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
MACD & Disparity
by PRASHANT SHAH -
MACD is a popular indicator created by Gerald Appel. MACD stands for Moving Average Convergence Divergence. When we plot two moving averages in a chart, the trend is considered bullish when the short-term moving average (Lower parameter) is above the long-term moving average (higher parameter) and bearish when the short-term average is below long-term average. ... Read more
Money Flow Index (MFI)
by PRASHANT SHAH -
Created by Gene Quong and Avrum Soudack, MFI stands for Money Flow Index.Have you played Seesaw? Imagine Bulls and Bears are sitting on either side of the seesaw and playing on your screen Our formula to understand MFI is “PTV on Seesaw”.See this chart. There are 10 prices in this session. If Current price > Previous ... Read more
Average True Range (ATR)
by PRASHANT SHAH -
Range of any candle is a difference between its High and Low price.J. Welles Wilder introduced a concept called True Range. Formula of True Range:Maximum of (Current High – Current Low, Current Low – Prev Close, Current High – Prev Close)The average price of true range over last several candles is known as Average True ... Read more
