KG Trading

Saturday, June 30, 2007

Basics: Technical Indicators

Technical indicators can be divided into three groups. Trend following indicators help to identify trends. oscilators help find turning points. Other indicators show the general changes in the mass pyschology.

trend-following indicators

If markets are moving trend-following indicators work best but gives false signals when the markets are flat.
include moving averages, MACD, Accumulation/Distribution, and others
they turn after the trend reverse (conincident/lagging indicators)

oscillators

If markets are flat, oscillators can help to identify turning points but gives false signals when the markets began to trend.
include stochastic, ROC, Momentum, RSI, Elder-ray, force index, W %R, commodity channel index and others.
they turn ahead of prices (coincident/leading indicators)

and other indicators

put/call ratio, new highs , new lows etc...

For more information about the indicators visit the following sites
[1] investpedia active trading
[2] Dow Jones Theory video (german)
[3] Stock Charts
[4] Trading for a living, Dr.Alexander Elder

Basics: Technical Indicators

trend-following indicators

If markets are moving trend-following indicators work best but gives false signals when the markets are flat.
include moving averages, MACD, Accumulation/Distribution, and others
they turn after the trend reverse (conincident/lagging indicators)

oscillators

If markets are flat, oscillators can help to identify turning points but gives false signals when the markets began to trend.
include stochastic, ROC, Momentum, RSI, Elder-ray, force index, W %R, commodity channel index and others.
they turn ahead of prices (coincident/leading indicators)

and other indicators

put/call ratio, new highs , new lows etc...

For more information about the indicators visit the following sites
[1] investpedia active trading
[2] Dow Jones Theory video (german)
[3] Stock Charts
[4] Trading for a living, Dr.Alexander Elder