The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of price movements. According to its developer J. Welles Wilder, RSI is considered overbought when above 70 and oversold when below 30. In Addition Signals can also be generated by looking for divergences, failure swings and centerline crossovers.
The Stochastic Oscillator is a momentum indicator that shows the location of the close relative to the high-low range over a set number of periods. It follows the speed or the momentum of price. As a rule, the momentum changes direction before price. And thus reversals can be predicted shortly after bullish and bearish divergences in the Stochastic Oscillator. Signals are generated by overbought and oversold readings.
Williams %R signal
Williams %R (Named after its creator Larry Williams) is a momentum indicator that is the inverse of the Fast Stochastic Oscillator. It reflects the level of the close relative to the highest high for the look-back period. As opposed to Stochastic Oscillator which reflects the level of the close relative to the lowest low. Similarly Signals are generated by overbought and oversold readings.
The Moving Average Convergence/Divergence oscillator (MACD) is one of the simplest and most effective momentum indicators available. The MACD turns two trend-following indicators, moving averages, into a momentum oscillator by subtracting the longer moving average from the shorter moving average.
As a result, the MACD offers the best of both worlds: trend following and momentum. The MACD fluctuates above and below the zero line as the moving averages converge, cross and diverge.
Bollinger Band signal
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A band plotted two standard deviations away from a simple moving average, developed by famous technical trader John Bollinger.
Because standard deviation is a measure of volatility, Bollinger Bands® adjust themselves to the market conditions. When the markets become more volatile, the bands widen (move further away from the average), and during less volatile periods, the bands contract (move closer to the average). The tightening of the bands is often used by technical traders as an early indication that the volatility is about to increase sharply.
This is one of the most popular technical analysis techniques. The closer the prices move to the upper band, the more overbought the market, and the closer the prices move to the lower band, the more oversold the market.
Triple Exponential Average – TRIX is a momentum indicator used by technical traders that shows the percentage change in a triple exponentially smoothed moving average. TRIX does excellent filtration of market noise and has a tendency to be a leading than lagging indicator. It filters out market noise using the triple exponential average calculation, thus eliminating minor short-term cycles that indicate a change in market direction.
Money Flow Index – MFI is a momentum indicator that uses a stock’s price and volume to predict the reliability of the current trend.
MFI is based on RSI but takes into account the market volume thus better forecasting trend strength. In the industry it is sometimes referred as volume-weighted RSI.
Average Directional Index – ADX is an indicator used as an objective value for the strength of trend.
ADX is mainly used to plot the strength of the trend, and not its direction, so it is best used with a direction indicator. In this case DMI (Directional Movement Indicators) are used to plot the direction and the ADX for strength.
A strong ADX signal indicates that the ADX value is low ADX indicating that a pattern congestion has stored a tremendous amount of potential energy.
Change Momentum Oscillator – CMO is a technical momentum indicator invented by the technical analyst Tushar Chande. It is created by calculating the difference between the sum of all recent gains and the sum of all recent losses and then dividing the result by the sum of all price movement over the period. This oscillator is similar to other momentum indicators such as the Relative Strength Index and the Stochastic Oscillator because it is range bounded (+100 and -100).
The security is deemed to be overbought when the momentum oscillator is above +50 and oversold when it is below -50. Many technical traders add a nine-period moving average to this oscillator to act as a signal line. Bullish signals are generated when the oscillator crosses above the signal, and bearish signals are generated when the oscillator crosses down through the signal.
Ultimate Oscillator signal
Ultimate Oscillator is a technical indicator invented by Larry Williams that uses the weighted average of three different time periods to reduce the volatility and false transaction signals that are associated with many other indicators that mainly rely on a single time period.
This is a range-bound indicator, which means the value fluctuates between 0 and 100. Similar to the RSI, levels below 30 are deemed to be oversold, and levels above 70 are deemed to be overbought. Transaction signals are derived by finding situations where the price is going in opposite directions than the indicator. Once this divergence has been identified the trader will wait to confirm the transaction by using other technical indicators.
Kaufman’s Adaptive Moving Average signal
Kaufman’s Adaptive Moving Average (KAMA) is a moving average designed to account for market noise or volatility. KAMA will closely follow prices when the price swings are relatively small and the noise is low. KAMA will adjust when the price swings widen and follow prices from a greater distance. This trend-following indicator can be used to identify the overall trend, time turning points and filter price movements.
Parabolic SAR signal
The parabolic SAR is a technical indicator that is used by many traders to determine the direction of an asset’s momentum and the point in time when this momentum has a higher-than-normal probability of switching directions.