Technical Indicators

versiunea 2.0
03.10.2008
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Contents
1 Price ......................................... 1
2 Charts ........................................ 1
2.1 Line, Step, Scatter, Histogram/Mountain
charts 1
2.2 Open/High/Low/Close charts (Bar Charts) ... 2
2.3 Candle charts ............................. 2
2.4 Heikin-Ashi ............................... 3
3 Studies ....................................... 4
3.1 Moving Averages ........................... 4
3.1.1 SMA - Simple Moving Average ........ 5
3.1.2 WMA - Weighted Moving Average ...... 5
3.1.3 EMA - Exponential Moving Average ... 5
3.1.4 TMA - Triangular moving averages ... 6
3.1.5 MA Envelopes - Trading bands ....... 6
3.2 Bollinger Bands ........................... 7
3.3 Chande Kroll Stop ......................... 7
3.4 DEMA - Double Exponential Moving Average .. 8
3.5 Donchian Channels ......................... 8
3.6 EMA - Exponential Moving Average .......... 9
3.7 Fibo-Gann Retracement ..................... 9
3.8 Ichi Moku ................................ 10
3.9 Keltner Channels ......................... 11
3.10 Linear Regression ........................ 12
3.10.1 Linear Regression Trend line ...... 12
3.10.2 Linear Regression Channels ........ 12
3.10.3 Linear Regression Var ............. 14
3.10.4 Standard Error Channel ............ 15
3.10.5 Linear Regression (Moving Linear
Regression) ................................ 15
3.10.6 Linear Regression Channel ......... 16
3.11 Parabolic SAR (Stop and Reverse) ......... 16
3.12 Pivot Points ............................. 18
3.13 SMA – Simple Moving Average .............. 18

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3.14 Standard Deviation Channel ............... 19

3.15 Standard. Error Channel .................. 19
3.16 TEMA – Triple Exponential Moving Average . 19
3.17 TMA - Triangular Moving Average .......... 19
3.18 Wilder’s Smoothing ....................... 19
3.19 Wilder’s Volatility System ............... 20
3.20 WMA - Weighted Moving Average ............ 20
3.21 Zig-Zag .................................. 20
3.21.1 Zig Zag -Price .................... 21
3.21.2 Zig-Zag-% ......................... 21
4 Oscillators .................................. 22
4.1 ADX / ADXR ............................... 22
4.1.1 DMI - Directional Movement Indicator
22
4.2 Aroon Indicator .......................... 23
4.3 Aroon Oscillator ......................... 23
4.4 ATR - Average True Range ................. 24
4.5 Bollinger Band Width ..................... 24
4.6 CCI - Commodity Channel Index ............ 25
4.7 Chaikin's Volatility ..................... 25
4.8 Chande Momentum Oscillator ............... 26
4.9 Change ................................... 26
4.10 DeMarker ................................. 27
4.11 DPO - Detrended Price Oscillator ......... 27
4.12 DMI- Directional Movement Indicator ...... 28
4.13 Donchian Channel Width ................... 28
4.14 Elder Ray ................................ 29
4.15 Fisher Transform ......................... 29
4.16 Heikin – Ashi Differences ................ 30
4.17 Historical Volatility .................... 30
4.18 Intraday Momentum Index .................. 31
4.19 Linear Regression Reversal ............... 31
4.20 Linear Regression Slope .................. 32

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4.21 MACD - Moving Average Convergence

Divergence ..................................... 32
4.22 Mass Index ............................... 34
4.23 Momentum ................................. 34
4.24 Percentage Price Oscillator .............. 35
4.25 Price Action Indicator / PAIN ............ 35
4.26 R-Squared ................................ 36
4.27 Rate of Change ........................... 37
4.28 RVI - Relative Volatility Index .......... 37
4.29 Repulse .................................. 38
4.30 RMI – Relative Momentum Index ............ 38
4.31 RSI / RSI Classic - Relative Strength Index
39
4.32 Stochastics .............................. 40
4.32.1 Fast Stochastic ................... 41
4.32.2 Slow Stochastics .................. 41
4.32.3 Stochastic ........................ 42
4.32.4 Stochastic Momentum Index ......... 42
4.32.5 Stochastic RSI .................... 43
4.33 TD REI ................................... 43
4.34 TRIX ..................................... 44
4.35 True Strength Indicator .................. 44
4.36 Trend Trigger Factor ..................... 45
4.37 Ultimate Oscillator ...................... 45
4.38 Williams' %R ............................. 46

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1 Price
The price of an instrument can be displayed in a number of ways
(typically as a line, bar chart, candlestick or mountain). Most
users choose Candlestick charts for the depth of information they
provide.

