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Category Archives for Indicators

How to Trade the MACD: A High-level Analysis of the MACD Line Feature

Moving Average Convergence Divergence (MACD) is one of the most popular technical indicators used by traders. It is a flexible indicator that can be used for determining the strength and direction of a trend. It has three distinct features and in this first post we are going to do a high-level analysis of one of those […]

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Win Ratio EasyLanguage Code

In the article,Win Rate The Most Important Metric, Michael Harris discusses the importance of Win Rate when it comes to building a profitable trading system. I spent a few minutes creating an EasyLanguage function that can be used during your development process in calculating the Win Ratio for you. The function can be applied to any strategy. […]

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Distance Weighted Moving Averages (DWMA and IDWMA)

The distance weighted moving average is another nonlinear filter that provides the basis for further research and exploration. In its traditional form, a distance weighted moving average (DWMA) is designed to be a robust version of a moving average to reduce the impact of outliers. Here is the calculation from the Encyclopedia of Math: Notice […]

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Understanding the Relationship Between Stocks & Bonds

Intermarket Analysis is the comparison of potentially related markets. For example: S&P500 and 30 Year Treasury Bonds 30 Year Treasury Bonds and Gold S&P500 and Japanese Yen Shanghai Composite Index and Aussie Dollar, etc. The problem with using TradeStation for any Intermarket Analysis is the dreaded “You may not mix symbols with different delays in […]

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The 40-Week Cycle Revisited

As I mentioned last time around, when it comes to analyzing the financial markets, I am a proud graduate of “The School of Whatever Works.” In my youth I “wrote down” a lot of interesting analysis ideas (that’s how we did it back then, sadly). Whenever I would hear or read of a new market […]

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Modified Chartmill Value Indicator (MCVI)

I read about this indicator in an article titled “The Chartmill Value Indicator,” which appeared in the January 2013 issue of Technical Analysis of Stocks and Commodities. The article was written by Dirk Vandycke. In the article, Vandycke introduced an interesting oscillator called the Chartmill Value Indicator (CVI). The following article explains the CVI formulas, […]

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The Deadly Double Divergence

Would you be interested in an indicator that has signaled ten market tops since 1966 without a single false signal?  I read about such an indicator in an article titled “Double Divergences in the Advance-Decline Line,” which appeared in the November 2013 issue of Active Trader.  The article was written by Charles Kirkpatrick. In the article, […]

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FRAMA – Is It Effective?

The Fractal Adaptive Moving Average aka FRAMA is a particularly clever indicator.  It uses the Fractal Dimension of stock prices to dynamically adjust its smoothing period.  In this post we will reveal how the FRAMA performs and if it is worthy of being included in your trading arsenal. To fully understand how the FRAMA works please read this […]

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Moving Averages – Simple vs. Exponential

In this round of testing we put the Simple (SMA), Exponential (EMA) and Double Exponential (D-EMA) Moving Averages through their paces to identify which is the best and what characteristics can be expected as the length of each average is adjusted. We tested Long and Short trades using Daily and Weekly data, taking End Of […]

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Best Stock Market Indicator Ever: Rises to 85%; Secondaries Are Negative

The $OEXA200R (the percentage of S&P 100 stocks above their 200 DMA) is a technical indicator available on StockCharts.com used to find the “sweet spot” time period in the market when you have the best chance of making money. The weekly charts below are current through the week’s close. Important Notice: As of June 17, the criteria […]

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