-
Notifications
You must be signed in to change notification settings - Fork 0
/
Copy pathgupiao.html
538 lines (531 loc) · 34.3 KB
/
gupiao.html
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157
158
159
160
161
162
163
164
165
166
167
168
169
170
171
172
173
174
175
176
177
178
179
180
181
182
183
184
185
186
187
188
189
190
191
192
193
194
195
196
197
198
199
200
201
202
203
204
205
206
207
208
209
210
211
212
213
214
215
216
217
218
219
220
221
222
223
224
225
226
227
228
229
230
231
232
233
234
235
236
237
238
239
240
241
242
243
244
245
246
247
248
249
250
251
252
253
254
255
256
257
258
259
260
261
262
263
264
265
266
267
268
269
270
271
272
273
274
275
276
277
278
279
280
281
282
283
284
285
286
287
288
289
290
291
292
293
294
295
296
297
298
299
300
301
302
303
304
305
306
307
308
309
310
311
312
313
314
315
316
317
318
319
320
321
322
323
324
325
326
327
328
329
330
331
332
333
334
335
336
337
338
339
340
341
342
343
344
345
346
347
348
349
350
351
352
353
354
355
356
357
358
359
360
361
362
363
364
365
366
367
368
369
370
371
372
373
374
375
376
377
378
379
380
381
382
383
384
385
386
387
388
389
390
391
392
393
394
395
396
397
398
399
400
401
402
403
404
405
406
407
408
409
410
411
412
413
414
415
416
417
418
419
420
421
422
423
424
425
426
427
428
429
430
431
432
433
434
435
436
437
438
439
440
441
442
443
444
445
446
447
448
449
450
451
452
453
454
455
456
457
458
459
460
461
462
463
464
465
466
467
468
469
470
471
472
473
474
475
476
477
478
479
480
481
482
483
484
485
486
487
488
489
490
491
492
493
494
495
496
497
498
499
500
501
502
503
504
505
506
507
508
509
510
511
512
513
514
515
516
517
518
519
520
521
522
523
524
525
526
527
528
529
530
531
532
533
534
535
536
537
538
<!DOCTYPE html>
<html>
<head>
<meta charset="utf-8">
<title></title>
</head>
<body>
<article id="article_1-0"
class="comp article mntl-article mntl-article--three-column sc-ad-container right-rail"
data-rail-bp="mntl-bp-md" data-tracking-container="true">
<div class="loc article-pre-content">
<h1 id="article-heading_1-0" class="comp article-heading mntl-text-block">7 Technical Indicators to
Build a Trading Toolkit</h1>
</div>
<div id="article-body_1-0" class="comp article-body mntl-block" data-contain-tooltips="true">
<div id="mntl-sc-page_1-0" class="comp mntl-sc-page mntl-block article-body-content"
data-sc-sticky-offset="80" data-sc-ad-label-height="0" data-sc-ad-track-spacing="90"
data-sc-min-track-height="250" data-sc-max-track-height="600" data-sc-breakpoint="50em"
data-sc-load-immediate="2" data-sc-content-positions="[300, 1, 1, 1250, 1, 1, 1, 1]"
data-bind-scroll-on-start="true">
<p id="mntl-sc-block_1-0" class="comp mntl-sc-block finance-sc-block-html mntl-sc-block-html">
Technical indicators are used by traders to gain insight into the supply and demand of
securities and market psychology. Together, these indicators form the basis of technical
analysis. Metrics, such as trading volume,
provide clues as to whether a price move will continue. In this way, indicators
can be used to generate buy and sell signals.
</p>
<div id="mntl-sc-block_2-0" class="comp mntl-sc-block mntl-sc-block-adslot mntl-block"></div>
<p id="mntl-sc-block_3-0" class="comp mntl-sc-block finance-sc-block-html mntl-sc-block-html">
Seven of the best indicators for day trading are:
</p>
<div id="mntl-sc-block_4-0" class="comp mntl-sc-block mntl-sc-block-adslot mntl-block"></div>
<ul id="mntl-sc-block_5-0" class="comp mntl-sc-block finance-sc-block-html mntl-sc-block-html">
<li>On-balance volume (OBV)</li>
<li>Accumulation/distribution (A/D) line</li>
<li>Average directional index</li>
<li>Aroon oscillator</li>
<li>Moving average convergence divergence (MACD)</li>
<li>Relative strength index (RSI)</li>
<li>Stochastic oscillator</li>
</ul>
<div id="mntl-sc-block_6-0" class="comp mntl-sc-block mntl-sc-block-adslot mntl-block"></div>
<p id="mntl-sc-block_7-0" class="comp mntl-sc-block finance-sc-block-html mntl-sc-block-html">
You don't need to use all of them, rather pick a few that you find helpful in making better
trading decisions. Learn more about how these indicators work and how they can help you day
trade successfully.