2 Charts
2.1 Line, Step, Scatter, Histogram/Mountain charts

Line, Step, Scatter and Histogram charts display closing prices in a

linear format to make the rising and falling of an instrument easy
to detect. In addition, Histogram charts shade the area below this
line, emphasising market peaks and troughs
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2.2 Open/High/Low/Close charts (Bar Charts)

Open/High/Low/Close charts (or Bar charts as they are better known),

show four price points for each day on a vertical line. The top and
bottom of the line represent the high and low respectively. Notches
on the left and right of the line represent the open and close
respectively.

2.3 Candle charts

Candle charts show the same information as a bar chart., with the
difference between the open and the close displayed as a solid body.
The shadows, or wicks, indicate the highest and lowest prices traded
over the same time period. The colour of the body indicates that the
close on a certain day was either above or below the market’s
opening price (typically green and red respectively).

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2.4 Heikin-Ashi

Heikin-Ashi charts appear similar to standard candlestick charts,

but use different values for each bar. The Heikin-Ashi technique
modifies the open-high-low-close (OHLC) bars of standard candlestick
charts, using Close Open High Low instead:

(Open+ High + Low + Close)

Close=
4
(Open(PreviousBar) + Close(PreviousBar))
Open =
2
High = Max (High,Open,Close)
Low = Min (Low,Open,Close)

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3 Studies
3.1 Moving Averages

One of the most popular technical analysis tools, Moving Averages

are used to determine upwards and downwards trends in the market.
By using averages, Moving Average studies smooth out short-term
fluctuations making it easier to identify general trends, and
identify potential market turning points.
Moving Averages work best in markets displaying a definite trend: be
careful when using Moving Averages in a trendless market. The
calculation lags behind the current price, and can lead to
misleading trend information. This lag is affected by the number of
events used to calculate the average, which can vary 2 / 3 events
to over 200 events.
The Moving Average studies can be divided into four main types:

• Simple (also known as Standard)

• Weighted
• Exponential
• Triangular

Selecting the correct moving average for your needs is a process of

trial and error. More than one type of MA can be shown on a chart
to make it easier to identify market trends.
Look for price moves above or below the Moving Average to indicate
when you may wish to buy or sell.

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3.1.1 SMA - Simple Moving Average

The most basic of the moving averages, the Simple Moving Average
calculates an average over a set number of days. For example, to
calculate a 10 Day Moving Average, add together the previous 10
closing prices, then divide by 10.
Compare Simple Moving Averages against an instrument’s price to
provide a basic view of a market’s trends.

3.1.2 WMA - Weighted Moving Average

Weighted Moving Averages place more emphasis on recent price changes
than the SMA. Each day’s price is given a weight depending on how
recently it occurred.
This example shows a 5 day WMA. CP=Closing Price, with CP5 being
the most recent:

(CP5x5) + (CP4 x4) + (CP3x3) + (CP2x2) + CP1

WMA =
(5 + 4 + 3 + 2 + 1)

3.1.3 EMA - Exponential Moving Average

Exponential Moving Averages consider all previous price changes when
calculating the Moving Average, with the prices weighted
exponentially. This weighting places a greater importance on recent
prices than in the WMA.
The weighting for an EMA is calculated by dividing 2 by the number
of days So, for a five day average you would use:

2
= 0.3333
5+1

To calculate an EMA, multiply the current closing price by 0.3333,

and add the previous day’s EMA multiplied by 1-0.3333. In this
example, we have used ∝ to indicate the 5 day or 0.3333 weighting:

(∝ x Today's CP) + ((1− ∝)x Yesterday

' sEMA)

If the previous day’s EMA is not known, substitute the previous 5

day Simple Moving Average.
Popular EMA charts are calculated over 12 and 26 days, and are used
with the Moving Average Convergence Divergence oscillator (MACD) and
Percentage Price Oscillator (PPO).

