Awesome Oscillators
Awesome oscillators are instruments that people use to look at non-trending charts. To monitor the direction of a stock it's essential to use Moving Averages (MA) and Trends. When a chart isn't showing a defined trend in a particular direction, a technician will use awesome oscillators. It follows that the awesome oscillators can be at their most effective once a certain security goes into a trend that is vertical or horizontal or has no specific pattern.
At times when a certain stock is overbought or oversold, these awesome oscillators become very useful. Chartists will often use these awesome indicators when they are noticing that a stock they are watching has a decline in the rate of upward trend and moves into an overbought situation.
What this means is that the amount of buys has begun to drop away over a few trading days. In turn, this results in traders starting to dispose of some of their shares
Awesome Oscillators - some examples
One of the awesome oscillators
This awesome oscillator assesses the margin in between the prices that are current and those that were in place some time ago. And so, the rate of change will rise at the same time that the trend of the price increases as well as drop with a trend that goes down happens, The ROC's relative change will be affected by the size of the price changes.
It would be wise to pay close attention to this awesome oscillator if you want to know when a market is about to change. It may be some period of time after an oversold or overbought signal has moved that a current trend stays that way,
It's not uncommon to be able to forecast changes in prices by assessing the previous cycles of this awesome oscillator and putting it onto current market conditions. The 'wave' cycle of the prices are stimulated by the bull and bear conditions creating resistance.
High ROC values tend to indicate an overbought stock. But because an overbought market might carry on in this way for a period, it might not be best to hang on for any possible market change.
MFI - an awesome oscillator
Continuing the theme of awesome oscillators, Money flow index (MFI) is an awesome oscillator that is worked out over a certain time period and ranges from 100 down to 0. This demonstrates how money can flow as a proportion of all of the increasing days that are downs and ups. The money flow can be calculated by multiplying volume by typical price. The typical price is worked out by averaging the day's high, low and closing price. Multiplied by the volume of the day gives us the money flow. Over a time frame, these totals can give a range over certain days that a typical price exceeds is a positive money flow and below is seen as a negative money flow. Dividing the positive money flow by the negative money flow will then give the money ratio. The money flow percentage will be derived from the following: 100 x positive money flow / (positive + negative money flow).
This awesome oscillator has now yielded a money flow gauge that states any value over 80% means overbought but beneath 20% is oversold.
Overall it's essential to state that money flow will apply to the dollar value of any stocks traded where enthusiasm for buying is called a day that is 'up' but enthusiasm to sell creates a 'down' day.
A large extreme in one direction or the other will result in a reversal of prices.
RSI - yet another awesome oscillator
This will overlay historical and current strong or weak points of a recent day's trading based upon it's prices at the close.
Classed as one of the momentum oscillators, this is an awesome oscillator that will follow the speed and size of the price movement direction. Calculating the levels between higher and lower closing prices is the momentum calculated by this awesome oscillator.
Strong changing stocks show a bigger RSI compared to those with weaker changes.
Using a range of 0 to 100, this awesome oscillator will normally be used over a 14 day time period and 'highs' are classed as 70 and 'lows' as 30.
Bottom Line
It becomes noticeable that these tools start to look similar. Using them in combination will become handy for knowing when to leave or join a trade.
Professional traders use these awesome oscillators which is probably why they seem ahead of the game when buying and selling stocks.
At times when a certain stock is overbought or oversold, these awesome oscillators become very useful. Chartists will often use these awesome indicators when they are noticing that a stock they are watching has a decline in the rate of upward trend and moves into an overbought situation.
What this means is that the amount of buys has begun to drop away over a few trading days. In turn, this results in traders starting to dispose of some of their shares
Awesome Oscillators - some examples
One of the awesome oscillators
This awesome oscillator assesses the margin in between the prices that are current and those that were in place some time ago. And so, the rate of change will rise at the same time that the trend of the price increases as well as drop with a trend that goes down happens, The ROC's relative change will be affected by the size of the price changes.
It would be wise to pay close attention to this awesome oscillator if you want to know when a market is about to change. It may be some period of time after an oversold or overbought signal has moved that a current trend stays that way,
It's not uncommon to be able to forecast changes in prices by assessing the previous cycles of this awesome oscillator and putting it onto current market conditions. The 'wave' cycle of the prices are stimulated by the bull and bear conditions creating resistance.
High ROC values tend to indicate an overbought stock. But because an overbought market might carry on in this way for a period, it might not be best to hang on for any possible market change.
MFI - an awesome oscillator
Continuing the theme of awesome oscillators, Money flow index (MFI) is an awesome oscillator that is worked out over a certain time period and ranges from 100 down to 0. This demonstrates how money can flow as a proportion of all of the increasing days that are downs and ups. The money flow can be calculated by multiplying volume by typical price. The typical price is worked out by averaging the day's high, low and closing price. Multiplied by the volume of the day gives us the money flow. Over a time frame, these totals can give a range over certain days that a typical price exceeds is a positive money flow and below is seen as a negative money flow. Dividing the positive money flow by the negative money flow will then give the money ratio. The money flow percentage will be derived from the following: 100 x positive money flow / (positive + negative money flow).
This awesome oscillator has now yielded a money flow gauge that states any value over 80% means overbought but beneath 20% is oversold.
Overall it's essential to state that money flow will apply to the dollar value of any stocks traded where enthusiasm for buying is called a day that is 'up' but enthusiasm to sell creates a 'down' day.
A large extreme in one direction or the other will result in a reversal of prices.
RSI - yet another awesome oscillator
This will overlay historical and current strong or weak points of a recent day's trading based upon it's prices at the close.
Classed as one of the momentum oscillators, this is an awesome oscillator that will follow the speed and size of the price movement direction. Calculating the levels between higher and lower closing prices is the momentum calculated by this awesome oscillator.
Strong changing stocks show a bigger RSI compared to those with weaker changes.
Using a range of 0 to 100, this awesome oscillator will normally be used over a 14 day time period and 'highs' are classed as 70 and 'lows' as 30.
Bottom Line
It becomes noticeable that these tools start to look similar. Using them in combination will become handy for knowing when to leave or join a trade.
Professional traders use these awesome oscillators which is probably why they seem ahead of the game when buying and selling stocks.
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