</p>
<div id="mntl-sc-block_8-0" class="comp mntl-sc-block mntl-sc-block-adslot mntl-block"></div>
<div id="mntl-sc-block_9-0" class="comp mntl-sc-block finance-sc-block-callout mntl-block">
<div id="mntl-sc-block_10-0"
class="comp mntl-sc-block mntl-sc-block-callout mntl-block theme-whatyouneedtoknow"
data-tracking-id="mntl-sc-block-callout" data-tracking-container="true">
<h3 id="mntl-sc-block-callout-heading_1-0"
class="comp mntl-sc-block-callout-heading mntl-text-block">Key Takeaways</h3>
<div id="mntl-sc-block-callout-body_1-0"
class="comp mntl-sc-block-callout-body mntl-text-block">
<ul>
<li>Technical traders and chartists have a wide variety of indicators, patterns,
and oscillators in their toolkit to generate signals.</li>
<li>Some of these consider price history, others look at trading volume, and yet
others are momentum indicators. Often, these are used in tandem or
combination with one another.</li>
<li>Here, we look at seven top tools market technicians employ, and that you
should become familiar with if you plan to trade based on technical
analysis.</li>
</ul>
</div>
</div>
</div>
<span class="heading-toc" id="toc-tools-of-the-trade"></span>
<h2 id="mntl-sc-block_11-0"
class="comp mntl-sc-block finance-sc-block-heading mntl-sc-block-heading"> <span
class="mntl-sc-block-heading__text"> Tools of the Trade </span> </h2>
<p id="mntl-sc-block_12-0" class="comp mntl-sc-block finance-sc-block-html mntl-sc-block-html">
The tools of the trade for day traders and technical analysts consist of charting tools that
generate signals to buy or sell, or which indicate trends or patterns in the market. Broadly
speaking,
there are two basic types of technical indicators:
</p>
<div id="mntl-sc-block_13-0" class="comp mntl-sc-block mntl-sc-block-adslot mntl-block">
<div id="mid-brokertable_1-0"
class="comp mid-brokertable finance-ad-table mm-ads-ad-table mntl-block dynamic-inline"
data-ad-table="mid-brokertable" data-right-rail-index="4">
<div id="mm-ads-ad-table__heading_2-0"
class="comp mm-ads-ad-table__heading mntl-text-block">Take the Next Step to Invest
</div>
<div id="mm-ads-ad-table__disclosure_2-0"
class="comp mm-ads-ad-table__disclosure mntl-block mm-ads-ad-table__disclosure--initialized"
data-tracking-container="true"><button id="mm-ads-ad-table__disclosure-label_2-0"
class="comp mm-ads-ad-table__disclosure-label mntl-button"> Advertiser
Disclosure
</button>
<div id="mm-ads-ad-table__disclosure-description_2-0"
class="comp mm-ads-ad-table__disclosure-description mntl-block">
<div id="mm-ads-ad-table__disclosure-close_2-0"
class="comp mm-ads-ad-table__disclosure-close mntl-text-block">×</div>
<div id="mm-ads-ad-table__disclosure-content_2-0"
class="comp mm-ads-ad-table__disclosure-content mntl-text-block">The offers
that appear in this table are from partnerships from which Investopedia
receives compensation. This compensation may impact how and where listings
appear. Investopedia does not include all offers available in the
marketplace.</div>
</div>
</div>
<div id="mm-ads-ad-table__content_2-0" class="comp mm-ads-ad-table__content mntl-block">
<div id="mm-ads-ad-table-column_4-0"
class="comp mm-ads-ad-table-column mm-ads-gpt-dynamic-adunit mm-ads-gpt-adunit gpt adtable dynamic">
<div id="mid-brokertable1" class="wrapper" data-type="adtable"
data-pos="mid-brokertable1" data-priority="9" data-sizes="["fluid"]"
data-rtb="false" data-wait-for-third-party="false" data-targeting="{}"></div>
</div>
<div id="mm-ads-ad-table-column_5-0"
class="comp mm-ads-ad-table-column mm-ads-gpt-dynamic-adunit mm-ads-gpt-adunit gpt adtable dynamic">
<div id="mid-brokertable2" class="wrapper" data-type="adtable"
data-pos="mid-brokertable2" data-priority="9" data-sizes="["fluid"]"
data-rtb="false" data-wait-for-third-party="false" data-targeting="{}"></div>
</div>
<div id="mm-ads-ad-table-column_6-0"
