You are on page 1of 28

Technical Indicators

This document describes in detail 113 popular technical indicators. These indicators
are being used for the Olaptrader application in concert with additional historical
stock market data.

In our application the following technical indicators have been calculated for over
14,000 Stocks, ETF’s, and Indices from 1988-2008. The data currently resides in a
SQL Server database. A subscription based application will be available soon. Please
check our website for details. http://www.olaptrader.com

1. Accumulation/Distribution Line

The Accumulation/Distribution Line is similar to the On Balance Volume (OBV),


which sums the volume times +1/-1 based on whether the close is higher than the
previous close. The Accumulation/Distribution indicator, however multiplies the
volume by the close location value (CLV). The CLV is based on the movement of the
issue within a single bar and can be +1, -1 or zero.The Accumulation/Distribution
Line is interpreted by looking for a divergence in the direction of the indicator
relative to price. If the Accumulation/Distribution Line is trending upward it
indicates that the price may follow. Also, if the Accumulation/Distribution Line
becomes flat while the price is still rising (or falling) then it signals an impending
flattening of the price.The Accumulation/Distribution Line was developed by Marc
Chaikin.The Accumulation/Distribution Line should not be confused with the Williams
Price Accumulation/Distribution indicator.

2. Accumulation Swing Index

The Accumulation Swing Index is a running total of the Swing Index. The Swing
Index is calculated using only the two most recent bars, by summing it, the
Accumulation Swing Index shows long-term trends. It will be positive in a long-term
uptrend, negative in a long-term down trend and it will hover around zero if the
market is flat. The shape of the Accumulation Swing Index line closely matches the
shape of the price line. It can be interpreted by comparing it to the price and
looking for divergence or confirmation.The Accumulation Swing Index was
developed by J. Welles Wilder and is described in his 1978 book New Concepts In
Technical Trading Systems.
3. Accumulate or Running Total

The Accumulate function calculates the running total of the input data. This is
especially useful if the input data contains both positive and negative values so that
the output will vary around zero.

4. Average Directional Movement Index (ADX)

The ADX is a Welles Wilder style moving average of the Directional Movement Index
(DX). The values range from 0 to 100, but rarely get above 60. To interpret the
ADX, consider a high number to be a strong trend, and a low number, a weak
trend.The ADX was developed by J. Welles Wilder and is described in his 1978 book
New Concepts In Technical Trading Systems.

5. Average Directional Movement Rating (ADXR)

The ADXR is equal to the current ADX plus the ADX from n bars ago divided by 2. In
effect, it is the average of the two ADX values. The ADXR smoothes the ADX, and is
therefore less responsive, however, the ADXR filters out excessive tops and
bottoms. To interpret the ADXR, consider a high number to be a strong trend, and a
low number, a weak trend.

6. Ease of Movement

The EMV emphasizes days in which the stock is moving easily and minimizes the
days in which the stock is finding it difficult to move. This indicator is used
frequently with equivolume charts to identify market formations. A buy signal is
generated when the EMV crosses above zero, a sell signal when it crosses below
zero. When the EMV hovers around zero, then there are small price movements
and/or high volume, which is to say, the price is not moving easily.The volume is
divided by a volume increment (typically 10,000) to make the resultant numbers
larger and easier to work with. The EMV is usually smoothed with a moving
average. The Arms Ease of Movement indicator was developed by Richard W. Arms,
Jr. See also Arms Index (TRIN).

7. Aroon

The word aroon is Sanskrit for "dawn's early light." The Aroon indicator attempts to
show when a new trend is dawning. The indicator consists of two lines (Up and
Down) that measure how long it has been since the highest high/lowest low has
occurred within an n period range. When the Aroon Up is staying between 70 and
100 then it indicates an upward trend. When the Aroon Down is staying between 70
and 100 then it indicates an downward trend. A strong upward trend is indicated
when the Aroon Up is above 70 while the Aroon Down is below 30. Likewise, a
strong downward trend is indicated when the Aroon Down is above 70 while the
Aroon Up is below 30. Also look for crossovers. When the Aroon Down crosses
above the Aroon Up, it indicates a weakening of the upward trend (and vice
versa).The Aroon indicator was developed by Tushar S. Chande and first described
in the September 1995 issue of Technical Analysis of Stocks & Commodities
magazine.

