Ratio Chart Analysis
by PRASHANT SHAH -
The concept of plotting a ratio chart of two instruments is hugely underrated. It can help achieve objectivity in analyzing the relative strength and also play a key role in developing trading systems or screeners for stocks in different market environments. In any chart, we can analyze and study the trend and pattern. We can ... Read more
Moving average on Ratio chart
by PRASHANT SHAH -
Moving average Moving average is an extremely popular indicator that can be used in the ratio charts too. The formula for moving average calculation in the ratio chart is the same as the price chart. We calculate the average of the last n periods and plot it as an overlay on the price chart. When ... Read more
AMA Indicator on Ratio chart
by PRASHANT SHAH -
Adaptive Moving Average (AMA) Adaptive Moving Average (AMA) is an indicator developed by Perry J. Kaufman. He explained this indicator in his book Trading System and Methods. It is also known as Kaufman’s Adaptive Moving Average (KAMA). Let me explain the concept of the indicator before we discuss the interpretation. There are two important triggers ... Read more
AMMA Indicator on Ratio chart
by PRASHANT SHAH -
AMMA We can also plot dual moving averages on the chart to identify the crossover of averages. Typically, we need to choose a short-term period average and a long-term period average while plotting a dual moving average. But, instead of using two moving averages, we can use a combination of a regular moving average and ... Read more
Donchian Channel on Ratio chart
by PRASHANT SHAH -
Donchian channel While moving averages can be handy to identify the trend and crossovers in the ratio chart, the channel-based indicators can also be of great help when we wish to identify range breakouts or a breakout above say the high of N days. The simplest and powerful channel indicator is the Donchian channel indicator. ... Read more
RSI on Ratio chart
by PRASHANT SHAH -
RSI We can plot oscillator and momentum indicators on the ratio chart as well. Devised by J. Welles Wilder, RSI or the Relative Strength Index is one the most popular indicators used in technical analysis. Let us try to understand the underlying formula and logic behind this indicator.The RSI indicator is calculated on closing prices. We ... Read more