class="comp mm-ads-ad-table-column mm-ads-gpt-dynamic-adunit mm-ads-gpt-adunit gpt adtable dynamic">
<div id="mid-brokertable3" class="wrapper" data-type="adtable"
data-pos="mid-brokertable3" data-priority="9" data-sizes="["fluid"]"
data-rtb="false" data-wait-for-third-party="false" data-targeting="{}"></div>
</div>
</div>
</div>
</div>
<ol id="mntl-sc-block_14-0" class="comp mntl-sc-block finance-sc-block-html mntl-sc-block-html">
<li><strong>Overlays:</strong> Technical indicators that use the same scale as prices
are plotted over the top of the prices on a stock chart. Examples include moving
averages and Bollinger Bands® or Fibonacci lines.</li>
<li><strong>Oscillators:</strong> Rather than being overlaid on a price chart,
technical indicators that oscillate between a local minimum and maximum are plotted
above or below a price chart. Examples include the stochastic
oscillator, MACD, or RSI. It will mainly be these second kind of technical
indicators that we consider in this article.</li>
</ol>
<div id="mntl-sc-block_15-0" class="comp mntl-sc-block mntl-sc-block-adslot mntl-block">
<div id="native_1-0" class="comp native mm-ads-native " style="--native-ad-height: auto"
data-right-rail-index="3">
<div id="mm-ads-native__adunit_1-0"
class="comp mm-ads-native__adunit mm-ads-gpt-dynamic-adunit mm-ads-gpt-adunit scads-to-load gpt native dynamic js-lazy-ad is-requested">
<div id="native" class="wrapper" data-type="native" data-pos="native" data-priority="4"
data-sizes="[[1, 3],"fluid"]" data-rtb="false"
data-wait-for-third-party="false" data-targeting="{}"></div>
</div>
</div>
</div>
<p id="mntl-sc-block_16-0" class="comp mntl-sc-block finance-sc-block-html mntl-sc-block-html">
Traders often use several different technical indicators in tandem when analyzing a
security. With literally thousands of different options, traders must choose the indicators
that work best for them and familiarize themselves with how they work.
</p>
<div id="mntl-sc-block_17-0" class="comp mntl-sc-block mntl-sc-block-adslot mntl-block"></div>
<p id="mntl-sc-block_18-0" class="comp mntl-sc-block finance-sc-block-html mntl-sc-block-html">
They may also combine technical indicators with more subjective forms of technical analysis,
such as looking at chart patterns, to come up with trade ideas. Technical
indicators can also be incorporated into automated trading systems given their quantitative
nature.
</p>
<div id="mntl-sc-block_19-0" class="comp mntl-sc-block mntl-sc-block-adslot mntl-block"></div>
<span class="heading-toc" id="toc-1-on-balance-volume"></span>
<h2 id="mntl-sc-block_20-0"
class="comp mntl-sc-block finance-sc-block-heading mntl-sc-block-heading"> <span
class="mntl-sc-block-heading__text"> 1. On-Balance Volume </span> </h2>
<p id="mntl-sc-block_21-0" class="comp mntl-sc-block finance-sc-block-html mntl-sc-block-html">
Use the on-balance volume to measure the positive and negative flow
of volume in a
security over time. The indicator is a running total of up volume minus down volume. Up volume
is how
much volume there is on a day when the price rallies. Down volume is
the volume on a day when the price falls. Each day volume is added or subtracted from the
indicator based on whether the price went higher or lower.
</p>
<div id="mntl-sc-block_22-0" class="comp mntl-sc-block mntl-sc-block-adslot mntl-block"></div>
<p id="mntl-sc-block_23-0" class="comp mntl-sc-block finance-sc-block-html mntl-sc-block-html">
When OBV rises, it shows that buyers will step in and push the price higher. When
OBV falls, the selling volume outpaces the buying volume, which indicates lower
prices.<span class="mntl-inline-citation mntl-dynamic-tooltip--trigger" data-id="#citation-1"
tabindex="0">1</span> In this way, it acts like a trend
confirmation tool. If price and OBV are rising, that helps indicate a continuation of the
trend.
