Variable Moving Average

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Variable Moving Average

A Variable Moving Average is anexponential moving average that adjusts to volatility. A Moving Average is mostoften used to average values for a smoother representation of the underlyingprice or indicator. A variable moving average is an exponential moving averagethat automatically adjusts the smoothing percentage based on the volatility ofthe data series. The more volatile the data, the more sensitive the smoothingconstant used in the moving average calculation. Sensitivity is increased bygiving more weight given to the current data.

During trading ranges (whenprices move sideways in a narrow range) shorter term moving averages tend toproduce numerous false signals. In trending markets (when prices move up ordown over an extended period) longer-term moving averages are slow to react toreversals in trend. By automatically adjusting the smoothing constant, avariable moving average is able to adjust its sensitivity, allowing it toperform better in both types of markets.

Ultimate Oscillator

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The Ultimate Oscillator comparesprices with three oscillators, using three different periods for calculations.The most popular interpretation of the Ultimate Oscillator is price/indicatordivergence.

Oscillators typically compare ainstruments smoothed price with its price x-periods ago. Ultimate Oscillatorthat uses weighted sums of three oscillators, each of which uses a different timeperiod. Values range .

The timeframe and number ofperiods used in plotting Ultimate Oscillator can vary according to desiredsensitivity and the characteristics of the instrument. Typically values of7-periods, 14- periods and 28-periods are used. Note that these time periodsall overlap, i.e. the 28-period time frame includes both the 14-period timeframe and the 7-period time frame. This means that the action of the shortesttime frame is included in the calculation three times and has a magnifiedimpact on the results

Typical Price

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Typical Price

A Typical Price is simply anaverage of one periods high, low and close values. A Typical Price is oftenused as an alternative way of viewing price action, and also as a component forcalculating other indicators.. The Typical Price indicator provides a simple,single-line plot of the periods average price. Some traders use the TypicalPrice rather than the closing price when creating moving average penetrationsystems. Typical Price is another approximation of average price for eachperiod and can be used as a filter for moving average systems

For day trading, the TypicalPrice helps you to get a clear view of what the main thrust of the days actionwere.

True Range

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True Range

The Average True Range measuresmarket volatility. High ATR values may signal market bottoms, and low ATRvalues may signal neutral markets. The True Range measures market volatility.

High values indicate that pricesare changing a large amount during the period. Low values indicate that pricesare staying relatively constant. Note that both trending and level prices canhave high or low volatility.

The value is typically smoothedwith a moving average. High volatility levels can sometimes be used to timetrend reversals, such as market tops and bottoms. Low volatility levels cansometimes be used to time the beginning of new upward price trends followingperiods of consolidation.

The True Range is a measure ofvolatility. Major tops are typically accompanied by high volatility during theblow-off phase of a market, as traders become more and more nervous and readyto take profits. Major bottoms are usually calmer, with low volatility, as thehopes for quick profits have faded. The idea is to replace the high - lowinterval for the given period, as the high-low does not take into considerationgaps and limit moves.

TRIX

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TRIX

TRIX is a momentum oscillator thatshows the rate of change of an exponentially averaged closing price. The mostcommon interpretation of the TRIX oscillator is to buy when the oscillatorrises and sell when the oscillator falls. 3, 8 and 14 period moving averagesare often used to smooth the TRIX oscillator. TRIX is a momentum indicator thatdisplays the percent rate-of-change of a triple exponentially smoothed movingaverage of the instruments closing price. It is designed to keep you in trendsequal to or shorter than the number of periods you specify.

The TRIX indicator oscillatesaround a zero line. Its triple exponential smoothing is designed to filter outinsignificant cycles. Trades should be placed when the indicator changesdirection (i.e., buy when it turns up and sell when it turns down). The TRIX can also help identify turningpoints. The simplest rule of trading decisions making while following thetrend- to buy, when TRIX changes direction from decreasing one to incising. Andto sell, when TRIX changes direction from incising one to decreasing.

Triangular Moving Average

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Triangular Moving Average

Triangular Moving Average give more weight tothe price in the middle of the moving average periods. A Moving Average is mostoften used to average values for a smoother representation of the underlyingprice or indicator. They are actually double-smoothed simple moving averages.The periods used in the simple moving averages varies .

Moving averages are used to helpidentify the trend of prices. Bycreating an average of prices, that "moves" with the addition of newdata, the price action on the security being analyzed is “smoothed".

In other words, by calculatingthe average value of a underlying security or indicator, fluctuations arereduced in importance and what remains is a stronger indication of the trend ofprices over the period being analyzed

Trade Volume Index

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Trade Volume Index

The Trade Volume index showswhether a security is being accumulated or distribute. When the indicator isrising, the security is said to be accumulating. when the indicator is falling,the security is said to being distributing. Prices may reverse when theindicator converges with price.

The TVI helps identify whetherbuyers or sellers are in control. If the TVI is trending up, it indicates thatbuyers are in control. If the TVI is trending down, it indicates that sellersare in control. If the TVI is abovezero, it indicates that net buying has taken place over the time perioddisplayed. If the TVI is below zero, it indicates that net selling has takenplace over the time period displayed