ATR (Average True Range)

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)

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

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

Pullback & Disparity

Broadly, there are three types of patterns that we trade: Breakout, reversal and pullback.There are many possibilities and price patterns to find pullback trading opportunities. Check below image. It is a current chart of BHARATFORG on daily 0.25% x 3 box-value. Point A is a strong breakout pattern. Point B is a correction. When stock ... Read more

MAST Indicator

Moving average is a basic and popular indicator. Let us do a case study with a simple 5-period moving average. Have a look at the example below. This a simple average of 5 prices.When the next price is printed, we drop the first price and the average is calculated for last 5 prices that includes ... Read more

Ulcer Index – Bears’ & Exit indicator

Ulcer Index (UI) – Bears’ indicator, Exit indicator. Introduction The Ulcer Index indicator was developed by Peter Marin and Byron McCann. The indicator was first introduced in their 1989 book, The Investor’s Guide to Fidelity Funds. This indicator was designed to analyse Mutual Funds. Ulcer index is known as a volatility indicator but I would not ... Read more

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