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DEMA - Double Exponential Moving Average

Double Exponential Moving Average (DEMA) combines a Double
Exponential Moving Average and a single EMA to produce an indicator
which is faster and smoother than a standard MA or EMA.

TEMA – Triple Exponential Moving Average

The Triple Exponential Moving Average (TEMA) combines a Treble
Exponential Moving Average, a DEMA and a single EMA. This indicator
is faster and smoother than a standard DEMA study.

3.1.4 TMA - Triangular moving averages

Triangular moving averages place more emphasis on the prices in the
middle of the period, and is equivalent to a double-smoothed SMA.
Using our five day example, day 3 would have the greatest
importance, followed by days 2 and 4.
The TMA is smoother than a Simple Moving Average, and helps identify
trends in a volatile market.

3.1.5 MA Envelopes - Trading bands

Moving Average envelopes are percentage bands placed around a Simple

Moving Average.

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3.2 Bollinger Bands

Bollinger Bands are placed at a distance of two standard deviations

from an SMA (typically over a period of 20 events). If prices follow
a normal bell curve (Gaussian distribution), 95% of the prices must
be inside the bands.
Bollinger Bands act as a measure of volatility and constitute strong
zones of support and resistance when the market is without a clear
trend. A trending market is reflected by the bands moving away from
the SMA. When the difference between the two envelopes drops, the
trend loses its force.

3.3 Chande Kroll Stop

This trend following indicator indicates the stop loss for a

position whether it be short or long by using a variation on
directional movement.

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It is calculated on the average true range of the assets volatility.

The stops are placed under (and on) the high (low) of the last “n”
bars. The difference is proportional to the average True Range on
“N” bars.
You can use it to trade in a number of ways:

• Sell when the price crosses below both lines

• Buy when the price crosses above both lines
• Or you can trade when the two lines cross each other.

Always trade in the direction of the trend. As the price moves

sideways you will note that the lines begin to flatten out and the
price will trade broadly between the two lines.

3.4 DEMA - Double Exponential Moving Average

Please see 3.1 Moving Averages for information on Double Exponential
MA studies.

3.5 Donchian Channels

Donchian Channels examine previous days trading and plot the highest
high and lowest low for each day. This is typically done for a
period of 20 days, giving the alternative name, the Four-Week Rule.
Breakouts from the channel signal long and short positions. A Long
is established when the price exceeds the highs of the previous 20
days, and a Short is established when the price falls below the lows
of the previous 20 days.

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Donchian Channels can also be used to determine the volatility of a

market. When a price is stable, the channel is narrow. As the
price fluctuates, the channel widens.

3.6 EMA - Exponential Moving Average

Please see 3.1 Moving Averages for information on Exponential MA
studies.

3.7 Fibo-Gann Retracement

This tool works on the premise that prices move up with longer
upswings and smaller downswings, which is typical in an uptrend. In
sideways markets the upswings tend to be equal in length to the
downswings.
Any downswings in an uptrend will be fraction of the length of the
primary up move and vice-versa. By using Fibonacci fractions like
0.382, 0.5 or 0.618, this tool calculates percentage retracements on
zigzags which can then be used to calculate future pivot valleys or
peaks.

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3.8 Ichi Moku

Ichimoku (from Ichimoku Kinko Hyo, literally one glance balanced

chart) is a complex charting system which can be used as part of
many trading strategies. It contains 5 lines, which each indicate an
average or price:

(HighestHigh + LowestLow)
TenkanLine = (for the pastp1periods)
2
(HighestHigh + LowestLow)
KijunLine= (for the pastp2 periods)
2
ChikouSpan= Most current closingprice (for the lastp2 periods)
(TenkanLine+ KijunLine)
SenkouSpanA = (plotted p2 periodsahead)
2
(HighestHigh + LowestLow)
SenkouSpanB = (for the pastp3 periods,plotted p2 periodsahead)
2

By default, the values used in these calculations are p1=9, p2=26,

p3=52.
The most distinctive feature of Ichimoku is Kumo (literally, Cloud),
the area between Senkou Span A and Senkou Span B. This feature is
given its name by the appearance of this area when shaded.

Using Ichimoku
Typically, a buy signal is generated when the Tenkan Line crosses
the Kijun Line from below. A sell signal is generated when the
Tenkan Line crosses the Kijun Line from above.
Kumo indicates support and resistance levels. If the price is above
the cloud, the overall trend is bullish; if the price is below the
cloud, the overall trend is bearish.

