The new High new Low ratio is a technical indicator that is very simple. It measures the number of securities trading on the New York Stock Exchange The trading concepts used by William Delbert Gann or W.
Gann as he is fondly called is a name in the financial markets that instantly brings int False Signals with Technical Indicators We have discussed many technical indicators on the Tradingsim blog. We have gone through many trading signals Coppock Curve Edwin Sedge Coppock, an economist by profession developed the Coppock Curve in , which is a momentum indicator to identify long-term Are you an indicator trader? If yes, then you will enjoy reading about one of the most widely used trading tools — the moving average convergence di If you are a fan of trading with moving averages and unfamiliar with the alligator indicator, get ready for a pleasant surprise.
What is the Relative Vigor Index? While there are many applications for What is the TRIX indicator? The TRIX indicator is a momentum oscillator, which assists traders by identifying trending markets and price reversals. What is the Klinger Volume Oscillator? What is the Ease of Movement Indicator? The Ease of Movement EMV is an oscillator, which analyzes the relationship between price and trading volume Just like regular exchange traded funds, a leveraged ETF can get you exposure to a particular sector, but as the name suggests, it uses built in lever What is the Ichimoku Cloud?
The Ichimoku Cloud, also known as Ichimoku Kino Hyo is a technical indicator, which consists of five moving averages and a Therefore, I have decided to e Wouldn't we all love to know when a stock is trending and when it is in flat territory?
The Keltner Channel is a lagging on-chart indicator that uses a combin I don't know about you, but what was Bill Williams thinking when he came up with the name awesome oscillator? With names floating around as complex Fans of the Tradingsim blog know that I am big on volume. Volume is probably one of the oldest off chart technical indicators you will find in techn If you have been day trading with price action and volume - two of our favorite tools - then the Money Flow Index MFI indicator would not feel alien Tick Volume Definition Tick volume is measuring every trade whether up or down and the volume that accompanies those trades for a given time period.
It gained its na Many of the technical indicators discussed on the Tradingsim blog deal with assessing a particular stock or ETF. However, in this article we will cove Technical analysis is a means of being secure as a trader in the stock market. It provides the discipline on how to be able to predict movement in pri Price Oscillator Definition The price oscillator displays the difference of two moving averages in either points or in percentages.
Random Walk Index Definition The random walk index RWI is a technical indicator that attempts to determine if a stock's price movement is random or What is a Displaced Moving Average? Why is Volume Important?
Volume analysis is the technique of assessing the health of a trend, based on volume activity. Volume is one of the ol Day Trading Indicators Day trading on any timeframe chart requires the knowledge of how the general market is behaving. You want to make sure that Technical analysis boils down to predicting the future directional movement by studying past market behavior and you would not likely find a better wa Trend Lines Definition Trend lines are one of the oldest technical indicators.
Trend lines are used to identify and confirm existing price trends. Slow Stochastic Definition The slow stochastic indicator is a price oscillator that compares a security's closing price over "n" range.
If not, then you definitely need t It displays the size of the best bid and offers with the Most day traders have a love or hate relationship with tick charts.
Meaning, either you cannot trade without the tick data, or you absolutely despise Reading the tape is one of the essential indicators when active trading. Many traders know about the hundreds of indicators readily available on mos Volume is one of the oldest day trading indicators in the market.
I would dare to say the volume indicator is the most popular indicator used by market technicians as well. In addition to technicians, market fundamentalist also take notice to the number of shares traded for a given security. The tricky part is volume can provide conflicting messages for the same setup.
Your ability to assess what the volume is telling you in conjunction with price action can be a deciding factor for your ability to turn a profit in the market. In this article, we will cover how to assess the volume indicator to help us determine the market's intentions across four common setups:.
Traders will often look for breaks of support and resistance to enter positions. For those fans of the Tradingsim blog, you know that I exclusively trade breakouts in the morning of each session. There are two key components to confirm a breakout: Can you tell me what happened to Netflix after the breakout of the early swing high? The interesting thing about the Netflix chart is that the stock never made a new high after the first 5-minute bar.
This is a prime example where a stock may have broken a high from a few weeks ago, but is unable to break the high for the current day. As day traders, you want to wait until the high of the day is broken with volume. A key point for you is that every swing high does not need to exceed the previous swing high with more volume. I used to obsess over this and if I didn't see more volume I would walk away from the trade.
While this charting example did not include a break of the daily high, when you look for stocks that are breaking highs, just look for heavy volume. Again, if we are within the margins, please do not beat yourself up over a few thousand shares.
In a perfect world, the volume would expand on the breakout and allow you to eat most of the gains on the impulsive move higher. Below is an example of this scenario. Let's test to see if you are picking up the concepts of breakouts with volume. Take a look at the below chart without scrolling too far and tell me if the stock will continue in the direction of the trend or reverse? The answer to my question - you have no idea if the stock will have a valid breakout.
From the chart, you could see that the stock had nice down volume and only one green candle before the breakdown took place. This is where experience and money management come into play, because you have to take a chance on the trade.
You would have known you were in a winner once you saw the volume pickup on the breakdown as illustrated in the chart and the price action began to break down with ease. For those that follow the blog, you know that I like to enter the position on a new daily high with increased volume. You will need to place your stops slightly below the high to ensure you are not caught in a trap. This strategy works for both long and short positions. The key again, is looking for the expansion in volume prior to entering the trade.
When a stock is moving higher in a stair-step approach, you will want to see volume increase on each successive high and decrease on each pullback. The underlying message is that there is more positive volume as the stock is moving higher, thus confirming the health of the trend.
This sort of confirmation in the volume activity is usually a result of a stock in an impulsive phase of a trend. The volume increase in the direction of the primary trend is something you will generally see as stocks progress throughout the day. You will see the strong move into the 10 am time frame , a consolidation period and then acceleration from noon until the close.
For those that follow the blog , you know that I do not trade in the afternoon; however, this doesn't mean you can't figure it out. As the stock moves in your favor, you should continuously monitor the volume activity to see if the move is in jeopardy of reversing.
These charts are just a sample of what happens far too often when it comes to afternoon trading. So, how do you find the stocks that will trend all day? After many years of trading, I can tell you I honestly don't know. Volume spikes are often the result of news driven events.
This volume spike will often lead to sharp reversals, since the moves are unsustainable due to the imbalance of supply and demand. Trading counter to volume spikes can be very profitable, but it requires enormous skill and mastery of volume analysis. These volume spikes can also be an opportunity for you as a trader to take a counter move position.
You really need to know what you are doing if you are going to trade volume spikes. The action is swift and you have to keep your stops tight, but if you time it right, you can capture some nice gains. Let's walk through a few volume spike examples, which resulted in a reversal off the spike high or low. Notice how the stock never made a new high even though the volume and price action was present.More...