ADX - Average Directional Index

Posted in Indicators of technical analysis

ADX indicator was created by Welles Wilder. ADX is included in Directional Movement System, that is described in his "New Concepts in Technical Trading Systems" book. Average Directional Index belongs to the oscillators. It is used to determine the trend strength on the market. ADX values varies between 0 and 100, value bellow 20 meaning a weak trend, values above 40 meaning very strong trend. Values above 60 are rare enough.

Aroon indicator

Posted in Indicators of technical analysis

Aroon Indicator was created by Tushar Chande in 1995. It is used to identify the prevailing trend on the market and the probability of changing the trend. Similar to ADX, it consist of two main parts - Aroon Up (the strength of an Uptrend) and Aroon Down (the strength of an Downtrend).

PSAR - Parabolic Stop And Reverse

Posted in Indicators of technical analysis

PSAR was created by J. Welles Wilder and described in his „New concepts in technical trading systems“ book. PSAR means Parabolic Stop And Reverse. It is a trading tool that tells us when to change our positions - from BUY to SELL and vice versa. It is also used to identify the right moment to exit market - e.g. to set Stop Loss. The aim of PSAR indicator is to define the point at which we should Change or Exit our positions.

HMA - Hull Moving Average

Posted in Indicators of technical analysis

HMA - Hull Moving Average was created by Allan Hull. Hull moving average serves mainly to idenfity the prevailing market trend. Unlike an EMA the Hull's Moving Average curve is considerably smoother and follows the price graph much closer. It is used especially for middle-term and long-term trading.

KAMA - Kaufman Adaptive Moving Average

Posted in Indicators of technical analysis

KAMA - Kaufman Adaptive Moving Average was created by Perry Kaufman and first described in his "Smarter Trading "(1995). Kaufman created KAMA to take into consideration the noise of the market. If there is an Uptrend with some small swings prevailing on the market, the market noise is just marginal and KAMA follows the price very closely. On the other hand if the market moves sideways (Ranging market) – it means Close price closes some days up some days down, the market noise is very High. KAMA follows the price with larger distance to lessen the number of false signals then.

STC - Schaff Trend Cycle

Posted in Indicators of technical analysis

STC - Schaff Trend Cycle was created by Dough Schaff. STC combines the advantages of trend-following indicators, cyclic and counter-trend oscillators into one single indicator. Schaff Trend Cycle is not based on Close price as it is usual, but its calculation is based on another indicator. So we can get Buy and Sell signals excluding many false whipsaws. Moreover STC generates signals soon enough, even before the trend changes. That's the reason why it is considered to be one of the best indicators ever.

T3 Moving Average

Posted in Indicators of technical analysis

Tillson's T3 is a kind of Moving average. Tim Tillson described it in "Technical Analysis of Stocks and Commodities", January 1998. He named his article "Better Moving Averages".

Tillson’s moving average becomes a popular indicator of Technical analysis. Its advantage is that it gets less lag with the price chart and its curve is considerably smoother. By using it, the trader can get early entry and less number of false signals.

How to trade

Posted in Trading basics is focused on an electronic trading on the markets. You can find here a lot of information about technical analysis, brokers, commodities etc. Its time to couple all the useful information into one summary article. So, how does it all fit together? How can I trade any market?

Futures Trading

Posted in Trading basics

What exactly is commodity trading? The question that might many newcomers ask when they visit this site. Some of them have at least a rough idea that gold, silver, corn, or oil belong to the traded commodities. Fewer people know that recently you can also trade e.g. electricity or weather on the commodity exchange. So we came closer to the concept that more accurately captures the essence of the contracts being traded - Futures Trading.