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Unlike typical support or resistance indicators, Kumo has depth,

which indicates how likely it is for a price to break through the
cloud.

3.9 Keltner Channels

Keltner Channels show two channel lines drawn a defined distance

above and below a central moving average.
The centre line is a 10 day SMA of typical price (that is, the
average of each day’s high, low and close prices). The distance
between the channel lines and the central line is the SMA of the
past 10 days' trading ranges (that is, the range between the high
and low price for each day).
Keltner Channels were described by Chester W. Keltner in his book
How To Make Money in Commodities, where they were known as the Ten-
Day Moving Average Trading Rule

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3.10 Linear Regression

3.10.1 Linear Regression Trend line

Linear Regression is a mathematical way of identifying the

relationships between independent and dependent variables (in
trading, this would be price and period). This is shown by the
trend line, a straight line which represents the best fit between
the data points.

3.10.2 Linear Regression Channels

Linear Regression Channels are obtained by drawing parallel lines
either side of the Linear Regression line. The distance for this
line is determined by the type of channel to be created.
Linear Regression channels are used to indicate possible price
fluctuations. The top line shows resistance and the bottom shows
support. Ordinarily, prices will be contained within the channel,
and while you may see prices temporarily crossing these lines,
longer periods outside the channel indicate the current trend may
reverse.

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Linear Regression Channel 100%

The Linear Regression Channel 100% uses parallel lines drawn two
standard deviations from the Linear Regression line.

Linear Regression Channel. 50%

The Linear Regression Channel 50% uses parallel lines drawn one
standard deviation from the Linear Regression line.

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Standard Deviation Channel

The Standard Deviation Channel uses parallel lines drawn a specified

number of standard deviations from the Linear Regression line.

3.10.3 Linear Regression Var

Linear Regression Var combines the Linear Regression line and the
Linear Regression Channel 100% lines.

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3.10.4 Standard Error Channel

The Standard Error Channel uses parallel lines drawn a specified

number of standard errors from the Linear Regression.

3.10.5 Linear Regression (Moving Linear Regression)

Also known as the Moving Linear Regression indicator or Time Series

Forecast, the Linear Regression line plots the path of endpoint
values for previous Linear Regression trend lines over a specified
period.
Although the moving Linear Regression indicator looks like an SMA,
it is much more reactive to changes in the market. It can also be
used to forecast future prices, using the trend of the prices over
the analysis period to predict the next period’s price.

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3.10.6 Linear Regression Channel

The Linear Regression channel is similar to a Bollinger Bands study,

in that lines are placed around the moving Linear Regression line,
at a distance of two standard deviations.
An instrument’s price touching the upper or lower lines of a Linear
Regression channel can be taken as a signal to buy or sell.

3.11 Parabolic SAR (Stop and Reverse)

Parabolic SAR is used to find trends, and works on the assumption

that the longer a trend continues, the more likely it is to reverse.
The methods used to calculate the SAR points accelerate the curve
towards the price each time a new high is reached.

Parabolic SAR Calculations

The parameters typically used by Parabolic SARs are:

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initial acceleration factor : 0.02

addition factor : 0.02
acceleration factor limit : 0.2

The amount by which the stop moves up or down is a function of:

• Extreme Point (EP) = the most favourable price reached

since the trade was initiated. (I.e. The highest high
when long or the lowest low when short).
• Acceleration Factor (AF). The AF value starts at 0.02
and is increased by 0.02 each time a new EP for the trade
is made until it reaches 0.2
Three situations are encountered during a trend period and usually
occur in the following order:

• Both the values of EP and AF increase. Every time a new

EP is reached for the trade, AF is increased by 0.02. As
the AF increases, the SAR curve begins to move faster
towards the price.
• The EP value increases and AF has reached its maximum
value of 0.2. The SAR is then a function of price only.
• The values of both EP and AF are constant. No new EP (no
higher high or lower low) is made for the trade (AF value
is not increased). The trend falters and the result is
usually that the SAR curve catches up with the price
action.

