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Trend indikators

Moving Averages (Moving Average, or removals).
The idea of an indicator lies in the fact that random fluctuations in the price is hampered understand where the market is moving. Therefore, the formula for calculating the indicator suggests smoothing of these oscillations.
Simple Moving Average (Simple Moving Average - SMA):
SMA = (P1 + P2 + P3 +??.+ Pn) / n
P = Price - regular price. Typically, the price calculation using the closing price (Close).
n - the period (the window, order, length) moving average. This is the number of bars on which the indicator is calculated.
The main drawback of SMA is that it responds to a single change course twice: when getting the value and at its disposal from the calculation. Therefore, we can use more advanced options display.
Weighted averages (Weighted Moving Average - WMA):
WMA = (w1 * P1 + w2 * P2 + w3 * P3 +??.+ wn * Pn) / (w1 + w2 + w3 +?? + Wn)
wi - the so-called "weight" or simply, the coefficient, which is assigned to each price. The closer the price to date, the higher the ratio is assigned a price.
Exponential moving average (Exponentially Moving Average - EMA):
EMA (t) = EMA (t - 1) + (K x [Price (t) - EMA (t - 1)]
where t - current time (current bar)
t - 1 - previous time (the previous bar)
K = 2 / (n + 1)
n - period average.
The main advantage of EMA is that it includes all the prices of the previous period, and not just the segment specified in the installation period. In this case, the later values will have greater weight.
Length Movings correct to select a specific tool in which you trade, and a specific scale of the graph.
Some traders believe that it is best to use the numbers from the Fibonacci series.
For example, the following values.
Recommended order of the average
Order of the average price chart
5-day 8, 13, 21
1-day 8, 13, 21, 55, 89
4-hour 8, 34, 55, 89
1-hour 8, 34, 55, 89
<15 min. 34, 55, 144

Using the indicator:
Point of intersection of Moving Average and the price chart is used as signals of the position opening in the direction of the trend. Inverse intersection are used as signals for closing the position.

In the first method is often a false signals, since markets are becoming every year more and more mobile. Therefore, as a signal using the intersection point of two Moving Average of different lengths (n1 and n2);

 

Moving Average of great length can themselves be pointers trend. For values of indicators over 40, they have little reaction to the wave motion graphics and indicate only the general direction of movement (trend);

 

The point of greatest divergence of average and the price chart indicates that the market is strongly "overheated and a correction.
Moving averages work well in trending markets, and very bad at without trending (flat), since the delay of moving averages will produce false alarms.

Alligator (alligator)
Based on moving averages Bill Williams (full exposition of the theory of Williams, see Williams' Chaos Theory) proposed by this indicator, which consists of three lines:
The blue line (Alligator's Jaw) - is the Balance Line for the interim period, which was used for plotting (13-period Smoothed Moving Average, moved into 8 bars into the future);
The red line (Alligator's Teeth) - is the Balance Line for a significant time period is ten times lower (8-period Smoothed Moving Average, moved by 5 bars into the future);
The green line (Alligator's Lips) - is the Balance Line for a significant time period, which is lower by one order of magnitude (5-period Smoothed Moving Average, moved by 3 bars into the future).
All these lines are on average prices:
MEDIAN PRICE = (HIGH + LOW) / 2
With the Alligator can determine the direction of an existing trend or its absence.
If all three lines are intertwined, the Alligator "asleep". At this time, the market traded in a little price range (in the flat), selecting the trader earned on past price movement. The longer sleeping Alligator, the hungrier it becomes and the stronger will be the subsequent price movement. While the Alligator is asleep, stay square. Waking up, Alligator opens mouth (Balance lines diverge) and starts to hunt for prey. After eating, alligator back to sleep (Balance Lines converge).
If the alligator is not sleeping, the market is bullish or bearish trend (production runs from Alligator):
• 1. if the price is above the Alligator's mouth, then the trend is upward;
• 2. if the price is below the Alligator's mouth, the trend is downward.

