Understanding Average True Range (ATR)

Average True Range – ATR

Average true range (ATR) is a technical analysis volatility indicator originally developed by J. Welles Wilder, Jr. for commodities. Unlike many of today’s popular indicators, this indicator does not provide you with a signal of price trend, merely the degree of price volatility specifically volatility caused by price gaps or limit moves. The ATR is fairly simple to calculate and only needs historical price data.

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Understanding On-balance volume (OBV)

On-balance volume (OBV) is a technical analysis indicator which is designed to correlate price and volume in the stock market. OBV measures buying and selling pressure as a cumulative indicator that adds volume on up days and subtracts volume on down days. When the security closes higher than the previous close, all of the day’s volume is considered up-volume. When the security closes lower than the previous close, all of the day’s volume is considered down-volume.

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Ichimoku Indicator : How to use Ichimoku Cloud Indicator

Ichimoku Kinko Hyo called Ichimoku is a technical analysis method that builds on candlestick charting to improve the accuracy of forecast price moves. The indicator was developed by Goichi Hosoda, a Japanese journalist. He spent 30 years perfecting the technique before releasing his findings to the general public in the late 1960s. Continue reading

Stochastic Oscillator : How to use Stochastics

Stochastics Oscillator is a momentum oscillator that helps to measure the current price in relation to its price range over a period of time. It functions as an overbought/oversold oscillator. It consists of 2 lines (%K & %D). Continue reading

Fibonacci Retracements : How to use Fibonacci Retracements

Fibonacci retracement is a method of technical analysis for determining support and resistance levels. Fibonacci retracement is based on the possibility that markets will retrace a predictable portion of a move, after which they will continue to move in the original direction. The Fibonacci retracements example can be valuable for swing traders to distinguish reversals on a stock chart. They are named after their use of the Fibonacci sequence. Continue reading

Using ADX to identify trend

Average Directional Index or ADX  is an oscillator that is used to determine the strength of a trend. It is a good indicator that gives a confirmation of trend. Since, trend is an important concept in Technical Analysis, it can be a good indicator in any Technical Analyst’s arsenal. Continue reading