Price overextension remains a widely misunderstood concept in trading, causing both novice and seasoned traders to make errors in their decision-making. This misinterpretation often leads to placing trades in the wrong direction or, equally detrimental, overlooking profitable opportunities. In essence, price overextension signifies that the market has undergone a...
The Relative Strength Index (RSI) - is a popular technical indicator used by traders to identify overbought and oversold conditions in the market. The RSI with a period of 4 is a shorter-term version that can provide more frequent signals. I use RSI 4 effectively following these steps: Understanding RSI Basics: The RSI measures the strength and speed of...
Hello, it's Stock Justice here! In our latest video, we delve into the world of the Dynamic Fusion Oscillator (DFO) - a tool that blends the power of the Relative Strength Index and the Stochastic Oscillator. I walk you through how it works, from understanding these two base components to how we fuse them to create a balanced and sensitive tool for identifying...
Primary Chart: Tips to Help Demystify the RSI Introduction to Momentum Indicators Many indicators exist for technical analysis. And a number of them focus on momentum, which is distinguishable from other core technical concepts such as trend, support and resistance, volatility, and standard deviation. Momentum tools measure the velocity of a directional...
The main purpose of analyzing waves is to understand when the current wave is exhausted aka overextended aka overbought aka oversold. What is every1 seem to miss is that exhaustion is not based exclusively on "price gone too far", but also on "too much time passed" and "not much volume was traded" as well. That's one of the main reasons why your comparative...
If you can identify overbought or oversold conditions, as a trader, this can be highly profitable. In particular, these are two definitions that refer to the extreme values of the price in addition to their intrinsic value. So, when these conditions appear, a reversal of the direction of the price is highly expected. What is Overbought? When something is...
What Is the Relative Strength Index (RSI)? 1. The relative strength index (RSI) is a popular momentum oscillator introduced in 1978. 2. The RSI is displayed as an oscillator (a line graph) on a scale of zero to 100. 3. An asset is usually considered overbought when the RSI is above 70 and oversold when it is below 30. 4. The RSI line crossing below the...
1) Bollinger Bands: Some traders will determine the market as "over-extended" when the price is piercing above or below the Bollinger bands. If above then the price is considered overbought and price may start to reverse. If below then the price is considered oversold and the price may start to reverse. 2) Stochastic RSI: some traders will determine the...
Stock price is lower low, but indicator is higher low. The price touches the support trend line. Tips: This is index, not a stock. But the tips should apply as well. 2013 dec 13, price and stochastic have divergence. Stochastic is to value price momentum. The divergence is a regular divergence. Means the price will bouce back. Here is for price...
Welcome Traders! In today's trading episode, you will learn how the RSI indicator works, and how to spot divergence. Divergence is a great indication to tell you if a trend might be reversing. Take time to practice what you learned in today's video. Until next time, have fun, and trade confident :)
VOLUME INDICATORS Volume is one piece of information that is often neglected by many market players, especially beginners. However, learning to interpret volume brings many advantages and could be of tremendous help when it comes to analyzing the markets. The usage of volume indicators has long been restricted to just the Forex Markets. Thereby in the Volume...
Relative Strenght Index(RSI) RSI is a momentum oscillator, whereas the momentum is the rate of the rise or fall in price. RSI is an oscillator ranging between two extremes, in the case of RSI, it ranges from 0 to 100. The relative strength index is computed with: RSI = 100RS/(1+RS); where RS is relative strength. RS= (Previous Average gain*13+Current...
After exploring the depths of profit taker heaven and stop loss hell, after combining many different indicators, finding correlations with momentum, trend, volatility, you name it... After trying to adjust the strategies to different assets, asset classes, market conditions... After finding out that each of these steps are way more difficult than I thought and...
Step #1: Define the Trend. An Downtrend is defined by a Series of LH Followed by a Series of LL. The definition of an downtrend is pretty much standard. In an downtrend, we look for a series of lower highs followed by a series of lower lows. Two LH followed by at least another two LL is enough to define an downtrend. A lower high is simply a swing low point that...
There were a total of 250-270 points of NQ scalps after the Iran missile strikes going long. If you held the first contract long on the swing trade (1st trade in the direction of the new trend is always the swing trade, marked by a fat arrow) you would have gained another 270 points.
Looks like BTCUSD still have a little bit further down to go, but is winding up for a next significant pump. DEMO of the use of my FUSIONGAPS (FG) and DIFFERENTIAL FUSIONGAPS (DFG) scripts, with my LIVIDITIUM indicators set. Not a financial/trading/investment advice. Exercise your own judgement and take responsibility for your own trades. ;) See also: If...
Let 1st 15m bar close 1st bar closed below Kijun-sen, + vol, oversold %R, Red Macd bar Wait for a 23%+ fib pullback retrace 2nd bar 38.2%+ pullback & closed below 38.2% level Enter on open of 3rd bar 3rd bar CLOSE confirmed bearish bias because Volume+, Oversold %R, Macd red bar You find your own SL and TP
Low price on point A, elevated volume, is confirmed by reviewing stochastic RSI where we can see stock is over sold, and this will create variation on pattern and add volatility . Same case works for point B, with a higher variation on price, and lower volume, but volatility is created, and stock is oversold. Point C, has a price increase, which confirms ...