8. Aroon Oscillator

The Aroon Oscillator is calculated by subtracting the Aroon Down from the Aroon Up.
The resultant number will oscillate between 100 and -100. The Aroon Oscillator will
be high when the Aroon Up is high and the Aroon Down is low, indicating a strong
upward trend. The Aroon Oscillator will be low when the Aroon Down is high and the
Aroon Up is low, indicating a strong downward trend. When the Up and Down are
approximately equal, the Aroon Oscillator will hover around zero, indicating a weak
trend or consolidation. See the Aroon indicator for more information.

9. Average True Range (ATR)

The ATR is a Welles Wilder style moving average of the True Range. The ATR is a
measure of volatility. High ATR values indicate high volatility, and low values
indicate low volatility, often seen when the price is flat. The ATR is a component of
the Welles Wilder Directional Movement indicators (+/-DI, DX, ADX and ADXR).

The ATR was developed by J. Welles Wilder and is described in his 1978 book New
Concepts In Technical Trading Systems.

10.Average Price

The Average Price is the average of the open + high + low + close of a bar. It can
be used to smooth an indicator that normally takes just the closing price as
input.See also Median Price, Typical Price and Weighted Close.

11.Bollinger Bands

Bollinger Bands consist of three lines. The middle band is a simple moving average
(generally 20 periods) of the typical price (TP). The upper and lower bands are F
standard deviations (generally 2) above and below the middle band. The bands
widen and narrow when the volatility of the price is higher or lower,
respectively.Bollinger Bands do not, in themselves, generate buy or sell signals;
they are an indicator of overbought or oversold conditions. When the price is near
the upper or lower band it indicates that a reversal may be imminent. The middle
band becomes a support or resistance level. The upper and lower bands can also
be interpreted as price targets. When the price bounces off of the lower band and
crosses the middle band, then the upper band becomes the price target.See also
Bollinger Width, Envelope, Price Channels and Projection Bands.Bollinger Bands
were developed by John Bollinger.

12.Bollinger Band Width

The Bollinger Band Width indicator is the distance between the upper and lower
Bollinger Bands. It is a measure of volatility. The Band Width value is higher when
volatility is high, and lower when volatility is low. High Band Width values indicate
that the current trend may be about to end. Low Band Width values indicate that a
new trend may be about to start.

13.Commodity Channel Index (CCI)

The CCI is designed to detect beginning and ending market trends. The range of
100 to -100 is the normal trading range. CCI values outside of this range indicate
overbought or oversold conditions. You can also look for price divergence in the
CCI. If the price is making new highs, and the CCI is not, then a price correction is
likely.The Commodity Channel Index was developed by Donald Lambert and is
described in his article in the October 1980 issue of Commodities magazine (now
called Futures).

14.Chicago Floor Trading Pivotal Point

This function is used by floor traders on Chicago Mercantile Exchange to calculate


short term support and resistance levels for commodities. It consists of two support
an two resistance levels.

15.Chaikin Money Flow

The Chaikin Money Flow compares the total volume over the last n time periods to
the total of volume times the Closing Location Value (CLV) over the last n time
periods. The CLV calculates where the issue closes within its trading range.When
the Chaikin Money Flow is above 0.25 it is a bullish signal, when it is below -0.25, it
is a bearish signal. If the Chaikin Money Flow remains below zero while the price is
rising, it indicates a probable reversal. The Chaikin Money Flow indicator was
developed by Marc Chaikin.

16.Chaikin Oscillator

The Chaikin Oscillator (AKA Chaikin A/D Oscillator) is essentially a momentum of the
Accumulation/Distribution Line. It is calculated by subtracting a 10 period
exponential moving average of the A/D Line from a 3 period exponential moving
average of the A/D Line. When the Chaikin Oscillator crosses above zero, it
indicates a buy signal, and when it crosses below zero it indicates a sell signal. Also
look for price divergence to indicate bullish or bearish conditions.

17.Chaikin Volatility

The Chaikin Volatility indicator is the rate of change of the trading range. The
indicator defines volatility as a increasing of the difference between the high and
low. A rapid increases in the Chaikin Volatility indicate that a bottom is
approaching. A slow decrease in the Chaikin Volatility indicates that a top is
approaching.

