In this tutorial we’ll deal with general financial concepts, such as asset allocation, dollar cost averaging, diversification, including the more complex ones. These theories have been developed – some of them by investors themselves...
A futures contract is an agreement in which two parties agree to buy or sell a set of financial instruments or a particular physical commodity for delivery in the future at a pre-determined price....
The Federal Reserve of the United States (US), often referred to by its nickname of “The Fed”, is a government-run body that is responsible for economic and monetary policies, as well as regulating the...
Investing on margin in some ways can be compared to playing blackjack in a casino on borrowed money. If you win, you can double the money you brought in without a sweat. However, there...
PRICE CHANNEL Commodity or stock prices are in constant vacillation. When you draw a pair of parallel lines to approximate the trend of the prices, you are creating a price channel. When the prices...
MOVING AVERAGE The Mean When dealing with time series data, a moving average smooths out short-term fluctuations. It also highlights long-term trends. Practical applications of the moving average would be in the analyses of...
PIVOT POINT Pivot point is a redictive indicator of market movement. It is Simply an Average A pivot point is calculated as an average of significant prices, namely the High, Low, and Close from...
BOLLINGER BANDS Bollinger bands measure the height of the price relative to previous trades. This is a technical analysis tool invented by John Bollinger in the 1980s. evolved from the concept of trading bands....
ON-BALANCE VOLUME A price-volume relationship. Based on a cumulative volume, the on-balance volume relates price and volume in the stock market, and it has the formula: OBV = OBVprev + volume … if close...
MONEY FLOW Price times volume Money flow approximates the dollar value of a certain day’s trading. The formula is price multiplied by volume. Generally, a value of 80 is counted as overbought while a...
TRIX INDICATOR Price times volume The Trix Indicator (TI) shows the slope of a triple-smoothed exponential moving average. The term Trix is actually a shortcut of “triple exponential” and was developed by Jack Hutson...
STOCHASTIC OSCILLATOR (SO) A momentum indicator that uses support and resistance levels Calculations Dr. George Lane promoted this indicator in the 1950s. “Stochastic” refers to the location of a current price in relation to...
RELATIVE STRENGTH INDEX (RSI) a momentum oscillator J. Welles Wider developed the RSI and published it in a 1978 book, “New Concepts in Technical Trading Systems”. It was also published in Commodities magazine (now...
PARABOLIC SAR (PS) used to find trends in market prices and securities J. Welles Wilder Jr. devised the Parabolic Stop and Reverse (SAR) to find trends in market prices or securities. The method can...
MOVING AVERAGE CONVERGENCE/DIVERGENCE (MACD) a lagging indicator that is also a form of Absolute Price Oscillator Definitions Gerald Appel developed MACD as a technical analysis indicator in the late 1970s. MACD shows the difference...