Trading Indicators

Detailed explanation of various trading indicators used in technical analysis.

Ichimoku Trading System

Ichimoku Trading System

Trading Indicators
The Ichimoku trading system is one of the few default indicators available on most charting platforms that in itself makes up for a complete trading system. But of course, traders can use the independent components of the trading system to build customized strategies. In English language, the Japanese word Ichimoku translates to equilibrium or equilibrium of price. The Ichimoku trading system or indicator stands out due to the clouds, which are support and resistance levels..  As the name suggest, a view of the Ichimoku trading system gives the trader a clear idea on the trend and the general view of price. Although the Ichimoku Kinko Hyo trading system might look complicated, it is in fact very simple and one of the easiest trading systems to use. The Ichimoku trading system is a
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...
Basics of Commitment of Traders Report

Basics of Commitment of Traders Report

Trading Indicators
Commitment of Traders report or COT report for short is a weekly report published by the CFTC for mandatory disclosure of trade positions from the institutional traders. Often considered to level the playing field, the CoT report is published every Friday for data from the previous Tuesday. This is a valuable report that is a must have for every serious trader. In a nutshell, the Commitment of Traders report shows the number of long and short positions taken up by commercials, non commercials and small (retail traders). In effort to bring transparency and to prohibit institutionals from engaging in market cornering tactics, the CoT report is an extremely useful tool for traders. However, it is not a simple report to read and often leads to confusions. Furthermore, if you do not know how...
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