18.Chande Momentum Oscillator (CMO)

The Chande Momentum Oscillator is a modified RSI. Where the RSI divides the
upward movement by the net movement (up / (up + down)), the CMO divides the
total movement by the net movement ((up - down) / (up + down)).There are several
ways to interpret the CMO. Values over 50 indicate overbought conditions, while
values under -50 indicate oversold conditions. High CMO values indicate strong
trends. When the CMO crosses above a moving average of the CMO, it is a buy
signal, crossing down is a sell signal.The Chande Momentum Oscillator was
developed by Tushar S. Chande and is described in the 1994 book The New
Technical Trader by Tushar S. Chande and Stanley Kroll.

19.Moving Correlation Coefficient

The Moving Correlation Coefficient calculates a correlation coefficient of two data


series over the last n periods. This statisticalcalculation is used to determine if two
series of numbers are related. The closer the value is to 1, the closer the data is
related.

20.Moving Covariance

The Moving Covariance calculates the covariance of two data series over the last n
periods.

21.Commodity Selection Index (CSI)

The Commodity Selection Index is a composite indicator calculated by multiplying


the ADXR (Average Directional Movement Rating) and the ATR (Average True Range)
by a constant that incorporates the move value, commission and margin. The CSI
selects commodities that are suitable for short term trading (those with high CSI
values).The Commodity Selection Index was developed by J. Welles Wilder and is
described in his 1978 book New Concepts In Technical Trading Systems.

22.DEMA

The DEMA is a smoothing indicator with less lag than a straight exponential moving
average. DEMA is an acronym for Double Exponential Moving Average, but the
calculation is more complex than just a moving average of a moving average.The
DEMA was developed by Patrick Mulloy and is described in his article in the
February, 1994 issue of Technical Analysis of Stocks & Commodities magazine.See
also Exponential Moving Average, TEMA and T3.

23.Demand Index

The Demand Index is a market strength indicator based on price and volume that
calculates a ratio buying pressure to selling pressure. It can be a leading indicator
of price moves. The Demand Index can be interpreted by looking for divergence
with price to indicate impending price moves. Peaks in the Demand Index signal a
coming peak in price. When the Demand Index hovers around zero, it indicates
weak price moves.The Demand Index was developed by James Sibbet.

24.De-trended Price

The De-trended Price first calculates a regression line for a time series, then
subtracts the slope of the line from the price. By removing the trend from the time
series, the result is a series of detrended prices. It has the effect of flattening out
the trend to make oscillations more visible.

25.Directional Movement Index (+DI and -DI)

The +DI is the percentage of the true range that is up. The -DI is the percentage of
the true range that is down. A buy signal is generated when the +DI crosses up
over the -DI. A sell signal is generated when the -DI crosses up over the +DI. You
should wait to enter a trade until the extreme point is reached. That is, you should
wait to enter a long trade until the price reaches the high of the bar on which the
+DI crossed over the -DI, and wait to enter a short trade until the price reaches the
low of the bar on which the -DI crossed over the +DI.See also DX, ADX and ADXR.

The DI was developed by J. Welles Wilder and is described in his 1978 book New
Concepts In Technical Trading Systems.
26.Moving Dispersion

The Moving Dispersion calculates the absolute change between values over a given
time period.

27.Dynamic Momentum Index (DMI)

The Dynamic Momentum Index is a variable term RSI. The RSI term varies from 3 to
30. The variable time period makes the RSI more responsive to short-term moves.
The more volatile the price is, the shorter the time period is. It is interpreted in the
same way as the RSI, but provides signals earlier.See also RSI.The Dynamic
Momentum Index was developed by Tushar S. Chande and Stanley Kroll and is
described in their 1994 book The New Technical Trader.

28.Down Average

The Down Average is a Welles Wilder style moving average of the decreases
between consecutive prices. Used in the calculation of the RSI.

29.Detrended Price Oscillator (DPO)

The Detrended Price Oscillator removes the trend in prices by subtracting a moving
average of the price from the price. The Detrended Price shows cycles and
overbought/oversold conditions.

30.Directional Movement Index (DX)

The DX is usually smoothed with a moving average (i.e. the ADX). The values range
from 0 to 100, but rarely get above 60. To interpret the DX, consider a high number
to be a strong trend, and a low number, a weak trend.See also +/-DI, ADX and
ADXR.

The DX was developed by J. Welles Wilder and is described in his 1978 book New
Concepts In Technical Trading Systems.

