TECHNICAL INDICATORS




Aside from fundamental analysis, technical analysis is another way to approach investment decisions.
My way of using technical indicators:

1] Always monitor channels, pennants, flags and trendlines for your graph analysis.

MOVING AVERAGES
Using the 10, 35, 50 and 200 day averages.
1. Buy when the close is above the 50 period and the 10 period average is above both the 35 and 50 period averages.
2. If the close is above the 50 period average but the 10 period average is above the 35 period average, exit shorts but do not go long.
3. Trade only in the direction of the moving averages, when there is a crossover in the moving averages trade only in the direction of the crossover.
4. When the market is trending and you are looking for a place to get in, wait for it to retrace to one of the moving averages or trendlines.
5. Assume that the main trendline or moving average will hold and not be broken. If it is strong it should act as a support and resisstance when the market approaches it.

ADX
1. When above 30, consider the trend very strong.
2. Below 20, consider the trend weak.
3. Trade only in the direction of the trend.
4. The higher the ADX the less likely that a full pullback will occur.
5. Take profits if below 20.
6. Add to position if above 30.
7. If it dips to below 30 after being above 30 for a time consider the trend to become choppy.

A cup with handle formation can take up to a year to form.

 OSCILLATORS (for trading within a range only)

STOCHASTICS
1. Buy when both lines are above the oversold level.
2. Buy when the fast line %K crosses over the slow line %D.
3. Be long when both lines are above the overbought area but not yet turning lower.
4. Buy when the indicator is strong and retests its extreme.
5. Look for a failed move.
6.Look for divergence. If you see the market making lower lows while the st indicator makes higher lows: this can indicate a trend change.

MCD
1. Buy when the dotted line is above the signal line and short only when it is below.
2. Buy when the crossover is below the zero line.
3. Buy when the moving averages cross above the signal line.
4. Look for divergence.

RSI
1. Buy when the RSI comes out of oversold territory.
2. Buy when the RSI stalls at the 50 line.
3. Buy when the RSI is above the 50 line.
4. Look for divergence between price action and the indicator,.

STANDARD DEVIATION
1. Can be used for stops and stop limit orders for hedging protection on your portfolio.

Timing

Getting in at the right time is crucial. The 3ed Friday of every month and especially triple witching Friday are good turning points. If the market had a huge run either up or down leading into that day you can usually expect it to reverse for the following week.

 

Other attractive periods when you can enter: 

When a stock has a pullback from its annual high,

When insiders buy at the annual high

When the stock exhibits a short squeeze situation.
Expect to make money in spurts, success may be a marathon but making money is in knowing when to run the sprint. Time value erodes very quickly as expiration comes near therefore exit purchased Options no later than 1 month before expiration.



The Fibonacci Calculator is powered by Investing.com



9,283 thoughts on “TECHNICAL INDICATORS

  1. It’s the best time to make some plans for the future and it’s time to be
    happy. I’ve read this post and if I could I want to suggest you
    few interesting things or advice. Perhaps you can write next articles referring to this article.
    I want to read more things about it!

  2. Greetings from Idaho! I’m bored aat work so I decided to bbrowse
    your blog on my iphone during lunch break. I realply like tthe
    info you present here and can’t wait to take a look when I get home.
    I’m shocked at how fast your blog loaded on my
    mogile .. I’m not even using WIFI, just 3G ..
    Anyhow, great site!

  3. Its like you read my mind! You appear to grasp so much approximately
    this, like you wrote the guide in it or something.

    I believe that you simply could do with some percent to
    force the message house a bit, but instead of that, that is magnificent blog.
    A great read. I will certainly be back.

  4. I would like to express my appreciation to the writer for
    rescuing me from this crisis. Because of looking out through the
    the web and getting concepts which were not helpful, I believed my life was over.
    Being alive minus the strategies to the issues you’ve solved all through your good
    posting is a crucial case, and the kind which may have in a negative way damaged my entire career
    if I had not noticed your web site. Your own personal natural talent and kindness in playing with the whole
    thing was crucial. I don’t know what I would’ve done if I hadn’t come across such a thing like this.
    I can also at this time look forward to
    my future. Thanks a lot very much for the reliable and sensible help.
    I will not hesitate to suggest your web site to anybody who desires
    guidelines on this problem.

  5. Hey I am so happy I found your site, I really found you by accident, while I was searching
    on Aol for something else, Regardless I am here now and would just like to say thank you
    for a tremendous post and a all round enjoyable blog
    (I also love the theme/design), I don’t have time to read it all at the moment but
    I have bookmarked it and also added in your RSS feeds,
    so when I have time I will be back to read a lot more, Please do keep up the
    excellent job.

  6. I have been surfing on-line greater than three hours today,
    but I by no means found any fascinating article like yours.
    It is pretty value sufficient for me. Personally, if all webmasters and bloggers made excellent content as you probably did, the
    net will be much more helpful than ever before.

Leave a Reply

Your email address will not be published.

Time limit is exhausted. Please reload the CAPTCHA.