Pivot Point Trading: How to use Pivot Points in Intraday Trading

Pivot Points are theoretical support and resistance levels based on the previous day’s open, high, low and close values: PP,R1,R2,R3,S1,S2,S3. PP is the Pivot Point, R1,R2,R3 are resistance levels, and S1,S2 and S3 are support levels. They are only valid as support and resistance levels for intraday trading. Pivot Levels can be calculated based on Classic, Camarilla or Woodie based formulae. Continue reading

Using Multiple indicators to reduce false signals

In a previous post, we had explained about the two main type of technical indicators: oscillators and trending indicators, giving an example of an oscillator (RSI) and a trending indicator (EMA) and shown the reader how the Buy/Sell signals occur in each. Each of the indicators have there pros and cons, but which one is better to use? Rather than using one or the other, in this blog post we will talk about a strategy where we show how a combination of an oscillator and a trending indicator can be used to greatly minimize false signals. Continue reading

Importance of Trend in Technical Analysis

Trend is one of the most important concepts to understand in Technical Analysis and this post explains why. Trend is defined in Technical Analysis as the direction of the market and can be of three types: uptrend, downtrend and sideways trend. If the direction of the market is upward, the market is said to be in an uptrend; if it is downward, it is in a downtrend and if you can classify it neither upward nor downward or rather fluctuating between two levels, then the market is said to be in a sideways trend. Continue reading

About Oscillating and Trending Indicators

Often times, I find traders use technical indicators and follow their Buy/Sell signals blindly, without really understanding how that indicator is to be used. One of the first thing you have to know when you use an indicator is to know what category it falls in. The majority of indicators out there are either the oscillating or trending type. Continue reading