</p>
<div id="mntl-sc-block_24-0" class="comp mntl-sc-block mntl-sc-block-adslot mntl-block"></div>
<p id="mntl-sc-block_25-0" class="comp mntl-sc-block finance-sc-block-html mntl-sc-block-html">
Traders who use OBV also watch for divergence. This
occurs when the indicator and price are going in different directions. If the price is
rising but OBV is falling, that could indicate that the trend is not backed by strong
buyers and could soon reverse.
</p>
<div id="mntl-sc-block_26-0" class="comp mntl-sc-block mntl-sc-block-adslot mntl-block"></div>
<span class="heading-toc" id="toc-2-accumulationdistribution-line"></span>
<h2 id="mntl-sc-block_28-0"
class="comp mntl-sc-block finance-sc-block-heading mntl-sc-block-heading"> <span
class="mntl-sc-block-heading__text"> 2. Accumulation/Distribution Line </span> </h2>
<p id="mntl-sc-block_29-0" class="comp mntl-sc-block finance-sc-block-html mntl-sc-block-html">
One of the most commonly used indicators to determine the money
flow in and out of a security is the accumulation/distribution line.
</p>
<div id="mntl-sc-block_30-0" class="comp mntl-sc-block mntl-sc-block-adslot mntl-block"></div>
<p id="mntl-sc-block_31-0" class="comp mntl-sc-block finance-sc-block-html mntl-sc-block-html">
Similar to OBV, this indicator also accounts for the for the period and where the close is in relation to that range in
addition to the closing price of the security for the period.<span
class="mntl-inline-citation mntl-dynamic-tooltip--trigger" data-id="#citation-2"
tabindex="0">2</span> If a stock finishes near its high, the indicator gives volume more
weight than if it closes near the midpoint of its range. The different calculations mean
that OBV will work better in some cases and A/D will work better in others.
</p>
<div id="mntl-sc-block_32-0" class="comp mntl-sc-block mntl-sc-block-adslot mntl-block"></div>
<p id="mntl-sc-block_33-0" class="comp mntl-sc-block finance-sc-block-html mntl-sc-block-html">
If the indicator line trends up, it shows buying interest, since the stock closes above
the halfway point of the range. This helps confirm an uptrend. On the
other hand, if A/D falls, that means the price is finishing in the lower portion of its
daily range, and thus volume is considered negative. This helps confirm a downtrend.
</p>
<div id="mntl-sc-block_34-0" class="comp mntl-sc-block mntl-sc-block-adslot mntl-block"></div>
<p id="mntl-sc-block_35-0" class="comp mntl-sc-block finance-sc-block-html mntl-sc-block-html">
Traders using the A/D line also watch for divergence. If the A/D starts falling
while the price rises, this signals that the trend is in
trouble and could reverse. Similarly, if the price trends lower and A/D starts rising,
that could signal higher prices to come.
</p>
<div id="mntl-sc-block_36-0" class="comp mntl-sc-block mntl-sc-block-adslot mntl-block"></div>
<span class="heading-toc" id="toc-3-average-directional-index"></span>
<h2 id="mntl-sc-block_38-0"
class="comp mntl-sc-block finance-sc-block-heading mntl-sc-block-heading"> <span
class="mntl-sc-block-heading__text"> 3. Average Directional Index </span> </h2>
<p id="mntl-sc-block_39-0" class="comp mntl-sc-block finance-sc-block-html mntl-sc-block-html">
The average directional index is a trend indicator used to measure the strength and momentum of
a trend. When the ADX is above 40, the trend is considered to have a lot of directional
strength, either up or down, depending on the direction the price is moving.<span
class="mntl-inline-citation mntl-dynamic-tooltip--trigger" data-id="#citation-7"
tabindex="0">3</span>
</p>
<div id="mntl-sc-block_40-0" class="comp mntl-sc-block mntl-sc-block-adslot mntl-block"></div>
<p id="mntl-sc-block_41-0" class="comp mntl-sc-block finance-sc-block-html mntl-sc-block-html">
When the ADX indicator is below 20, the trend is considered to be weak or non-trending.
</p>
<div id="mntl-sc-block_42-0" class="comp mntl-sc-block mntl-sc-block-adslot mntl-block"></div>
<p id="mntl-sc-block_43-0" class="comp mntl-sc-block finance-sc-block-html mntl-sc-block-html">
The ADX is the main line on the indicator, usually colored black. There are two additional
lines that can be optionally shown. These are DI+ and DI-. These lines are often colored red
and green, respectively. All three lines work together to show the direction of the
trend as well as the momentum of the trend.
