Simple visual analysis as well as basic technical indicators are discussed. Clipping is a handy way to collect and organize the most important slides from a presentation. You can keep your great finds in clipboards organized around topics.
SlideShare Explore Search You. Best short term trading strategies Show related SlideShares at end. Full Name Comment goes here. Are you sure you want to Yes No. Vijay Kumar Very good Mahalim Fivebuckets at Student. Embeds 0 No embeds. No notes for slide. Some indicators do not work well in choppy market conditions.
Some indicators do not do well in trending market conditions. Before trading breakouts strategies, make sure markets are trending. Before trading reversal strategies, make sure markets are choppy or range bound. Look at the chart visually without any indicators. Look at the slope of the trendline. Trending markets usually have a slope greater than 20 percent either upwards or downwards. The first thing to do is to check the slope of the trendline.
Price resumes trending quickly after each pullback. Choppy markets trade mostly horizontally without much of a slope or direction. Prices drift back and forth, between the upper resistance line and the lower support line. Often times this is called trading channel. Prices are sluggish and markets slowly drift. Another way to determine if markets are trending or range bound choppy is to use technical indicators.
A simple indicator to determine if markets are trending is a 20 period exponential moving average. Exponential moving average is available on all popular technical analysis programs. Microsoft above 20 bar exponential moving average. Intel below 20 bar exponential moving average. Oscillators work well when markets are choppy and range bound. Oscillators measure overbought and oversold market conditions.
Do not use oscillators when markets are trending. A solid oscillator to measure overbought and oversold levels is the Relative Strength Indicator.
When the RSI indicator reaches 70 or higher, it indicates overbought market levels. When the RSI indicator reaches 30 or lower, it indicates oversold market levels. For short term market swings, use a 5 bar RSI time frame period. Before using technical indicatorsdetermine if markets are trending or choppy range bound. Thank you for watching the lesson. Check back weekly for new videos! Start clipping No thanks.
You just clipped your first slide! Clipping is a handy way to collect important slides you want to go back to later. Now customize the name of a clipboard to store your clips. Visibility Others can see my Clipboard.More...