Computer analysis / Indicators and oscilators
- Accumulation/distribution of volume (Volume Accumulation VA)
- On Balance Volume
- Bollinger Bands
- Directional system (ADX)
- The indicator of Demark (DeMarker)
- Envelope (TRADING BANDS)
- DIRECTIONAL MOVEMENT (Directional Movement System)
- Volume Oscillator
- Relative Strength Index (RSI)
- OsMA (Oscillator Moving Average)
- Parabolic Time/Price System (Parabolic SAR)
- Price Rate-Of-Change (ROC)
- Moving Average
- Median price
- Positive Volume Index (PVI)
- Standard Deviation
- Stochastic Oscillator
- Moving Average Convergence/Divergence (M A C D)
- Commodity Channel Index (CCI)
- Williams %R
Volume Accumulation (VA)
Chaikin`s indicator of accumulation/distribution was developed by two authors, M. Chaikin and D. Lambert. This indicator is alternative to the indicator OBV, as VA also takes into consideration the volume of tenders, however the distinctions of indicators are in the form of setting of prevailing bull or bear moods.
On Balance Volume
On Balance Volume (OBV) is a momentum indicator that relates volume to price change. On Balance Volume was developed by Joe Granville and originally presented in his book New Strategy of Daily Stock Market Timing for Maximum Profits.
Bollinger Bands are similar to moving average envelopes. The difference between Bollinger Bands and envelopes is envelopes are plotted at a fixed percentage above and below a moving average, whereas Bollinger Bands are plotted at standard deviation levels above and below a moving average. Since standard deviation is a measure of volatility, the bands are self-adjusting: widening during volatile markets and contracting during calmer periods. Bollinger Bands were created by John Bollinger.
Directional system (ADX)
Directional system was developed by J. Wilder in the middle of 1970s as an addition to the system PARABOLIC SAR, and then it was advanced by a number of the analysts. ADX defines the tendency and shows, whether it moves quickly enough to follow it. ADX helps to take benefit, being still in the middle of important trends.
The indicator of Demark (DeMarker)
The indicator of Demark is based on the comparison of the period maximum with the previous period maximum. The received maxima are summarized.
ENVELOPES (TRADING BANDS)
An envelope is comprised of two moving averages. One moving average is shifted upward and the second moving average is shifted downward.
The Momentum indicator measures the amount that a security's price has changed over a given time span.
The Accumulation/Distribution is a momentum indicator that associates changes in price and volume. The indicator is based on the premise that the more volume that accompanies a price move, the more significant the price move.
The Directional Movement System helps determine if a security is "trending." It was developed by Welles Wilder and is explained in his book, New Concepts in Technical Trading Systems.
Volume is simply the number of shares (or contracts) traded during a specified time frame (e.g., hour, day, week, month, etc). The analysis of volume is a basic yet very important element of technical analysis. Volume provides clues as to the intensity of a given price move.
Relative Strength Index
The Relative Strength Index (RSI) is a popular oscillator. It was first introduced by Welles Wilder in an article in Commodities (now known as Futures) Magazine in June, 1978. Step-by-step instructions on calculating and interpreting the RSI are also provided in Mr. Wilder's book, New Concepts in Technical Trading Systems.
The name "Relative Strength Index" is slightly misleading as the RSI does not compare the relative strength of two securities, but rather the internal strength of a single security. A more appropriate name might be "Internal Strength Index." Relative strength charts that compare two market indices, which are often referred to as Comparative Relative Strength.
OsMA (Oscillator Moving Average)
OsMA - generally, the difference between oscillator and smoothing of oscillator. In this case, the basic line of MACD is used as oscillator, and signal line of MACD as smoothing.
PVI (Positive Volume Index)
The Positive Volume Index (PVI) focuses on days where the volume increased from the previous day. The premise being that the "crowd" takes positions on days when volume increases.
The Parabolic Time/Price System, developed by Welles Wilder, is used to set trailing price stops and is usually referred to as the "SAR" (stop-and-reversal). This indicator is explained thoroughly in Wilder's book, New Concepts in Technical Trading Systems.
The Price Rate-of-Change (ROC) indicator displays the difference between the current price and the price x-time periods ago. The difference can be displayed in either points or as a percentage. The Momentum indicator displays the same information, but expresses it as a ratio.
A Moving Average is an indicator that shows the average value of a security's price over a period of time. When calculating a moving average, a mathematical analysis of the security's average value over a predetermined time period is made. As the security's price changes, its average price moves up or down.
There are five popular types of moving averages: simple (also referred to as arithmetic), exponential, triangular, variable, and weighted. Moving averages can be calculated on any data series including a security's open, high, low, close, volume, or another indicator. A moving average of another moving average is also common.
The only significant difference between the various types of moving averages is the weight assigned to the most recent data. Simple moving averages apply equal weight to the prices. Exponential and weighted averages apply more weight to recent prices. Triangular averages apply more weight to prices in the middle of the time period. And variable moving averages change the weighting based on the volatility of prices.
The Median Price indicator is simply the midpoint of each day's price. The Typical Price and Weighted Close are similar indicators
Sto.chas.tic (sto kas'tik) adj. 2. Math. designating a process having an infinite progression of jointly distributed random variables. Webster's New World Dictionary The Stochastic Oscillator compares where a security's price closed relative to its price range over a given time period.
Moving Average Convergence/Divergence (M A C D)
The MACD (Moving Average Convergence/Divergence) is a trend following momentum indicator that shows the relationship between two moving averages of prices. The MACD was developed by Gerald Appel, publisher of Systems and Forecasts.
The MACD is the difference between a 26-day and 12-day exponential moving average. A 9-day exponential moving average, called the "signal" (or "trigger") line is plotted on top of the MACD to show buy/sell opportunities. (Appel specifies exponential moving averages as percentages. Thus, he refers to these three moving averages as 7.5%, 15%, and 20% respectively.)
Commodity Channel Index
The Commodity Channel Index (CCI) measures the variation of a security's price from its statistical mean. High values show that prices are unusually high compared to average prices whereas low values indicate that prices are unusually low. Contrary to its name, the CCI can be used effectively on any type of security, not just commodities. The CCI was developed by Donald Lambert.
Williams' %R (pronounced "percent R") is a momentum indicator that measures overbought/oversold levels. Williams' %R was developed by Larry Williams.