ATR (Average True Range)
by PRASHANT SHAH -
Any candle’s range can be defined as the difference between its high and low price. True Range was a concept introduced by J. Welles Wilder. The true range is defined as the maximum of (current high – current low, current low – previous close, current high – previous close) Average True Range refers to the ... Read more
Relative Strength Index (RSI)
by PRASHANT SHAH -
Devised by J. Welles Wilder, RSI (Relative Strength Index) is one the most popular indicators in Technical analysis. Let us try to understand the underlying formula and logic behind this indicator.RSI indicator is calculated on closing price. We can define bullish and bearish price on a closing basis (Line chart) chart as follows: Now that we ... Read more
Decoding 2-period RSI
by PRASHANT SHAH -
2-period RSI is a popular concept introduced by Larry Connors. This method is used by a number of traders in their trading strategies. There are two simple rules in the strategy that Larry Connors explained. For buying: · Price should be above 200-DMA (Long-term trend is up) · 2-period RSI should be below 10 (better ... Read more
ADX Indicator
by PRASHANT SHAH -
You will see three lines, that forms part of the ADX indicator, appearing in the lower pane in the chart below. Let us understand them. Before we understand the ADX & its components, it is important to sort out a few concepts. Let us start with the Range. Range of any candle is a difference ... Read more
Commodity Channel Index (CCI)
by PRASHANT SHAH -
Invented by Donald Lambert, CCI stands for Commodity Channel Index. There are three parts of CCI Indicator: You can remember it as TMC.While analysing the trend of the price, we can consider closing price, high price or low price. What if we calculate the average of High, Low and Closing price. It is known as ... Read more
Stochastic Indicator
by PRASHANT SHAH -
Let’s discuss another popular indicator used by many traders and investors. If we merge last 5 candles and make one. Highest high of last sessions is High of this merged candle, Lowest Low is a Low price of this candle and recent closing price is a close of this merged candle.Let’s calculate range of this ... Read more