</p>
<div id="mntl-sc-block_44-0" class="comp mntl-sc-block mntl-sc-block-adslot mntl-block"></div>
<ul id="mntl-sc-block_45-0" class="comp mntl-sc-block finance-sc-block-html mntl-sc-block-html">
<li>ADX above 20 and DI+ above DI-. That's an uptrend.</li>
<li>ADX above 20 and DI- above DI+. That's a downtrend.</li>
<li>ADX below 20 is a weak trend or ranging period, often associated with the DI- and
DI+ rapidly crisscrossing each other.</li>
</ul>
<div id="mntl-sc-block_46-0" class="comp mntl-sc-block mntl-sc-block-adslot mntl-block"></div>
<span class="heading-toc" id="toc-4-aroon-indicator"></span>
<h2 id="mntl-sc-block_48-0"
class="comp mntl-sc-block finance-sc-block-heading mntl-sc-block-heading"> <span
class="mntl-sc-block-heading__text"> 4. Aroon Indicator </span> </h2>
<p id="mntl-sc-block_49-0" class="comp mntl-sc-block finance-sc-block-html mntl-sc-block-html">
The Aroon oscillator is a technical indicator used to measure whether a
security is in a trend, and more specifically if the price is hitting new highs or lows over
the calculation period—typically 25.<span
class="mntl-inline-citation mntl-dynamic-tooltip--trigger" data-id="#citation-3"
tabindex="0">4</span>
</p>
<div id="mntl-sc-block_50-0" class="comp mntl-sc-block mntl-sc-block-adslot mntl-block"></div>
<p id="mntl-sc-block_51-0" class="comp mntl-sc-block finance-sc-block-html mntl-sc-block-html">
The indicator can also be used to identify when a new trend is set to begin. The Aroon indicator comprises two lines: an Aroon Up line and an Aroon
Down line.
</p>
<div id="mntl-sc-block_52-0" class="comp mntl-sc-block mntl-sc-block-adslot mntl-block"></div>
<p id="mntl-sc-block_53-0" class="comp mntl-sc-block finance-sc-block-html mntl-sc-block-html">
When the Aroon Up crosses above the Aroon Down, that is the first sign of a possible trend
change. If the Aroon Up hits 100 and stays relatively close to that level while the Aroon
Down stays near zero, that is positive confirmation of an uptrend.
</p>
<div id="mntl-sc-block_54-0" class="comp mntl-sc-block mntl-sc-block-adslot mntl-block"></div>
<p id="mntl-sc-block_55-0" class="comp mntl-sc-block finance-sc-block-html mntl-sc-block-html">
The reverse is also true. If Aroon Down crosses above Aroon Up and stays near 100, this
indicates that the downtrend is in force.
</p>
<div id="mntl-sc-block_56-0" class="comp mntl-sc-block mntl-sc-block-adslot mntl-block"></div>
<div id="mntl-sc-block_58-0" class="comp mntl-sc-block finance-sc-block-callout mntl-block">
<div id="mntl-sc-block_59-0"
class="comp mntl-sc-block mntl-sc-block-callout mntl-block theme-important"
data-tracking-id="mntl-sc-block-callout" data-tracking-container="true">
<h3 id="mntl-sc-block-callout-heading_2-0"
class="comp mntl-sc-block-callout-heading mntl-text-block"></h3>
<div id="mntl-sc-block-callout-body_2-0"
class="comp mntl-sc-block-callout-body mntl-text-block">
<p>Always make sure you practice with a trading demo account before you decide to
use your own capital. This ensures that you understand how technical analysis
(or any other strategy you decide to take) can be applied to real-life trading.