31.Envelope
The Envelope function creates plus and minus bands around series of numbers,
based on a second series. A common use is creating support/resistance bands
around the close.See also Envelope Percent, Bollinger Bands, Price Channels and
Projection Bands.

32.Envelope Percent

The Envelope Percent function creates plus and minus bands around series of
numbers, based on a percentage of the series. A common use is creating
support/resistance bands around the close.See also Envelope, Bollinger Bands, Price
Channels and Projection Bands.

33.Exponential Moving Average

The Exponential Moving Average is a staple of technical analysis and is used in


countless technical indicators. In a Simple Moving Average, each value in the time
period carries equal weight, and values outside of the time period are not included
in the average. However, the Exponential Moving Average is a cumulative
calculation, including all data. Past values have a diminishing contribution to the
average, while more recent values have a greater contribution. This method allows
the moving average to be more responsive to changes in the data.See also Least
Squares MA, Simple MA, Triangular MA, Weighted MA, Welles MA, Variable MA,
Volume Adjusted MA, Zero Lag Exponential MA, DEMA, TEMA and T3

34.Forecast Oscillator

The Forecast Oscillator calculates the percentage difference between the actual
price and the Time Series Forecast (the endpoint of a linear regression line). When
the price and the forecast are equal, the Oscillator is zero. When the price is
greater than the forecast, the Oscillator is greater than zero. When the price is less
than the forecast, the Oscillator is less than zero.If the Forecast Oscillator stays
below zero, it indicates that prices are about to fall, and if the Oscillator stays above
zero, it indicates that prices are about to rise. The signal is an exponential moving
average of the Forecast Oscillator. When the Oscillator crosses above/below the
signal line, then prices are expected to rise/fall.The Forecast Oscillator was
developed by Tushar S. Chande.

35.Ichimoku Kinko Hyo

Ichimoku Kinko Hyo is Japanese for "one glance cloud chart." It consists of five lines
called Tenkan-sen, Kijun-sen (sen is Japanese for line), Senkou Span A, Senkou Span
B and Chinkou Span. The calculation uses four different time periods which we call
termT, termK, termS and termC. The Ichimoku Kinko Hyo is graphed over the
closing price line. The space between the Senkou spans is called the Cloud, and is
usually graphed in a hatched pattern.The Senkou Spans are support and resistance
lines. When the price is in the Cloud, the market is non-trending. When the price is
above the Cloud, the higher Span is the first support level and the lower Span is the
second support level. When the price is below the Cloud, the lower Span is the first
resistance level and the higher Span is the second resistance level. Kijun-sen and
Tenkan-sen are trend indicators. When the price is above the Kijun-sen, prices will
likely continue to go up, when the price is below the Kijun-sen, prices will likely
continue to go down. The direction of the Tenkan-sen indicates the direction of the
trend. If the Tenkan-sen is flat, the market is in a non-trending channel.A buy signal
is generated when the Chinkou Span crosses over the price, or when the Tenkan-sen
crosses over the Kijun-sen. A sell signal is generated when the Chinkou Span
crosses under the price, or when the Tenkan-sen crosses under the Kijun-sen. Look
for confirmation when both crosses occur.The Ichimoku Kinko Hyo was developed by
Goichi Hosoda before WWII, and published in 1969

36.Intraday Momentum Index (IMI)

The Intraday Momentum Index is similar to the RSI, but uses the movement
between the open and close whereas the RSI uses the movement between the close
and the previous close. IMI values over 70 indicate an overbought condition, and
values under 30 indicate oversold.The Intraday Momentum Index was developed by
Tushar S. Chande and Stanley Kroll and is described in their 1994 book The New
Technical Trader.

37.Inertia

The Inertia indicator is the Relative Volatility Index (RVI) smoothed with a Least
Squares Moving Average. Like the RVI, the Inertia ranges from 0 to 100. Inertia
signals long-term trends. Positive Inertia is indicated by values above 50, while
values below 50 indicate negative inertia (slowing).The Inertia indicator was
developed by Donald Dorsey and was introduced his article in September, 1995
issue of Technical Analysis of Stocks & Commodities magazine.