Using Parabolic SAR

During a trend, SAR direction remains the same. If the parabola is
below the price, the trend is bullish; if the parabola is above the
price, the trend is bearish.
It is important to note that the SAR moves only in the direction in
which the trade has been initiated. If long, the stop will move up
every day; if short, the stop will move down (regardless of the
direction any price movement).
When a new trade is initiated, the initial SAR is the previous
trade's extreme point (EP), allowing time for the trend to
materialise. If the trend fails to materialise, then the system is
stopped and the position reversed. Prices passing a SAR point
indicate that your position should be liquidated.
The Parabolic SAR is of most use while a market is trending. During
non-trending periods it tends to get whipsawed. One method of

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reducing this is to use the Parabolic SAR in conjunction with the

Directional Movement Indicator.

3.12 Pivot Points

Pivot Points indicate when a market is likely to reach the point at

which it changes direction, enabling you to take action. The chart
indicates two support and resistance levels.
The pivot point (P) is calculated as being:

High + Low + Close

P=
3

The first Support (S1) and Resistance (R1) levels are:

S1= (2P) − High

R1= (2P) − Low

The secondary Support (S2) and Resistance (S2) levels are:

S2 = P − (High − Low)
R2 = P + (High − Low)

3.13 SMA – Simple Moving Average

Please see 3.1 Moving Averages for information on Simple Moving
Average studies.

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3.14 Standard Deviation Channel

Please see 3.1 Moving Averages for information on Standard Deviation
Channels

3.15 Standard. Error Channel

Please see 3.1 Moving Averages for information on Standard Deviation
Channels

3.16 TEMA – Triple Exponential Moving Average

Please see 3.1 Moving Averages for information on TEMA studies.

3.17 TMA - Triangular Moving Average

Please see 3.1 Moving Averages for information on Triangular MA
studies.

3.18 Wilder’s Smoothing

Wilder’s Smoothing calculates a moving average similar to the

Exponential Moving Average, but with a weighting system devised by
Welles Wilder.

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3.19 Wilder’s Volatility System

Wilder’s Volatility tracks True Range over a defined time period.

True Range is the greatest value of the differences between:

•·Thisperiod' sHigh andLow

•·Thepreviousperiod' sCloseand this period' sHigh
•·Thepreviousperiod' sCloseand this period' sLow

More than one day’s range is needed to meaningfully track

volatility. Use an average of the daily True Range over a number of
days. Wilder used a value of 14 to give the best indicator of
volatility over time.

3.20 WMA - Weighted Moving Average

Please see 3.1 Moving Averages for information on Weighted MA
studies.

3.21 Zig-Zag
Zig-Zag indicators highlight trend reversals. By eliminating
smaller fluctuations, they display the most relevant price
movements.
Be aware that the last line plotted on a Zig-Zag chart reflects
current prices, and can change depending on market movement. As a
result, Zig-Zag indicators should be used for their hindsight – they
should not be used to predict future trends.

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3.21.1 Zig Zag -Price

Zig-Zag Price uses price when calculating the trend line.

3.21.2 Zig-Zag-%

Zig-Zag % uses a defined percentage value when calculating the trend

line.

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4 Oscillators
4.1 ADX / ADXR

The Average Directional Index (ADX) is used when determining the

strength of the current trend. Knowing if a market is trending, or
if it is moving sideways (trading) is useful when selecting which
indicators to use.
ADX is a moving average of DMI and has a scale of 0 to 100, but
readings tend to be below 60. Weak trends are indicated by readings
below 20, and strong trends tend to be above 40. Markets are said
to be trending when ADX or ADX rises above 17 or 23. When ADX falls
below ADXR, a trend is almost complete.
Please be aware that these strong trends may be downtrends as well
as uptrends – we are monitoring the strength of the trend, not its
direction.

4.1.1 DMI - Directional Movement Indicator

The DMI identifies when trends are present. It is used in the
calculations for ADX, which is a moving average of DMI.

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4.2 Aroon Indicator

The Aroon up and the Aroon down indicators fluctuate between zero
and 100. Strong trends are indicated by values close to 100; weak
trends are indicated by values close to 0.
Use the Aroon indicator to identify trends. Uptrends are indicated
by the Aroon Up staying above 70 and the Aroon Down staying below 30
(and the opposite for a downtrend). A new trend is signalled when
the Up and Down lines cross.

