Tag: trading oscillators

Trading the Awesome Oscillator

Trading the Awesome Oscillator

Trading Indicators
The Awesome oscillator was developed by Bill Williams, part of his series of 'Chaos Theory'. Bill Williams went on to develop various indicators as part of this '5-market dimensions'. Some of the other well known indicators from Bill Williams include the Williams Fractal, Alligator, Awesome Oscillator. The Awesome oscillator is commonly found on many charting platforms and is used to measure momentum. The awesome oscillator is identified by its histogram which oscillates around the 0-line. When the awesome oscillator (AO for short) rises above the 0-line, it indicates positive momentum and when it drops below the 0-line, it indicates negative momentum. Trade signals are taken based in reference to the AO's 0-line. Calculating the Awesome oscillator The Awesome Oscillator calculates th...
Understanding Money Flow Index

Understanding Money Flow Index

Trading Indicators
The Money Flow Index, or MFI for short is a momentum based oscillator that was created Gene Quong and Avrum Soudack. The purpose of MFI was to measure the strength of institutional money flowing in and out of the security/instrument. It is quite similar to the RSI (Relative Strength Index) but differs in the fact that MFI also takes into account the volume, whereas RSI only considers the price. The MFI is ideally suited for securities or instruments where volume plays an important role and one which is measured accurately. Therefore, the MFI is ideal for trading the equity or futures markets as compared to forex, where the aspect of volume is questionable. Calculation of the Money Flow index The MFI oscillates between 0 - 100 and is based on an 'N-period' where N could be days/hours o...
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...
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...
Introduction to Williams Percent Range Indicator

Introduction to Williams Percent Range Indicator

Trading Indicators
The Williams' Percent Range indicator is a technical indicator that works almost similar to the Stochastic Oscillator and is a faster version of the Stochastics. Meaning that this indicator is used to identify the overbought and oversold conditions in the market. The indicator was developed by Larry R. Williams and is used to compare the market's close to the high/low range for a specified period of time and is plotted against a scale of 0 to - 100. t is commonly understood that the %R reading over -80 marks an oversold condition while a reading over the -20 indicator marks an overbought condition. The Williams Percent R indicator is found by default on most trading platforms or charting packages and conveys momentum in price and directional changes. It is considered a leading in