38.Klinger Oscillator (KO)

The Klinger Oscillator uses a combination of high-low trading range, volume and
accumulation/distribution to find trading tops and bottoms. The KO is used with a
signal line which is a 13 period Exponential Moving Average of the KO.To interpret
the KO, look for divergence with the price to signal the coming end of a trend, or to
indicate that rising/falling prices are not forming a new trend. A buy signal is
generated when the KO rises from below zero to cross above the trigger line. A sell
signal is generated when the KO falls from its high and crosses below the trigger
line. The Klinger Oscillator is also known as the Klinger Volume Oscillator or KVO.The
Klinger Oscillator was developed by Stephen J. Klinger and was first presented in his
article in the Winter 1994/Spring 1995 issue of MTA Journal.

39.Line Oscillator

The Line Oscillator is the difference between the Simple Moving Averages of two
input data series. It is a generic function that can be used in conjunction with other
indicators.

40.Least Squares Moving Average

The Least Squares Moving Average first calculates a least squares regression line
over the preceding time periods, then projects it forward to the current period. In
essence, it calculates what the value would be if the regression line continued.The
Least Squares Moving Average is also known as an Endpoint Moving Average, a
Time Series Moving Average or a Time Series Forecast.See also Exponential MA,
Simple MA, Triangular MA, Weighted MA, Welles MA, Variable MA, Volume Adjusted
MA, Zero Lag Exponential MA, DEMA, TEMA and T3.

41.Moving Average Convergence/Divergence (MACD)

The Moving Average Convergence Divergence (MACD) is the difference between two
Exponential Moving Averages. The Signal line is an Exponential Moving Average of
the MACD.The MACD signals trend changes and indicates the start of new trend
direction. High values indicate overbought conditions, low values indicate oversold
conditions. Divergence with the price indicates an end to the current trend,
especially if the MACD is at extreme high or low values. When the MACD line
crosses above the signal line a buy signal is generated. When the MACD crosses
below the signal line a sell signal is generated. To confirm the signal, the MACD
should be above zero for a buy, and below zero for a sell.The time periods for the
MACD are often given as 26 and 12. However the function actually uses
exponential constants of 0.075 and 0.15, which are closer to 25.6667 and 12.3333
periods. To create a similar indicator with time periods other than those built into
the MACD, use the Price Oscillator function.The MACD was developed by Gerald
Appel.

42.Moving Average Envelope

The MA Envelope function creates high and low bands around a moving average.
43.Moving Averages of the High and Low

The MA High Low function creates moving averages of the high and the low.

44.Mass Index

The Mass Index is a moving sum of a 9 period Exponential Moving Average of the
trading range (high minus low) divided by the double smoothed moving average of
the range. The Mass Index is intended to identify trend reversals. Higher Mass
Index values are created by widening trading ranges, which indicate a trend
reversal.The MASS Index was developed by Donald Dorsey and was presented in his
article in the June, 1992 issue of Technical Analysis of Stocks & Commodities
magazine.

45.Median Price

The Median Price is the average of the high + low of a bar. It can be used to smooth
an indicator that normally takes just the closing price as input.See also Average
Price, Typical Price and Weighted Close.

46.MESA Sinewave

The Mesa Sine Wave calculates two sine curves. When the two curves resemble a
sine wave, the market is in a cycle, otherwise the market is trending. Signals are
generated only when the market is in a cycle. A buy signal is generated when the
Sine crosses up over the Lead Sine, and a sell signal when the Sine crosses down
below the Lead Sine.The Mesa Sine Wave was developed by John Elhers and was
introduced in his article in the November, 1996 issue of Technical Analysis of Stocks
& Commodities magazine.

47.Market Facilitation Index (MFI)

Market Facilitation Index (MFI) is the trading range divided by the volume. The MFI
measures the price movement per unit of volume.To interpret the MFI, compare it to
the volume. When the MFI is high and volume is low, it signals a fake trend which
will soon reverse. When the MFI is low and volume is high, it signals a new trend in
either direction is about to occur. When the MFI is low and volume is also low, it
signals a fading market and an impending trend reversal. When the MFI is high and
volume is also high, it signals a strong trend.The Market Facilitation Index was
developed by Dr. Bill Williams and is described in his 1995 book, Trading Chaos.
48.Momentum

The Momentum is a measurement of the acceleration and deceleration of prices. It


indicates if prices are increasing at an increasing rate or decreasing at a decreasing
rate. The Momentum function can be applied to the price, or to any other data
series.