</p>
</div>
</div>
</div>
<span class="heading-toc" id="toc-5-macd"></span>
<h2 id="mntl-sc-block_60-0"
class="comp mntl-sc-block finance-sc-block-heading mntl-sc-block-heading"> <span
class="mntl-sc-block-heading__text"> 5. MACD </span> </h2>
<p id="mntl-sc-block_61-0" class="comp mntl-sc-block finance-sc-block-html mntl-sc-block-html">
The moving average
convergence divergence indicator helps traders see the trend direction, as well as
the momentum of that trend. It also provides a number of trade signals. When the MACD is
above zero, the price is in an upward phase. If the MACD is below zero, it has entered
a bearish period.<span
class="mntl-inline-citation mntl-dynamic-tooltip--trigger" data-id="#citation-4"
tabindex="0">5</span>
</p>
<div id="mntl-sc-block_62-0" class="comp mntl-sc-block mntl-sc-block-adslot mntl-block"></div>
<p id="mntl-sc-block_63-0" class="comp mntl-sc-block finance-sc-block-html mntl-sc-block-html">
The indicator is composed of two lines: the MACD line and a signal line, which
moves slower. When MACD crosses below the signal line, it indicates that the price
is falling. When the MACD line crosses above the signal line, the price is rising.
</p>
<div id="mntl-sc-block_64-0" class="comp mntl-sc-block mntl-sc-block-adslot mntl-block"></div>
<p id="mntl-sc-block_65-0" class="comp mntl-sc-block finance-sc-block-html mntl-sc-block-html">
Looking at which side of zero the indicator is on aids in determining which signals to
follow. For example, if the indicator is above zero, watch for the MACD to cross above the
signal line to buy. If the MACD is below zero, the MACD crossing below the signal line
may provide the signal for a possible short trade.
</p>
<span class="heading-toc" id="toc-6-relative-strength-index"></span>
<h2 id="mntl-sc-block_68-0"
class="comp mntl-sc-block finance-sc-block-heading mntl-sc-block-heading"> <span
class="mntl-sc-block-heading__text"> 6. Relative Strength Index </span> </h2>
<p id="mntl-sc-block_69-0" class="comp mntl-sc-block finance-sc-block-html mntl-sc-block-html">
The relative strength
index has at least three major uses. The indicator moves between zero and 100,
plotting recent price gains versus recent price losses. The RSI levels therefore help in
gauging momentum and trend strength.
</p>
<div id="mntl-sc-block_70-0" class="comp mntl-sc-block mntl-sc-block-adslot mntl-block"></div>
<p id="mntl-sc-block_71-0" class="comp mntl-sc-block finance-sc-block-html mntl-sc-block-html">
The most basic use of an RSI is as an overbought and oversold indicator. When the RSI moves above 70, the asset is
considered overbought and could decline. When the RSI is below 30, the asset is oversold and
could rally. However, making this assumption is dangerous; therefore, some traders wait
for the indicator to rise above 70 and then drop below before selling, or drop below 30
and then rise back above before buying.<span
class="mntl-inline-citation mntl-dynamic-tooltip--trigger" data-id="#citation-5"
tabindex="0">6</span>
</p>
<div id="mntl-sc-block_72-0" class="comp mntl-sc-block mntl-sc-block-adslot mntl-block"></div>
<p id="mntl-sc-block_73-0" class="comp mntl-sc-block finance-sc-block-html mntl-sc-block-html">
Divergence is another use of the RSI. When the indicator is moving in a different direction
than the price, it shows that the current price trend is weakening and could soon reverse.
</p>
<div id="mntl-sc-block_74-0" class="comp mntl-sc-block mntl-sc-block-adslot mntl-block"></div>
<p id="mntl-sc-block_75-0" class="comp mntl-sc-block finance-sc-block-html mntl-sc-block-html">
A third use for the RSI is support and resistance levels. During uptrends, a stock will
often hold above the 30 level and frequently reach 70 or above. When a stock is in
a downtrend, the RSI will typically hold below 70 and frequently reach 30 or below.
</p>
<span class="heading-toc" id="toc-7-stochastic-oscillator"></span>
<h2 id="mntl-sc-block_78-0"
class="comp mntl-sc-block finance-sc-block-heading mntl-sc-block-heading"> <span
class="mntl-sc-block-heading__text"> 7. Stochastic Oscillator </span> </h2>
<p id="mntl-sc-block_79-0" class="comp mntl-sc-block finance-sc-block-html mntl-sc-block-html">
The stochastic oscillator measures the current price relative to
the price range over a number of periods. Plotted between zero and 100, the idea is that the
price should make new highs when the trend is up. In a downtrend, the price tends to make
new lows. The stochastic tracks whether this is happening.<span
class="mntl-inline-citation mntl-dynamic-tooltip--trigger" data-id="#citation-6"
tabindex="0">7</span>
</p>
<div id="mntl-sc-block_80-0" class="comp mntl-sc-block mntl-sc-block-adslot mntl-block"></div>
<p id="mntl-sc-block_81-0" class="comp mntl-sc-block finance-sc-block-html mntl-sc-block-html">
The stochastic moves up and down relatively quickly as it is rare for the price to make
continual highs, keeping the stochastic near 100, or continual lows, keeping the
stochastic near zero. Therefore, the stochastic is often used as an overbought and oversold
indicator. Values above 80 are considered overbought, while levels below 20 are considered
oversold.