Ichimoku Kinko Hyo
A very popular indicator created as based on moving averages. Indicator Ishimoku create a Japanese analyst Hosoda (alias Sanzhdin Ishimoku).
The indicator consists of five lines:
• Tenkan-sen  - the average price for the first time interval (equal (high low) / 2, where the high and low - high and low for the period);
• Kijun-sen  - the average price in the second period;
• Senkou Span A  / Up Kumo - midway between Tenkan-sen and Kijun-sen, shifted forward on value of the second time interval;
• Senkou Span B  / Down Kumo - the average price for the third time interval shifted forwards by the value of the second time interval;
• Chinkou Span  - the closing price of the current bar, shifted back on the amount the second time interval.
Line Senkou Span A and Senkou Span B form a "cloud", which changes color when the intersection of these lines.
If the price chart located above the cloud, then the trend is upward. If the price chart below the cloud, then the market bearish sentiment. If prices are in the "cloud", it says fletovom market. Line motion Tenkan-sen sideways also talks about flat.
Key indicator signals:
Output prices from the cloud down to signal to sell up - on
purchase. Often, coming out of the clouds, the price of doing the path
approximately equal to the path up to the clouds.

 

The intersection of price and Chinkou Span (green line) is a signal to the transaction. If Chinkou Span crosses the price upwards, it is a buy signal, from top to bottom - for sale

 

If Tenkan-sen (red line) crosses Kijun-sen (blue line) from the top down, formed a sell signal, from the bottom up - by purchase

When trading in a "cloud" the price tends to the boundary of the clouds, to indicate Tenkan-sen (red line). If Tenkan-sen is directed downward, the price tends to cloud base if up - to the top

Signal bullish trend reversal or attenuation

Turn signal bearish trend or its decay

• The intersection of the lines of the indicator in the trend can be used as signals for open positions.
• If the MACD is below zero and there is no divergence, then the suppression of the lines from the bottom up talking about correcting upwards.
• If the MACD is above zero and there is no divergence, then the suppression of the lines from top to bottom indicates downward correction.

Indicators of "directed change" (+ /-dm) the probable direction of (adx)

The indicator has two roles:
• 1. identifies long-term trend of the market;
• 2. shows the power of the trend.
The indicator is constructed as two mutually antithetical lines /-DM and lines ADX:
• 1. first goes in the direction of price movement (line 1, DM);
• 2. second - in the opposite direction (line 2,-DM);
• 3. third (ADX) is absolute (in absolute value) difference between the lines /-DM, so the more lines of difference /-DM, the greater the value of ADX.
Signals Indicator Average Directional Movement Index (ADX):
• 1. intersection with the lines of extreme or spread lines at the maximum-minimum;
• 2. intersection of the lines DM and-DM is preceded by the appearance of a new trend or enhance the current trends - a very strong signal;
• 3. If the line above the DM-DM, then the trend - bullish, and vice versa;
• 4. if the lines diverge, the ADX rises, and the dynamics of the trend increases, and vice versa;
• 5. If the ADX is less than 20, the trend is very weak.

Relative strenght index – rsi

This is one of the most popular implementations of oscillators.
RSI = 100 - (100 / (1 U / D))

where
Un - the average of all UpClose period indicator calculation (n).
Dn - the average of all DownClose over the same period.
Basic signals for RSI:
• If the value is above 50, the upward trend in the market, if lower, then descending;
• Divergence (divergence) between the direction of wave motion graphics, and the indicator indicates the weakness of the current trend and a possible reversal;
• In a flat market output indicator from the overbought (oversold) is a signal to sell (purchase);
• In addition, it is one of the few indicators that are well suited to graphical analysis tools: support and resistance lines, graphic shapes.

