Moving averages are important components of many technical indicators. The Endpoint Moving Average (EPMA) is a popular method of plotting a line that uses linear regression instead of averages, which reduces the noise of market price activity and can reveal or follow trends. Compared to a simple moving average, this method hews more closely to data and lags less. A moving average line averages prices in a given time period (such as the 30 days leading up to each day), and plots that point on a chart; when connected, the collection of points becomes the moving average line. Continue reading...
Moving averages are important components of many technical indicators. The Exponential Moving Average (EMA) uses the closing prices of all the previous trading days for a given interval to calculate an average price from that for the period, but is weighted to give the most recent days more influence over the final number. The weighted averages are plotted in a line that helps traders follow trends. Continue reading...
A weighted average is a calculation considers the relative importance or relevance of a piece of data. Weighted averages multiply numbers in the average by a predetermined factor, like time, that enhances the relevance given to the number. One example of a weighted average is the Exponential Moving Average (EMA), an alternative to the Simple Moving Average (SMA) line which gives greater weight to the more recent data. SMAs are effective in their simplicity, but their efficacy is most closely tied to how they are used. Continue reading...
The Positive Volume Index (PVI) is a technical indicator that tracks increases in trade volume for an index or security, as well as the changes in price on those days. Paul Dysart developed the original version of this indicator for market indexes using advance-decline numbers instead of prices. The Positive Volume Index was then redesigned by Norman Fosback for individual securities – the version commonly used today. Continue reading...
The Negative Volume Index (NVI) is a technical indicator that tracks decreases in trade volume for an index or security, as well as price changes on those days. Paul Dysart developed the original version of this indicator for market indexes, and it garnered renewed attention when it was reworked in the 1970s via Norman Fosback in his book Stock Market Logic. The price changes in a security or the percentage change in an index are only added to or subtracted from the Negative Volume Index on days when the trading volume is lower than the day before. By watching market movement on days with lower trading volume, investors can identify where institutions and fund managers are moving their money. If trading volume is down and the market continues to do well, it means that there is a strong bullish primary trend, and that trading volume is not artificially pushing prices around. Continue reading...
Are you searching for the best order to protect your investments? Dive into the world of trading with our comprehensive guide on stop-loss and stop-limit orders. Learn how these tools work, when to use them, and the pros and cons of each. Make informed decisions to safeguard your assets in any market conditions. Continue reading...
Whether you have $1,000 or you manage billions, the relative strength (RS) technique is a popular and useful tool for comparing one investment against the overall market. But few individuals ever manage to use the technique effectively because they fail to incorporate RS into a comprehensive trading strategy. In this article, we'll define relative strength, explain why it works, and demonstrate how individual investors can employ RS strategies. This versatile tool can be applied to stocks, exchange-traded funds (ETFs), and mutual funds. Continue reading...
VWAP, in essence, is the average price at which a security has traded throughout a trading day, and it takes both price and volume into account. MVWAP, on the other hand, is a dynamic average of VWAP values over time. While MVWAP can be used by longer-term traders, VWAP primarily focuses on intraday calculations. Both indicators offer a more accurate snapshot of price action by incorporating volume, making them invaluable for traders. Continue reading...
The world of trading is rife with a myriad of tools and indicators designed to help traders make informed decisions. One such tool is the Parabolic SAR, which stands for Stop and Reverse. Developed by J. Welles Wilder Jr., the Parabolic SAR is a technical indicator that serves as a valuable resource for traders seeking to identify trend direction, potential reversals, and optimal entry and exit points. In this article, we'll delve into the basics of the Parabolic SAR, exploring its function, interpretation, and its advantages and limitations. Continue reading...
Unlock Your Trading Potential with Adaptive Moving Averages (AMAs)! 📈 Discover how AMAs adapt to market conditions, reducing false signals and enhancing profits. Learn about their benefits and the innovative ER concept. A game-changer in trading! 🚀 #TradingStrategies #AMAs Continue reading...