What Is The Fractal Adaptive Moving Average & How To Trade With It

Fractal Adaptive Moving Averages

The Fractal Adaptive Moving Average or better known as FRAMA, is a technical indicator developed by John Ehlers. The indicator is based on the algorithm that utilizes EMA (exponential moving average) and prevailing price fractals. What is the Fractal Adaptive Moving Average? According to John Ehlers, that market prices are fractal. Fractals are intricate patterns that create continuous shapes. Fractal shapes are almost similar. This means they have similar characteristics. This definition is based on a mathematical principle. John Ehlers stated that if a certain pattern is removed from charts like a 5-minute or a daily chart, a trader may …READ MORE

What Are Support & Resistance Indicators & How To Trade Them

Support and Resistance Indicators

The support and resistance levels can help traders to try and identify the direction of the market by pointing price data. What are Support and Resistance indicators? The support and resistance level indicators are those tools that prevent the price from going in a particular direction. Support levels occur when there is a high demand for a certain asset. When the price starts to decline, it forms a support line.  The resistance level appears when there is an increase in the supply of a specific asset. When the price rises, it creates a resistance line. The support and resistance indicators …READ MORE

What Are Volatility Indicators & How To Trade Them

Volatility Indicators

Volatility indicators are a type of technical analysis tool that are used to try and determine the overall market volatility and for potential exit and entry points into the markets. What are Volatility indicators? Market volatility moves in cycles of highs and lows. Volatility tells traders about the direction of the current market and indicates future price movements. Traders need to look for different kinds of volatility for price movements: They are: Historical volatility – calculated from previous price changes. Future volatility – makes predictions about future movements. Forecast volatility – an overall estimate of future volatility. Implied volatility – …READ MORE

What Are Trend Indicators & How To Trade Them

Trend Indicators

Trend indicators are used to follow the price movements of an asset in a particular direction. Traders will plot them on their charts to try and clearly identify the direction of the market. What are the Trend Indicators? Trend indicators are based on mathematical calculations that illustrate signal lines to identify the market situation. Types of Trend traders There are plethora of trend indicators. Some of the most common are: Moving Averages MACD (moving average convergence divergence) RSI (relative strength index) Stochastics Bollinger Bands OBV (on balance volume) Fibonacci retracements ADX (average directional index) Ichimoku cloud Standard deviation Here’s an …READ MORE

What Are Oscillator Indicators & How To Trade Them

Oscillator Indicators

An oscillator is a type of technical analysis tool that moves between two values. These values, when built on an indicator to measure the strength and weakness of a trend. These types of indicators are also called momentum indicators. What are the Oscillator indicators? Oscillator indicators have specific characteristics. In technical analysis, a trader gauges oscillator usually from 0 to 100.  They mention price fluctuations in overbought or oversold conditions.  When the oscillator’s value reaches upward, it’s an overbought condition, and when the oscillator reaches downwards, it’s an oversold condition. Oversold and overbought conditions are an indication of a possible …READ MORE

What Are Momentum Indicators & How To Trade Them

Momentum Indicators

Momentum indicators are a type of technical indicator that can be used to help try and determine an asset’s price or weakness. What are the Momentum indicators? In Physics, the term Momentum refers to a moving object. Similarly, in financial markets, Momentum is the movement of an asset’s price. It measures upward or downward price fluctuations. Most of the indicators that measure Momentum use specific values to suggest an overbought or oversold condition. When the asset is overbought, this means there is an intense buying pressure and signals a price decline. On the other hand, when the asset is oversold, …READ MORE

What Are Cycle Indicators & How To Trade With Them

Cycle Indicators

The cycle indicators are a form of oscillating indicators that analyse market cycles. The market cycles are form of price movements. What are Cycle indicators? According to the theory, financial markets move in cycles from bearish to bullish or back again to bearish. These market cycles often repeat, and in this way, they indicate price patterns. The theory also defines that the market moves in small cycles within the larger ones on shorter timeframes. Similarly, on longer timeframes, the larger cycles contain smaller cycles. This assumption makes cycle indicators more worthy because there is no way that a trader can …READ MORE

What Is The Chaikin Money Flow Indicator & How To Trade With It

Chaikin Money Flow

Marc Chaikin developed Chaikin Money Flow or CMF. It measures the volume-weighted average of accumulation and distribution over a certain period. What is the Chaikin Money Flow? The main idea behind the CMF is that the closer the closing price is to the high, the more accumulation occurs. On the other hand, the closer the closing price is to the low, the more distribution occurs. If the price action consistently closes above the candlestick or bar’s midpoint, the CMF is positive. Whereas, if the price closes below the midpoint, the CMF is negative. The formula for the Chaikin Money Flow …READ MORE

What Is The Rate of Change Indicator & How To Trade With It

Rate of Change Indicator

The Rate of Change Indicator is a momentum indicator that describes the percentage price change between the current price and the previous price. The ROC is also known as the PROC (price rate of change indicator). What is the Rate of Change indicator? Just like other momentum indicators; the ROC forecasts change in price based on calculations. The percentage is obtained by plotting the ROC against zero. When the price moves above zero, the ROC indicates an uptrend, while it signifies a downtrend when the price moves into negative territory. The formula for calculating the ROC is: ROC = closing …READ MORE