Negative Volume Index

Negative Volume Index

The Negative Volume Index showsfocus on periods when volume decreases from the previous period. Theinterpretation of the Negative Volume Index is that well-informed investors arebuying when the index falls and uninformed investors are buying when the indexrises. The premise being that the smartmoney takes positions when volume decreases. This index tries to determinethe periods where trading volume hasdecreased from the previous period,

The Negative Volume Index(NVI) is used to provide buy signals ona given equity when the price is trending upward while the volume is trendingdownward. The premise behind this indicator is that price changes on highvolume days are a result of uninformed traders while price changes on decreasedvolume are due to informed traders. Increases in the NVI are taken asindicative of smart money buying into the stock. Trend reversals are indicatedby crossovers with a signal line .

Bull markets are presumed tooccur when the NVI is above its 255-period moving average. Buy (long) signalsare issued when the NVI crosses above its 255-period moving average. Sell(short) signals are issued when the NVI crosses below its 255-period movingaverage.

The interpretation of the NVIassumes that when volume increases, the crowd-following uninformed traders arein the market. with decreased volume, the money is quietly taking positions. The NVI displays what the smart moneyis doing.

Moving Average Envelope

Moving Average Envelope

Moving Average Envelopes consistof moving averages calculated from the underling price, shifted up and down bya fixed percentage. Moving Average Envelopes (or trading bands) can be imposedover an actual price or another indicator. When prices rise above the upperband or fall below the lower band, a change in direction may occur when theprice penetrates the band after a small reversal from the opposite direction.Shift is a double value specifying the percentage of shift for each movingaverage from the actual values.

They are used to indicateoverbought and oversold levels and can be traded on their own or in conjunctionwith a momentum indicator. It is used to identify trading ranges by the assumptionthat price should not deviate from the average of the underlying price element(high or low) by the percentage utilized.

When prices rise above the upperband or fall below the lower band, a change in direction may occur when theprice penetrates the band after a small reversal from the opposite direction.

Sometimes the moving average envelope is used to determine when a price is"cheap" or "expensive" it that in a strongly trending market, price is likely to stay in theupper part of the envelope for lengthy periods, and waiting for cheapness inthe test in such a market, may miss themajor part of the move.

Money Flow index

Money Flow Index

The Money Flow Index measuresmoney flow of a security, using volume and price for calculations. Marketbottoms below 20 and tops above 80. Divergence of price and Money Flow Indexare also used. The Money Flow Index ("MFI") is a momentum indicatorthat measures the strength of money in and out of a instrument. It accounts forvolume. Money flow is an indicator that calculates an indexed value based onprice and volume for the number of bars specified in the input Length.Calculations are made for each bar with an average price greater than theprevious bar and for each bar with an average price less than the previous bar.These values are then indexed to calculate and plot the money flow. The use ofboth price and volume provides a different perspective from price or volumealone. The money flow indicator tends to show dramatic oscillations and can beuseful in identifying overbought and oversold conditions.

It is used to measure thestrength of money flowing in and out of an instrument. It is also used to warnof trend weakness and likely reversal points. The indicator compares the valuetraded on up-periods to value traded on down-periods. If the price trendshigher and the MFI trends lower (or vice versa), a reversal may be imminent.MFI can be used to determine if there is too much or too little volumeassociated with a security. A instrument is considered overbought if the MFIindicator reaches 80 and above (a bearish reading). On the other end of thespectrum, a bullish reading of 20 and below suggests a instrument is oversold.

Momentum oscillator

Momentum Oscillator

The momentum indicator calculateschange of over a specified length of time as a ratio. high values of themomentum oscillator may indicate that prices are trending strongly upwards. Themomentum oscillator is closely related to MACD and Price Rate of Change (ROC).The Momentum indicator measures the amount that a price has changed over agiven time span. It displays the rate-of-change of a price as a ratio. Themomentum oscillator measures the velocity of directional price movement. Whenprice moves up, at some point the market is considered to be overbought; whenit moves down, at some point the market is considered to be oversold. a reaction or reversal is imminent. The slope of the momentum oscillator isdirectly proportional to the velocity of the move. The distance traveled up or down by themomentum oscillator is proportional to the magnitude of the move. The momentum oscillator is usuallycharacterized by a line on a chart drawn in two dimensions. The Y axis(vertical) represents magnitude or distance the indicator moves; the X axis(horizontal) represents time. The momentum oscillator drawn in this manner ischaracterized by the fact that it moves very rapidly at market turning pointsand tends to slow down as the market continues the directional move.

It is used as a trend-followingoscillator. Buy when the indicator bottoms and turns up and sell when theindicator peaks and turns down. It is also used as a leading indicator.

This method assumes that markettops are typically identified by a rapid price increase and that market bottomstypically end with rapid price declines. As a market peaks, the Momentumindicator will climb sharply and then fall off diverging from the continuedupward or sideways movement of the price.

Median Price

Median

A Median Price is simply anaverage of one periods high and low values. A Median Price is often used as analternative way of viewing price action, and also as a component forcalculating other indicators. The Median Price indicator is the midpoint ofeach periods price. It provides a simple, single-line chart of the periodsaverage price. This average price is useful when you want a simpler view ofprices.

A Median Price is often used asan alternative way of viewing price action, and also as a component forcalculating other indicators.

Mass Index

Mass Index

The Mass Index identifies pricechanges by indexing the narrowing and widening change between high and lowprices. Mass Index, reversals may occur when a 25-period Mass Index rises above27 or falls below 26.5. The Mass Index is a range oscillator. It is designed toidentify possible market extremes by comparing range between daily high and lowprices. The greater the distance, the greater the volatility, and vice versa.

It is used to identify trendreversals. The Mass Index is a range oscillator that uses changes in tradingprice and provides unique market reversal forecasts that other indicators maymiss. The Mass Index attempts to identify reversals by comparing the tradingrange between High & low prices for each period. A bulge in the index linesignals reversals.

MACD

MOVING AVERAGE CONVERGENCE DIVERGENCE (MACD)

The MACD is a moving averageoscillator that shows potential overbought/oversold phases of marketfluctuation. The MACD is a calculation of two moving averages of the underlyingprice/indicator. Buy/Sell interpretations may be derived from crossovers(calculated from the Signal Periods parameter), overbought/oversold levels ofthe MACD and divergences between MACD and actual price.

The MACD ("Moving Average ConvergenceDivergence") is a trend following momentum indicator that shows therelationship between two moving averages of prices. MACD uses exponentialmoving averages, which are lagging indicators, to include some trend-followingcharacteristics. These lagging indicators are turned into a momentum oscillatorby subtracting the longer moving average from the shorter moving average. Theresulting plot forms a line that oscillates above and below zero, without anyupper or lower limits. MACD is a centered oscillator.

The MACD is the differencebetween a 26-period and 12-period exponential moving average. A 9-periodexponential moving average, called the signal line is plotted on top of the MACD to show buy/sell opportunities

The MACD proves most effective inwide-swinging trading markets. The basic MACD trading rule is to sell when theMACD falls below its signal line, a buy signal occurs when the MACD rises aboveits signal line. It is also popular to buy/sell when the MACD goes above/belowzero. The MACD is also useful as an overbought/oversold indicator.