Category: Basic strategies

  • 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…

  • 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…

  • 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…

  • 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…

  • 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…

  • 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…

  • 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…

  • 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…