4.3 Aroon Oscillator

The Aroon oscillator. Is calculated by subtracting Aroon down from

Aroon up, with a range between -100 and 100. Readings above the
central zero point indicate that an uptrend. A downtrend is
indicated by readings below zero.

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4.4 ATR - Average True Range

ATR represents the volatility of an instrument.

True Range is the greatest value of the differences between:

•·Thisperiod' sHigh andLow

•·Thepreviousperiod' sCloseand this period' sHigh
•·Thepreviousperiod' sCloseand this period' sLow

Apply a moving average to calculate the Average True Range.

This indicator of volatility measures selling pressure and buying
pressure. As the ATR rises there is strong volatility. When the ATR
decreases there a low volatility.

4.5 Bollinger Band Width

upper band - lower band

Moving Average

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If the Bollinger Band Width indicator rises, the market is forming a

trend. When the indicator declines, the trend is finishing. In a
market with no clear trend use Bollinger Bands.

4.6 CCI - Commodity Channel Index

The Commodity Channel index is used to monitor instruments which

have clear cyclical patters. It does not identify the length of
cycles, instead indicating when cycles begin and identifying entry
points when breakouts occur.
When the CCI rises above +100, it is a bullish signal. When it
falls below -100, it is a bearish signal.

4.7 Chaikin's Volatility

Chaikin’s Volatility compares the range between an instrument’s high

and low prices to measure the volatility of an instrument.
As a market peaks, it is likely that there will be increased
volatility, which may indicate a change in trend. Conversely, as a

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market bottoms it is likely that volatility will decrease while

fewer trades are being placed.

4.8 Chande Momentum Oscillator

The Chande Momentum Oscillator is similar to RSI, monitoring

overbought and oversold situations.
Scaled between -100 and 100, buy signals occur when the oscillator
passes -50, and sell signals when the oscillator passes +50.

4.9 Change

This indicator plots the change between the current bar and the
previous bar

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4.10 DeMarker

The DeMarker compares a period high against the previous period’s

high to measure the demand of the underlying instrument. Unlike many
other oscillators, DeMarker does not use smoothed data.
When the DeMarker indicator is below 0.3, an upwards trend is
predicted. When the indicator is above 0.7, a downwards trend is
predicted. It also measures the risk levels of a trade, with values
above.0.6 indicating prices are less volatile, and below 0.4
indicating an increased risk.

4.11 DPO - Detrended Price Oscillator

The Detrended Price Oscillator compares price to a previous Moving

Average. It isolates short term cycles, disregarding cycles longer
than the time frame of the moving average. Estimate the maximum
length of cycle you wish to track, then use half this period for
your Moving Average.
The DPO can be used to identify turning points in longer cycles.
When it shows a higher peak, there is likely to be an upturn.

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Conversely, when there is a lower trough, there is likely to be a

downturn.

4.12 DMI- Directional Movement Indicator

Please see 4.1 ADX / ADXR for information on DMI Oscillators.

4.13 Donchian Channel Width

This is an indicator that displays the width of the upper and lower
Donchian channels. This indicator is designed to catch trends and
unlike the Donchian Channel is displayed below the chart – low
values indicate a trendless market but increasing values indicate a
market that is starting to trend.

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4.14 Elder Ray

The Elder-Ray oscillator provides a simple way to compare the highs

and lows of a day to a smoothed average (EMA). It provides an
insight into bullish and bearish attitudes to the instrument
If a Bear Power is shown as positive and rising, the market can be
considered bullish; conversely, if Bull Power is shown as negative
and falling, the market is bearish.

4.15 Fisher Transform

The Fisher Transform is used to identify major market turning

points. It uses the assumption that while prices do not have normal
bell-curve characteristics you can create a Gaussian probability
density by normalising price and applying the Fisher Transform. The
oscillator indicates peak fluctuations which can be used to
determine potential reversals.

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4.16 Heikin – Ashi Differences

This oscillator displays the difference between the previous Heikin-

Ashi candle and the current underlying price.

4.17 Historical Volatility

Historical Volatility measures price fluctuation over time. It is

used to determine the volatility of a market.
Historical price data is used to determine the actual volatility of
an instrument (rather than predict future volatility). The
calculation determines the average deviation from the average price
over the specified period.