Relative vigor index, rvi

Calculation of the index of relative vigor based on the idea that the upward market closing price, usually higher than the opening price. And in a bear market closing prices are usually lower opening prices.
To normalize the index change in price divided by the maximum range of prices for a bar:
RVI = (CLOSE - OPEN) / (HIGH - LOW)

Where:
OPEN - open price;
HIGH - the highest price;
LOW - the lowest price;
CLOSE - the closing price.
To eliminate the random fluctuations in price oscillator smoothed simple moving average with period 10. We also construct a signal line, 4-period symmetrically weighted moving average of the indicator.
Key signals Relative Vigor Index:
• Bullish divergence / bearish convergence - the main signal, indicating the weakness of the current trend;
• a good moment to open a position on the sale (purchase) will be crossing the line RVI signal line downwards (upwards) after the appearance of the chart bullish divergence / bearish convergence;
• In a flat market exit from the overbought (oversold)-signal to sell (buy).

Standard deviation
Measures the volatility of the market. This indicator describes the size of price fluctuations relative to the moving average. For example, if the indicator value is large, the market is volatile and the price bars are rather scattered with respect to moving average. If the indicator value is low, the market is characterized by low volatility and the price bars are close enough to the moving average.
Normally, this indicator is used as a component of other indicators. Thus, when calculating Bollinger Bands of the standard deviation of the tool is added to its moving average.
Calculation
StdDev (i) = SQRT (AMOUNT (j = i - N, i) / N)
AMOUNT (j = i - N, i) = SUM ((ApPRICE (j) - MA (ApPRICE (i), N, i)) ^ 2)

where:
StdDev (i) - Standard Deviation of the current bar;
SQRT - square root;
AMOUNT (j = i - N, i) - sum of the squares of the j = i - N to i;
N - smoothing period;
ApPRICE (j) - applied price of the j-th bar;
MA (ApPRICE (i), N, i) - any Moving Average of the current bar for N period;
ApPRICE (i) - applied price of the current bar.
The dynamics of the market consists of the successive alternation of periods of rest and activity bursts, so the approach to this indicator is simple:
• If the indicator value is too small, then there is a market in complete peace, it makes sense to expect a quick burst of activity;
• Conversely, if the indicator is extremely high, therefore, likely that activity will soon start declining
The index of trade channel
Indicator rasschityvetsya in several stages.
1) Calculate the so-called typical price
TP = (High + Low + Close) / 3
2) Further, the TP value is subtracted simple moving average calculated from the values of TP
D = TP - SMA (TP, n)
3) The value of a simple moving average calculated from the values of D is multiplied by 0.015
M = SMA (D. n) * 0,015
4) The final value of the indicator
CCI = M / D
Basic signals for CCI:
• Divergence (divergence) between the direction of wave motion graphics, and the indicator indicates the possibility of corrective movements;
• In a flat market output indicator from the overbought (oversold) is a signal to sell (purchase).
Stochastic line
The purpose of Stochastics - identifying price trends and cornering by monitoring the placement of the closing prices in the last series of peaks and bottoms.
The method of monitoring the following fact: when prices rise, their daily closing levels tend to be closer to the value of the maximum. If prices continue to rise, and the daily closing prices begin to fall, it signals the willingness of trend turn.
When prices fall, all the same only for the minima.
There are three stochastic lines:% K,% D,% R. They reflect the location of the current closing price relative to the selected time period.
% K = 100 ((C - Ln) / (Hn - Ln))

where
C - current closing price
Ln - lowest Low over the last n bars chart
Hn - is the highest High over the last n bars.
% D = SMA (% D, n1)
n1 - the value of a simple moving average.
Basic signals for Stochastic:
• Initially, the indicator was created to trade in the market in a state of a flat market. But now the trend movement using divergence (divergence) between the direction of wave motion graphics and display as a signal of a possible reversal or correction;
• In a flat market output indicator from the overbought (oversold) is a signal to sell (purchase);
• If the faster% K line crosses the slower% D up, it's a buy signal. If the faster% K line crosses the slower% D down, this is a signal to sell.