49.Money Flow Index

The Money Flow Index calculates the ratio of money flowing into and out of a
security. To interpret the Money Flow Index, look for divergence with price to signal
reversals. Money Flow Index values range from 0 to 100. Values above 80/below 20
indicate market tops/bottoms.

50.Moving Average

The Moving Average function calculates a moving average using one of eight
methods: Exponential, Least Squares, Simple, Triangular, Variable, Weighted, Welles
Wilder style, or Zero Lag Exponential. The purpose of the function is to make it easy
to change the calculation method by just changing one parameter.

51.Moving Summation

The moving summation is the sum of the last n values. It is a Simple Moving
Average without dividing the sum by n. The moving sum is used in the calculation
of many indicators. It can also be used to modify any existing indicator.

52.Net Momentum Oscillator (NMO)

The Net Momentum Oscillator (NMO) is a variation on the RSI. Whereas the RSI
based on the ratio of up periods to down periods, the NMO is the ratio of the
momentum (up – down) to the absolute momentum (up + down) . The NMO is able
to show overbought and oversold levels (greater than +50, less than -50) better
than the RSI. The Net Momentum Oscillator was developed by Tushar Chande and
Stanley Kroll and was introduced in their article in the May, 1993 issue of Technical
Analysis of Stocks & Commodities magazine.

53.Negative Volume Index (NVI)

Negative Volume Index (NVI) attempts to identify bull markets by showing what the
smart investors are doing. It is based on the assumption smart investors dominate
trading on light volume days and uninformed investors dominates trading on active
days. The NVI changes on days when the volume is down and stays flat on up
volume days. Look for the NVI to rise above its one year moving average to signal a
bull market.Also see the Positive Volume Index.

54.On Balance Open Interest (OBOI)

The On Balance Open Interest (OBOI) is a total of the up and down open interest.
The calculation is based on the On Balance Volume (OBV). When the close is higher
than the previous close, the open interest is added to the running total, and when
the close is lower than the previous close, the open interest is subtracted from the
running total. This version of the OBOI is a moving total, not a cumulative total.
That is, only the values from the past n days are totaled.

55.On Balance Volume (OBV)

The On Balance Volume (OBV) is a cumulative total of the up and down volume.
When the close is higher than the previous close, the volume is added to the
running total, and when the close is lower than the previous close, the volume is
subtracted from the running total.To interpret the OBV, look for the OBV to move
with the price or precede price moves. If the price moves before the OBV, then it is
a non-confirmed move. A series of rising peaks, or falling troughs, in the OBV
indicates a strong trend. If the OBV is flat, then the market is not trending.The On
Balance Volume was developed by Joseph Granville and is described in his 1963
book, New Strategy of Daily Stock Market Timing for Maximum Profit.

56.On Balance Volume, Expanded System

The On Balance Volume, Expanded System calculates OBV and identifies the
breakouts and field trends as described in Joseph Granville's 1963 book New
Strategy of Daily Stock Market Timing for Maximum Profit. The breakout Array is
filled with the following codes: 1 = up, -1 = down, 0 = no breakout on this bar. The
fieldtrend Array is filled with the following codes: 1 = rising, -1 = falling, 0 =
doubtful.Also see On Balance Volume and On Balance Volume, Moving.

57.On Balance Volume, Moving

This version of the On Balance Volume (OBV) is a moving total, not a cumulative
total. That is, only the values from the past n days are totaled, as opposed to
totaling all days from the beginning of the data series. See On Balance Volume for
more information. Also see On Balance Volume, Expanded System.

58.Oscillator
The Oscillator function calculates the difference between two data series. It is a
generic function that can take any price or indicator data as input. It is used in the
calculation of many indicators.

59.Oscillator (Percent)

The OscillatorPct function calculates the difference between two data series as a
percentage. It is a generic function that can take any price or indicator data as
input. It is used in the calculation of many indicators.

60.Performance Indicator

The Performance indicator displays the percentage difference between the price
today and the price at the start of the data series. It is also known as a normalized
price. It can be useful for comparing the performance of two securities or a security
and an index.

61.Price Channels

The Price Channels indicator creates a high band of the highest high over the last n
periods and a low band of the lowest low over the last n periods. The bands are
support and resistance levels.See also Bollinger Bands, Envelope and Projection
Bands.

62.Price Oscillator

The Price Oscillator shows the difference between two moving averages. It is
basically a MACD, but the Price Oscillator can use any time periods. A buy signal is
generate when the Price Oscillator rises above zero, and a sell signal when the it
falls below zero.See also Price Oscillator Percent, MACD.

