In technical analysis, trading indicators can be categorized into three main categories as follows:
1. Leading indicators
This type of indicators tend to give traders buy or sell signals before market makes its turn. the leading indicators predict a top or a bottom of a market but they do not predict specific price levels or duration of [...]
Posts Tagged ‘Indicator’
Types of Indicators
Posted by Taro on June 23rd, 2010
Trading Strategy Design – Testing & Trading the Strategy
Posted by Taro on June 9th, 2010
Once you have designed all of components the strategy, you may then want to test it. In order to test a strategy, you have to test each part by adding it to the strategy one at a time, to see if there is improvement and, if so, how much.
Trading Strategy Design – Using Stops
Posted by Taro on June 8th, 2010
The only purpose for using Stops is to protect your capital. They are used either to cut losses or to protect profits. Stops are usually based on some dollar figure rather than a market indicator or price pattern.
A characteristic that stops share with exits is they force the strategy out of the market, which then [...]
Trading Strategy Design – Using Exits
Posted by Taro on June 8th, 2010
Usually, most trading strategies start with defining a signal to take a position in the market. To design the signal we use set-up and entry which have been described in earlier articles.
For the exits, in theory, we may use reversing of signal to define the exit. For example, if you use trend-following strategies and you [...]
Trading Strategy Design: Indicators and Price Patterns
Posted by Taro on June 2nd, 2010
Getting to know indicators and price patterns is the next step in designing trading strategy after making decisions on type of market and time frame to trade.
Sideways Patterns
Posted by Taro on May 18th, 2010
The stocks’ price simply moves in three directions; up, down and sideways. For the stocks that move in sideways, the movement of price is not trending and can be divided into three basic categories: trading in a range, congestion and consolidation.
Posted in Technical Analysis 
Tags: Chart Pattern, Indicator, Price Pattern, Technical Analysis 
No Comments »Begin oscillator trading from RSI
Posted by Taro on May 12th, 2010
What is the oscillator?
An oscillator is a technical indicator that tells at a glance whether a security currently trades in an “overbought” or “oversold” condition.
Posted in Technical Analysis Tags: Forex Indicator, Indicator, MetaStock Indicator, Trading Volume No Comments »Volume : Another Important Indicator
Posted by Taro on May 12th, 2010
I wrote about trading volume and how to use it in trading before. Here, we will extend to the application of volume as an indicator in trading. Let’s see how we apply volume as a technical indicator.
Volume plays an important role as an indicator traders use to indicate price direction. Interpretation of volume signals will [...]
Posted in Technical Analysis Tags: Forex Indicator, Indicator, MetaStock Indicator, Trading Volume No Comments »Basics of Stochastic Indicator
Posted by Taro on May 10th, 2010
The Stochastic Oscillator is an overbought/oversold indicator developed by Dr. George Lane. The stochastic is a common indicator that is integrated into every charting software including MetaStock.
Put simply, the Stochastic Indicator (SI) is a price oscillator which compares today’s price to its price range over a specific period of time. For example a 14-day SI, [...]
Posted in Technical Analysis Tags: Forex Indicator, Indicator, MetaStock Indicator, Stochastic No Comments »Forecast Price using Pivot Point Analysis – Part 2
Posted by Taro on October 5th, 2009
The basis of pivot point formulas, which traders use to calculate pivot point numbers, involves several steps. Traders should be able to interpret the rationale behind the calculations.
According to the traditional formula, the pivot point is considered as the average of the previous session’s trading range combined with the closing. The support and resistance levels [...]