</p>
<div id="mntl-sc-block_82-0" class="comp mntl-sc-block mntl-sc-block-adslot mntl-block"></div>
<p id="mntl-sc-block_83-0" class="comp mntl-sc-block finance-sc-block-html mntl-sc-block-html">
Consider the overall price trend when using overbought and oversold levels. For example, during
an uptrend, when the indicator drops below 20 and rises back above it, that is a
possible buy signal. But rallies above 80
are less consequential because we expect to see the indicator move to 80 and above regularly
during an uptrend. During a downtrend, look for the indicator to move above 80 and then drop
back below to signal a possible short trade. The 20 level is less significant in a
downtrend.
</p>
<div id="mntl-sc-block_86-0"
class="comp mntl-sc-block finance-sc-block-questionandanswer mntl-sc-block-questionandanswer">
<span class="heading-toc" id="toc-is-technical-analysis-reliable"></span>
<h2 class="mntl-sc-block-questionandanswer__question">Is Technical Analysis Reliable?</h2>
<div class="mntl-sc-block-questionandanswer__answer">
<p>Technical analysis is the reading of market sentiment via the use of graph patterns
and signals. Various empirical studies have pointed to its effectiveness, but the
range of success is varied and its accuracy remains undecided. It is best to use a
suite of technical tools and indicators in tandem with other techniques like
fundamental analysis to improve reliability.</p>
</div>
</div>
<div id="mntl-sc-block_87-0" class="comp mntl-sc-block mntl-sc-block-adslot mntl-block"></div>
<div id="mntl-sc-block_88-0"
class="comp mntl-sc-block finance-sc-block-questionandanswer mntl-sc-block-questionandanswer">
<span class="heading-toc"
id="toc-which-technical-indicator-can-best-spot-overboughtoversold-conditions"></span>
<h2 class="mntl-sc-block-questionandanswer__question">Which Technical Indicator Can Best
Spot Overbought/Oversold Conditions?</h2>
<div class="mntl-sc-block-questionandanswer__answer">
<p>The relative strength index is among the most popular technical indicators for
identifying overbought or oversold stocks. The RSI is bound between 0 and 100.
Traditionally, a reading above 70 indicates overbought ad below 30 oversold.</p>
</div>
</div>
<div id="mntl-sc-block_89-0" class="comp mntl-sc-block mntl-sc-block-adslot mntl-block"></div>
<div id="mntl-sc-block_90-0"
class="comp mntl-sc-block finance-sc-block-questionandanswer mntl-sc-block-questionandanswer">
<span class="heading-toc" id="toc-how-many-technical-analysis-tools-are-there"></span>
<h2 class="mntl-sc-block-questionandanswer__question">How Many Technical Analysis Tools Are
There?</h2>
<div class="mntl-sc-block-questionandanswer__answer">
<p>There are several dozen technical analysis tools, including a range of indicators and
chart patterns. Market technicians are always creating new tools and refining old
ones.</p>
</div>
</div>
<div id="mntl-sc-block_91-0" class="comp mntl-sc-block mntl-sc-block-adslot mntl-block"></div>
<span class="heading-toc" id="toc-the-bottom-line"></span>
<h2 id="mntl-sc-block_92-0"
class="comp mntl-sc-block finance-sc-block-heading mntl-sc-block-heading"> <span
class="mntl-sc-block-heading__text"> The Bottom Line </span> </h2>
<p id="mntl-sc-block_93-0" class="comp mntl-sc-block finance-sc-block-html mntl-sc-block-html">
The goal of every short-term trader is to determine the direction of a given asset's
momentum and to attempt to profit from it. There have been hundreds of technical indicators
and oscillators developed for this specific purpose, and this article has provided a handful
that you can start trying out. Use the indicators to develop new strategies or consider
incorporating them into your current strategies. To determine which ones to use, try them
out in a demo account. Pick the ones you like the most, and leave the rest.