63.Price Oscillator, Percent

The Price Oscillator Percent shows the percentage difference between two moving
averages. A buy signal is generate when the Price Oscillator Percent rises above
zero, and a sell signal when the it falls below zero.

64.Projection Bands

Projection Bands are calculated by finding the highest high and lowest low over the
last n periods and plotting them parallel to a regression line of the high/low. The
Projection Bands are support and resistance levels. When the price reaches the
upper band, it signals a price top and probable reversal. Likewise, when the price
reaches the bottom band, it signals a bottom. The price will never actually break
above or below the bands (unlike Bollinger Bands). See also Projection Bandwidth
and Projection Oscillator. For other types of bands, see Bollinger Bands, Envelope
and Price Channels.Projection Bands were developed by Mel Widner, Ph.D and were
originally introduced in his article in the July, 1995 issue of Technical Analysis of
Stocks & Commodities magazine.

65.Projection Bandwidth

Projection Bandwidth is based on the Projection Bands indicator. It is the ratio of the
width of the bands to the midpoint. A low number indicates that the bands are
narrowing, a high number means that the bands are widening. The band width is a
measure of volatility. Narrow bands mean a narrow trading range and low volatility;
wide bands, wide range, high volatility.See also Projection Bands and Projection
Oscillator.

66.Projection Oscillator

The Projection Oscillator is based on the Projection Bands indicator. The Oscillator
calculates where the close lies within the band as a percentage. Therefore, an
Oscillator value of 50 would mean that the close is in the middle of the band. A
value of 100 would mean that the close is equal to the top band, and zero means
that it is equal to the low band. The calculation is similar to a Stochastic which uses
the raw highest high and lowest low value, whereas the Projection Oscillator adds
the regression line component, making it more sensitive.The Projection Oscillator
can be interpreted several ways. Look for divergence with price to indicate a trend
reversal. Extreme values (over 80 or under 20) indicate overbought/oversold levels.
A moving average of the oscillator can be used as a trigger line. A buy/sell signal is
generated when the Projection Oscillator to cross above/below the trigger line. The
signal is stronger if it happens above 70 or below 30.See also Projection Bands and
Projection Bandwidth.Projection Bands were developed by Mel Widner, Ph.D and
were originally introduced in his article in the July, 1995 issue of Technical Analysis
of Stocks & Commodities magazine.

67.Positive Volume Index (PVI)

The Positive Volume Index (PVI) attempts to identify bull markets. The PVI shows
what the uninformed investors are doing, while the Negative Volume Index shows
what the smart investors are doing. It is based on the assumption smart investors
dominate trading on light volume days and uninformed investors dominates trading
on active days. The PVI changes on days when the volume is up and stays flat on
down volume days. Also see the Negative Volume Index.The Positive and Negative
Volume Index were developed by Norman Fosback and are described in his 1976
book, Stock Market Logic.

68.Percentage Volume Oscillator (PVO)

The Percentage Volume Oscillator (PVO) is the percentage difference between two
moving averages of volume. The PVO has a maximum of 100, but no minimum
value.PVO crosses over zero when the fast Exponential Moving Average (EMA) is
greater than the slow EMA indicating that volume is above average. The PVO
crosses below zero when the fast EMA is less than the slow EMA indicating that
volume is below average. The direction of the PVO curve indicates rising or falling
volume levels. Look for strong volume (rising PVO) to confirm price trends. A
moving average of the PVO can be used as a signal line to indicate longer term
movements and to look for crossovers.

69.Price Volume Rank

The Price Volume Rank was developed as a simple indicator that could be calculated
even without a computer. The basic interpretation is to buy when the PV Rank is
below 2.5 and sell when it is above 2.5.The Price Volume Rank was developed by
Anthony J. Macek and is described in his article in the June, 1994 issue of Technical
Analysis of Stocks & Commodities magazine.

70.Price and Volume Trend (PVT)

The Price Volume Trend (PVT) is similar to the On Balance Volume (OBV). The OBV is
a cumulative total of volume times +1/-1 based on whether the close is greater or
less than the previous close. However, the PVT is a cumulative total of volume
times the percentage change of the close from the previous close. So, it adds more
of the volume to the total when the price makes greater moves. The PVT is
interpreted in the same ways as the OBV. See also On Balance Volume.