Concluding remarks
When working on a strong trend to treat oscillator signals with the utmost care, while false signals oscillators tend to talk about strengthening trend.
If the trend is upward, then most of the time oscillators are overbought, if the opposite is in oversold territory

Performance measures
Basic rules:
• Lower the volume - reduction of interest in the dynamics of the course or change in trend or a temporary stabilization of prices.
• Increased volume - increasing interest in the dynamics of the course, or reinforce existing dynamics, or the emergence of a new direction of price change.
• Sometimes a gradual decline in prices accompanied by drastic changes.
• Peak volume signals a possible trend reversal.
Indicator of the equilibrium volume (On Balance Volume - OBV)
1) If C (i)> C (i - 1),
OBV (i) = OBV (i-1) + Volume (i)
2) If C (i) <C (i - 1),
OBV (i) = OBV (i-1) - Volume (i)
where
C (i) - Current Close;
C (i - 1) - Close the previous bar;
Volume (i) - tekschee value of trading volume.
Accumulation / distribution (a / d)
A / D = SUM (((Close - Low) - (High - Close)) * Volume / (High - Low), N)
This indicator is the complicated version of the indicator OBV, so the method works with exactly the same.
Major signals for the A / D:
• If each new peak price confirmed by a new peak indicator, then this confirms the force of a bull (rising) trend;
• If each new trough price confirmed a new indicator of depression, then this confirms the force of a bear (downward) trend;
• Divergence (divergence) between the direction of wave motion graphics, and the indicator indicates the weakness of the current trend and a possible reversal;
• Break the trend line, built on the indicator warns of imminent breakdown of the trend line on a chart.
• The main signals for Force Index:
• The main signal - Divergence (divergence) between the direction of wave motion graphics and display. Indicates the possibility of a reversal of the market.
Index of cash flow ( mfi)
The indicator is calculated in several steps.
1) Calculate the so-called typical price:
TP = (High + Low + Close) / 3
2) If C> C (-1), the calculated + MF = TP * Volume
If C <(-1), then calculated - MF = TP * Volume

On this basis, calculated a positive cash flow (Positive Money Flow):
PMF =? (+ MF) - the sum of all + MF for n-bars.

And negative cash flow (Negative Money Flow):
PMF =? (-MF) - the sum of all-MF for n-bars.
3) Next, calculate the ratio of cash (Money Ratio):
MR = PMF / PMF
4). And the final value of the indicator (Money Flow Index):
MFI = 100 - (100 / (1 + MR)

where
C - Current Close;
C (-1) - Close the previous bar;
Volume - the value of trading volume for the current bar.
Major signals for the MFI:
• If each new peak price confirmed by a new peak indicator, then this confirms the force of a bull (rising) trend;
• If each new trough price confirmed a new indicator of depression, then this confirms the force of a bear (downward) trend;
• Divergence (divergence) between the direction of wave motion graphics, and the indicator indicates the weakness of the current trend and a possible reversal.
Index to facilitate the market ( bw mfi)
The indicator is calculated by the formula:
BW MFI = (HIGH - LOW) / VOLUME

Where:
HIGH - the highest price of the current bar; LOW - the lowest price of the current bar; VOLUME - the volume of the current bar.
Signals:
• Simultaneous growth of BW MFI and volume (Volume) says that more and more players enter the market (increasing volume), and new players take positions in the direction of the bar.
• The simultaneous drop in BW MFI and volume of talk about reducing the interest of participants to the dynamics of the price.
• BW MFI rose, and the volume down - the market does not support such a dynamic price. Price Change - the result of speculation.
BW MFI fell, and the volume increased - a fierce battle between bulls and bears (the amount raised), but the forces are roughly equal (the indicator has fallen). This bar B. Williams "curtsying. Typically, a breakthrough of such a bar is very important in terms of future price movement.