</p>
</div>
<div id="textnote-placeholder_1-0" class="comp textnote-placeholder mntl-block"></div>
<div id="textnote_1-0" class="comp textnote mm-ads-gpt-adunit gpt textnote ">
<div id="textnote" class="wrapper"></div>
</div>
</div>
</div>
<div class="loc article-post-content">
<div id="article-sources_1-0" class="comp article-sources mntl-article-sources mntl-expandable-block"
data-scroll-offset="100">
<div class="loc toggle-content">
<div id="mntl-article-sources__wrapper_1-0"
class="comp mntl-article-sources__wrapper mntl-block article-sources__wrapper"
data-click-tracked="true">
<div id="mntl-article-sources__heading_1-0"
class="comp mntl-article-sources__heading mntl-text-block article-sources__heading">
Article Sources</div>
<div id="mntl-article-sources__icon-wrapper_1-0"
class="comp mntl-article-sources__icon-wrapper mntl-block article-sources__icon-wrapper">
<div id="article-sources__show-icon_1-0"
class="comp article-sources__show-icon mntl-block"></div>
<div id="article-sources__hide-icon_1-0"
class="comp article-sources__hide-icon mntl-block"></div>
</div>
</div>
</div>
<div class="loc expandable-content">
<div id="article-sources__disclaimer_1-0" class="comp article-sources__disclaimer mntl-block">
Investopedia requires writers to use primary sources to support their work. These include
white papers, government data, original reporting, and interviews with industry experts. We
also reference original research from other reputable publishers where appropriate. You can
learn more about the standards we follow in producing accurate, unbiased content in our
<span class="link__wrapper">editorial policy.</span></a>
</div>
<div id="mntl-article-sources__citation-sources-1_1-0"
class="comp mntl-article-sources__citation-sources-1 mntl-citation-sources mntl-sources"
data-tracking-container="true">
<ol class="mntl-sources__content">
<li class="mntl-sources__source" id="citation-1">
<p>Fidelity. <span>On Balance Volume.</p>
</li>
<li class="mntl-sources__source" id="citation-2">
<p>Fidelity.<span>Accumulation Distribution</span>.</p>
</li>
<li class="mntl-sources__source" id="citation-7">
<p>TD Ameritrade.<span>Determining Trend Strength: Average Directional Index (ADX) Could Provide
Clues</span>.</p>
</li>
<li class="mntl-sources__source" id="citation-3">
<p>AvaTrade. <span>Aroon Indicator Trading Strategies</span>.</p>
</li>
<li class="mntl-sources__source" id="citation-4">
<p>Fidelity. <span>MACD</span>.</p>
</li>
<li class="mntl-sources__source" id="citation-5">
<p>Charles Schwab. <span>How to Use the Relative Strength Index (RSI)</span>.</p>
</li>
<li class="mntl-sources__source" id="citation-6">
<p>Fidelity. <span>Fast Stochastic</span>.</p>
</li>
</ol>
</div>
</div>
</div>
<div id="performance-marketing_1-0" class="comp performance-marketing mntl-block ">
<div id="ad-table_1-0" class="comp ad-table mntl-block">
<div id="brokertable_1-0" class="comp brokertable finance-ad-table mm-ads-ad-table mntl-block"
data-ad-table="brokertable">
<div id="mm-ads-ad-table__heading_1-0"
class="comp mm-ads-ad-table__heading mntl-text-block">Compare Accounts</div>
<div id="mm-ads-ad-table__disclosure_1-0"
class="comp mm-ads-ad-table__disclosure mntl-block mm-ads-ad-table__disclosure--initialized"
data-tracking-container="true"><button id="mm-ads-ad-table__disclosure-label_1-0"
class="comp mm-ads-ad-table__disclosure-label mntl-button"> Advertiser Disclosure
</button>
<div id="mm-ads-ad-table__disclosure-description_1-0"
class="comp mm-ads-ad-table__disclosure-description mntl-block">
<div id="mm-ads-ad-table__disclosure-close_1-0"
class="comp mm-ads-ad-table__disclosure-close mntl-text-block">×</div>
<div id="mm-ads-ad-table__disclosure-content_1-0"
class="comp mm-ads-ad-table__disclosure-content mntl-text-block">The offers that
appear in this table are from partnerships from which Investopedia receives
compensation. This compensation may impact how and where listings appear.
Investopedia does not include all offers available in the marketplace.</div>
</div>
</div>
</div>
</div>
</div>
</div>
</article>
</body>
<style type="text/css">
img {
width: 100%;
height: auto;
}
</style>
</html>