Average True Range: the ATR indicator

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The ATR is an attempt at finding out about trader sentiment by comparing price ranges over a period of time. To do this in an easily understood and observed manner, the range values are presented in the form of an exponential moving average. Note: Past performance is not indicative of future results. As we see,…

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Fibonacci Series and Forex: The Power of Nature

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The Fibonacci series is the infinite sequence of numbers (0, 1, 1, 2, 3, 5, 8, 13 ..) in which each item is the sum of the preceding two. For example, 2= 1+1, 5 = 3+2, and so on. This sequence has been recognized and examined in Europe since the 14th century, but Arabs and…

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Gator Oscillator

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What is the Gator Oscillator? The Gator oscillator is a forex trading tool developed by Bill Williams. It is closely related to the similar Alligator oscillator. As a trend indicator itd is most useful in markets that display strong directional action. Note: Past performance is not indicative of future results. On this chart, the upper…

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Ichomoku Kinko Hyo Indicator

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Overview The Ichimoku Kinko Hyo, Ichimoku Cloud, Equilibrium Chart was developed by Japanese newspaper writer Goichi Hosoda in 1968, and it is more familiar to futures and equity traders than to forex traders. In spite of its lacklustre popularity, however, the indicator is powerful, and innovative, worthy of greater attention than it receives currently in…

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Alligator Oscillator

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Introduction The Alligator oscillator is very similar to the Gator oscillator which we have examined previously in these pages. The difference between the two indicators lies almost entirely in the presentation of data. While the Gator oscillator presents any valid signals in a histogram below the price chart, the Alligator chart provides the oscillators in…

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MACD Indicator

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One of the most popular and common indicators used by forex traders today, the MACD is a trend indicator used to gauge the strength and direction of an ongoing trend. Developed in the 60s by Gerald Appel, MACD is a simple, and straightforward tool easy to grasp and use. The MACD is only useful in…

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Bollinger Bands: The Best Volatility Gauge for the Intraday Trader

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Introduction One of the more common technical tools used by traders, the Bollinger Bands were created by John Bollinger in the early 80s. The tool was not intended as a technical analysis item for trading decisions, but its perceived utility for that purpose has made it widely popular in the ensuing decades. It is likely…

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Demarker Indicators

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The Demarker indicator is named after Tom Demarker who claims to have developed this indicator to overcome the shortcomings of other overbought/oversold oscillators. There are different versions of it  in the market; in some cases the indicator uses 0 and 1 as the maximum and minimum of oscillation, while in others the typical 0-100 range…

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Commodity Channel Index Indicator

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Developed by Donald Lambert and first made public in 1980, the commodity channel index is a well-known tool used by some commodity and forex traders for identifying secular moves, and trading them. The CCI has a crossover line at zero, and an overbought level at 100, while values below -100 are regarded as signalling an…

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Parabolic SAR Indicator

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Parabolic SAR (Stop and Reverse) is an indicator developed by J. Willes Wilder to discover and exploit profitable trends in all kinds of markets. It is a popular tool among technical traders, and a straightforward and as a simple mechanism for analyzing the markets, it offers some unique advantages over other tools. Below we have…

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Elliott Wave Theory

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Elliott Wave Theory is a popular method of analysis that applies a technical approach with a fundamental analysis interpretation. Elliott Wave Theorists also concentrate on the price action strictly, and agree to the notion that the price is the beginning and end of all analysis, but they recognise that there exists an important relationship between…

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Larry Williams Indicators

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As the name suggests, Larry Williams indicators are a group of technical tools developed and published by the renowned commodity and stock trader Larry Williams in a series of books and articles since the 80s.  In this article we’ll present a brief overview of the most popular ones among the tools developed by him. The…

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Momentum Indicators

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What is momentum? The term has a specific meaning in physics, and perhaps it is easier to understand the momentum of prices by considering an analogy. We know that the speed of a swinging pendulum will vary along the vertical axis, for example, as the pendulum moves from the bottom to the uppermost extent of…

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Moving Averages: What Are They?

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Moving Averages are technical tools designed to measure the momentum and direction of a trend. The idea behind their creation is simple. Price action is thought to fluctuate around the average value over a period of time, and we can expect to be able to the represent the market’s momentum by calculating if the current…

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Oscillators Explained

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Oscillators are a group of indicators that confine the theoretically infinite range of the price action into more practical limits. They were developed due to the difficulty of identifying a high or low value in the course of trading. Although we may have mental concepts of what is high or low in a typical day’s…

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Stochastics Indicator

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Stochastics is one of the oldest analytical tools in the market and its great advantage is its simplicity. But what is the best way of using it, and what pitfalls should you avoid?

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