Category: Basic strategies
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Momentum Indicator
Momentum Indicator The Momentum indicator is a very simple and straight forward indicator. It tells you essentially what has been the recent change between the price of your current spread bet and the previous price of n days ago. What this relationship tells you is if your current price is stronger or weaker than the…
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Trading the Commodity Channel Index (CCI)
Trading the Commodity Channel Index (CCI) Reversal Strategy Many use the CCI as an oscillator, as it comprises of 75% of the prices within -100 and +100: Spread bet Sell signal: when the channel crosses above the +100 and then falls back below the +100 line. Spread bet Buy signal: when the channel crosses above…
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Average Directional Index (ADX)2
Trading Signals: +DI Cross –DI The +DI compares the two consecutive highs and the –DI compares the two consecutive lows. Wells Wilder states: -when the ADX >20 and the + DI is above the –DI. Trade/spread bet Long: -when the ADX >20 and the -DI is above the +DI. Trade/spread bet short: example: Combining…
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Average Directional Index (ADX)
Volume Indicator: Average Directional Index (ADX) The Average Directional Index measures if a stock is trending or not. It also measures the strength of the trend no matter it’s direction, and it is made up of other two parts, the +DI (Plus Directional Index) and the –DI (Plus Directional Index), which can generate a…
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On Balance Volume
Volume Indicator: On Balance Volume On Balance Volume is a tool that quantifies the strength of a price movement or trend. It helps you identify if it is weak or strong. It is very easy to calculate: If today’s price closes above yesterday’s price, then we give the volume a positive number. If instead…
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Volume Indicator: Accumulation Distribution
Volume Indicator: Accumulation Distribution Accumulation Distribution is a volume based indictor that is used as a price confirming tool or a warning tool that anticipates price change. The Accumulation Distribution is a variation of the On Balance Volume. The main difference in the Accumulation Distribution is that the volume is weighted relative to the…
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Money Flow Index2
Trading with the Money Flow Index: The Money flow index used as a warning signal tool: The MFI is a good indicator of divergence and convergence as it has volume incorporated in it’s calculations. As volume is said to precede prices, it is a good indicator of when prices are turning. Bearish divergence is when…
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Money Flow Index
Indicator: Money Flow Index Family: Oscillator Money Flow index is a momentum oscillator based of the change of price and volume. This is based on a similar concept to the Accumulation and Distribution, normalized between 1 – 100 , to create an oscillator similar to the RSI and interpreted in the same way. As an…