to the markets, the Schaff Trend Cycle indicator was developed by Doug Schaff in 2008. The concept of the Schaff Trend Cycle Indicator is based on a trend indicator that is run through a cycle oscillator, creating an effective indicator ideal for entry and exit signals for trading. Doug Schaff, its creator built this indicator based on his over 20 years of experience in the forex markets. The STC was built to improve on the existing MACD to identify market trends. Quite soon, the Schaff Trend Cycle or STC for short gained popularity with traders due to its simplicity and high level of accuracy. It is learnt that the STC is more accurate than the MACD and also helps in representing forthcoming price movements, quicker than the MACD. Despite its popularity th...