Wednesday, 13 February 2013

Technical Analysis Oscillator Indicators

Oscillator Indicators
Oscillators are indicators that move between two points, between a "buy and a sell" signal. Oscillators indicate when a possible reversal may occur in a trend ( Trend is the total direction of price movement).
there are many oscillators, but I will only mention  5 of them.

1. Stochastic
2. Relative Strength Index (RSI)
3.Parabolic SAR
4. Williams percent Range (William % R)
5. Moving Average Convergence Divergence


Stochastic:
Stochastic show strength or weakness in the Forex market, it's also indicates when the market is overbought or oversold. it has 2 lines, the first line is a slow line which is known as % k. this line compares the latest closing price to the recent market trading range. the second line is a fast line and its known as % D. this line is a signal line calculated by smoothing out the slow % K line.

Relative Strength Index
This oscillator is like the stochastic indicator. it shows overbought and oversold situations in the market. its shows strength and weaknesses  it has 2 lines, a fast line and a slow line and it is scaled from 0 to 100. when both lines are below the 20 scale the market is oversold, when both lines are above the 80 scale the market is overbought.

Parabolic SAR
This indicator was designed by J. Welles Wilder Jr. the name parabolic SAR, says how it works. Parabolic or Parabola is a curve and SAR  is an acronym for Stop And Reverse.
(Parabolic SAR  can be used to trade the stock market). on a chart it is shown as points that indicate reversal in price movement, if the point are above the price it's a bearish signal or a sell signal and if the points are below the price it's a bullish signal or a buy signal.

Parabolic SAR works well when the market is trending.

William  Percent Range ( William % R)
The William % R indicator is similar to Stochastic and Relative Strength Index because it identifies overbought and oversold situations in the market.

Moving Average Convergence Divergence
Moving Average Convergence Divergence is used to determine direction, strength and force of a new trend in the market movement.

Moving Average is made of three numbers or lines. the first, is a slow line, the second is a fast line and the third is a histogram that calculates the moving average of the difference between the fast and slow lines.

thank you for reading



1 comment:

  1. thanks but i'll pass. thank you for the comment though.

    ReplyDelete