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4.18 Intraday Momentum Index

The Intraday Momentum Index combines the RSI oscillator and

candlestick analysis. The IMI is calculated in the same way as RSI,
but instead of using averages, it uses the relationship between the
day’s open and close prices to determine whether a day is up or
down.
Like a candle, if it closes above the open it is an up day and vice
versa. As with the RSI overbought and oversold conditions are
indicated by values above 70% and below 30%.

4.19 Linear Regression Reversal

This binary indicator shows +1 when price goes up and -1 when price
goes down, changing direction when the price is lower (or higher)
than the previous price.
This indicator provides long and short signals. +1 is a long
position, -1 is short.

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4.20 Linear Regression Slope

The Linear Regression Slope shows how much prices are expected to
change per unit of time. Use this indicator with R-Squared to
determine possible trend changes.

4.21 MACD - Moving Average Convergence Divergence

MACD shows the MACD line (the difference between a fast and a slow
EMA) and a Signal line (a moving average of the MACD line), together
with a histogram which is simply the difference between the MACD and
the Signal.
A positive MACD value is considered bullish, and a negative value is
considered bearish.
Entry and exit points are indicated when the signal line crosses the
MACD line. You can predict when this is likely to happen by the
shape of the histogram.
Divergences between the histogram and price can be used to identify
reversals.

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MACD Simplified

This indicator is the same as the MACD indicator, but shows only the
indicator lines.

MACD Histogram

This indicator is the same as the MACD indicator, but shows only the
histogram.

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4.22 Mass Index

The Mass Indicator detects trend reversals. Based on the difference

between high and low, the Mass Index increases and decreases in line
with volatility. Mass Index is best used with a 9 day EMA.

4.23 Momentum

The Momentum oscillator is calculated by subtracting a previous

close price from the current close price. The distance between
these two events is configurable.
Momentum should not be used to indicate whether an instrument has
been overbought or oversold. However, you can consider buy and sell
opportunities as it crosses the 0 mid point. It also gives good
divergence indicators.

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4.24 Percentage Price Oscillator

The Percentage Price oscillator shows the relationship between two

moving averages.
It is calculated by subtracting the 26 day EMA from the 9 day EMA.
This difference is then divided by the 26 day EMA. The resulting
percentage gives an indication of the position of the short term
average in relation to the longer term average.
The PPO is very similar to the MACD, with the PPO expressing the
difference between the two EMAs as a percentage rather than as a
simple difference.

4.25 Price Action Indicator / PAIN

The Price Action Indicator (PAIN) provides a lot of helpful

information from today's open, high, low and close, using the
formula:

(C − O) + (C- H) + (C- L)
2

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• (C-O) defines momentum plus or minus

• (C-L) defines late selling pressure
• (C-H) defines late buying pressure

The instrument’s price is under selling pressure if the Close is

near the Low, and under buying pressure (that is, there are more
buyers than sellers) if the Close is near the High. A high PAIN
value with the Close near the High identifies an excellent potential
long, if the overall market conditions stay positive.

4.26 R-Squared

The R Squared indicator confirms trends, and should be used with the
Linear Regression Slope, which indicates trend direction.
When the Linear Regression Slope and R-Squared rises above the 0
during an up, the trend is confirmed.

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4.27 Rate of Change

Rate of change divides the day’s price with that of a previous,

specified, day.
Similar to Momentum, this oscillator indicates overbought and
oversold. Consider buy and sell opportunities as it crosses 0.

4.28 RVI - Relative Volatility Index

The Relative Volatility Index is similar to the RSI. Instead of

using daily price change, it shows standard deviation over a
specified period (typically, the past 10 days).
The indicator measures the direction of volatility on a scale from
zero to 1. Readings >0.5 indicate that the volatility is more to the
upside. Readings <0.5 indicate that the direction of volatility is
to the downside.

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4.29 Repulse

Repulse represents the push contained in each candlestick, and

offers information on the feeling and confidence that traders have
about the markets. It is not related to price movement in the same
way as RSI, MACD or the stochastic indicators.

4.30 RMI – Relative Momentum Index

The Relative Momentum Index is similar to the RSI. Instead of

calculating from one close period to another, the RMI examines the
differences between one close and another a specified number of
periods ago.
RMI indicates overbought / oversold situations. Buy signals are
triggered when the RSI crosses the 30 level and sell signals are
triggered when the RSI crosses the 70 level.

