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
Rate of Change (ROC) & Know-Sure-Thing (KST)
by PRASHANT SHAH -
Below is a hypothetical case to explain a concept. A country has 50 infected people from a disease which is getting widespread. From above table, it is apparent that that the numbers are increasing every day. Now see the same information in below table: Absolute numbers are fine to assess the broad trend. While the ... Read more
Super Trend Indicator
by PRASHANT SHAH -
In every bar or candle, we have four key prices: Open, High, Low, and Close. To define a trend, we can use any of these prices. For example, an uptrend can be defined as today’s Close being higher than yesterday’s Close. Additionally, we can calculate the Range Price of each bar using the following formula: ... Read more
Ichimoku Indicator
by PRASHANT SHAH -
Ichimoku is a very popular Japanese indicator. Let’s discuss how it is calculated and used. If we collect last 52 bars and combine then to make one candle from it, the high of the combined candle will be highest high of those 52-bars and Low of the combined candle will be lowest low of the ... Read more