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4.31 RSI / RSI Classic - Relative Strength Index

This indicator compares the price of an instrument to the

instrument’s previous performance. This figure is calculated from
the average closing price from an up day versus the average closing
price from a down day over a specified period. The exact formula for
this average differs for classic and standard RSI oscillators:
RSI indicates overbought / oversold situations. Buy signals are
triggered when the RSI crosses the 30 level and sell signals are
triggered when the RSI crosses the 70 level.
RSI is always scaled between 0 and 100.
The RSI and RSI Classic are known as ‘smoothed’ oscillators. This
differs to other oscillators, such as Momentum or MACD, which can
reflect previous erratic price movements, even in a currently stable
market.

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4.32 Stochastics

Stochastic oscillators are momentum indicators used to compare an

instrument’s closing price to its price range over a specified
period. They use the basic assumptions that in an uptrend, today’s
closing price is likely to be close to the highest recent close
price, and that in a down trend, today’s closing price is likely to
be close to the lowest recent close price.
Stochastic oscillators display two lines, %K, the Percentage Alert
line, and %D, the Percent Definite line. The Percentage Alert line
%K measures on a percentage basis the last closing price within the
price range of a defined period. The Percent Definite line %D is a
moving average of %K.
Overbought and oversold situations are indicated by the 25% and 80%
lines. Divergences between %D and the underlying price when %D is
in the overbought or oversold area are a signal to buy or sell.

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4.32.1 Fast Stochastic

The Fast Stochastic is calculated using the average of the last

three %K.

4.32.2 Slow Stochastics

The Slow Stochastic indicator removes false signals to provide a

smoother view of the market. It uses a new %Dn line which replaces
%K. %Dn is the moving 3 day average of %D.

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4.32.3 Stochastic

The Stochastic indicator is calculated using a defined value for the

moving average. A value of 1 is equivalent to a Fast Stochastic, a
value of 3 is equivalent to a Slow Stochastic.

4.32.4 Stochastic Momentum Index

The Stochastic Momentum Index shows the position of the close price
in relation to the median point (as opposed to the highest and
lowest points of a normal Stochastic). It is double smoothed with
an Exponential Moving Average to produce a consistent signal.
The SMI gives good divergence signals. Sell signals are given when
the instrument price reaches new highs, but the SMI does not.
Conversely, buy signals are given the instrument price reaches new
lows, but the SMI does not.

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4.32.5 Stochastic RSI

This oscillator is used to identify overbought and oversold readings

in the RSI indicator, providing an alternative method of identifying
extremes over 70 and under 30.

4.33 TD REI

TD REI monitors oversold and overbought conditions. An instrument

can be considered overbought if the oscillator passes +45 (or
higher), it is oversold if the oscillator passes -45 (or lower).

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4.34 TRIX

TRIX is a momentum indicator that displays the percent rate-of-

change of a TEMA of an instrument's closing price. It keeps you in
trends equal to or shorter than the specified periods
TRIX oscillates around zero. Buy when TRIX rises above zero; sell
when TRIX falls below zero.

4.35 True Strength Indicator

The True Strength Index (TSI) is a momentum-based indicator which is

used to define trends and identify oversold / overbought conditions.
A version of the Relative Strength indicator, it uses a double
smoothed EMA to can identify trend shifts with little or zero lag.
An increasing True Strength value demonstrates increasing momentum
in the direction of the price movement.

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4.36 Trend Trigger Factor

This indicator measures buying and selling power in an up or down

trend. Monitor a trend until you see weakness, when you can change
your position.
The Trend Trigger Factor measures the average range of 15 events
over two time periods (for example, days 1 to 15, and days 16 to 30)

4.37 Ultimate Oscillator

The ultimate oscillator combines information for three different

time periods (initially 7, 14 and 21 days) into one number. The
oscillator moves between 0 – 1, with a centre line of 0.5. 0.7
indicates overbought, and 0.3 indicates oversold.

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4.38 Williams' %R

Williams %R measures previous close values in relation to a

specified price range. It is similar to the Stochastic oscillator,
and is used to identify overbought and oversold levels.
Unlike the Stochastic oscillator, the scale is reversed, so a
reading below 20% indicates an instrument has been overbought, and
above 80% indicates it has been oversold.

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