71.Qstick

The Qstick indicator is an exponential moving average of the difference between the
open and close. The "stick" in the name comes from candlestick charting. The
body of a candlestick is from the open to the close. A white candlestick is an up and
a black candlestick is a down day. Positive Qstick values indicate a majority of up
days; negative values, a majority of down days.To interpret the Qstick, look for a
buy signal when it crosses above zero, and a sell signal when it crosses below zero.
Also look for a buy signal when the Qstick is very low and turns up, and a sell signal
when it is very high and turns down. A moving average of the Qstick can be used
as a trigger line (look for the Qstick to cross the trigger). You can also look for
divergence between the Qstick and price to indicate the end of a trend or as a non-
confirmation of a price move.The Qstick indicator was developed by Tushar S.
Chande and Stanley Kroll and is described in their 1994 book The New Technical
Trader.

72.Range Indicator

The Range indicator compares the intraday range (high - low) to the inter-day (close
- previous close) range. When the intraday range is greater than the inter-day
range, the Range Indicator will be a high value. This signals an end to the current
trend. When the Range Indicator is at a low level, a new trend is about to start.The
Range Indicator was developed by Jack Weinberg and was introduced in his article in
the June, 1995 issue of Technical Analysis of Stocks & Commodities magazine.

73.Rate of Change

The Rate of Change function measures rate of change relative to previous periods.
The function is used to determine how rapidly the data is changing. The factor is
usually 100, and is used merely to make the numbers easier to interpret or graph.
The function can be used to measure the Rate of Change of any data series, such as
price or another indicator. When used with the price, it is referred to as the Price
Rate Of Change, or PROC.

74.Ratio

The Ratio function measures relationships between two data series. It is used in the
calculation of many indicators and can be used with the output of other indicators.

75.Moving Regression Line

The Moving Regression Line function fills two output arrays with the slope and
constant of a least squares regression line of the input data series over the given
time period. This function is used in the calculation of several indicators. It can be
used to calculate the slope of the price or any indicator.
76.Relative Momentum Index (RMI)

The Relative Momentum Index (RMI) is a variation on the Relative Strength Index
(RSI). To determine up and down days, the RSI uses the close compared to the
previous close. The RMI uses the close compared to the close n days ago. An RMI
with a time period of 1 is equal to the RSI. The RMI ranges from 0 to 100. Like the
RSI, The RMI is interpreted as an overbought/oversold indicator when the value is
over 70/below 30. You can also look for divergence with price. If the price is
making new highs/lows, and the RMI is not, it indicates a reversal.See also Relative
Strength Index.The Relative Momentum Index was developed by Roger Altman and
was introduced in his article in the February, 1993 issue of Technical Analysis of
Stocks & Commodities magazine.

77.Relative Strength Index (RSI)

The Relative Strength Index (RSI) calculates a ratio of the recent upward price
movements to the absolute price movement. The RSI ranges from 0 to 100. The
RSI is interpreted as an overbought/oversold indicator when the value is over
70/below 30. You can also look for divergence with price. If the price is making new
highs/lows, and the RSI is not, it indicates a reversal.The Relative Strength Index
(RSI) was developed by J. Welles Wilder and was first introduced in his article in the
June, 1978 issue of Commodities magazine, now known as Futures magazine, and is
detailed in his book New Concepts In Technical Trading Systems.

78.r-squared

The r-squared indicator calculates how well the price approximates a linear
regression line. The indicator gets its name from the calculation, which is, the
square of the correlation coefficient (referred to in mathematics by the Greek letter
rho, or r). The range of the r-squared is from zero to one.High r-squared values
indicate a strong correlation, and an indication of a trend. An r-squared value above
the critical value listed below indicates a positive correlation between the price and
the linear regression line with 95% confidence.n r-squared5 .7710 .4014 .2720
.2025 .1630 .1350 .0860 .06120 .03

79.Relative Volatility Index (RVI)

The Relative Volatility Index (RVI) is based on the Relative Strength Index (RSI).
Whereas the RSI uses the average price change, the RVI uses a 9 period standard
deviation of the price. The RVI indicator is a revision of the original RVI. The
original version of the RVI is calculated using the closing price. The revised version
is calculated by taking the average of the original RVI of the high and the original
RVI of the low. See Relative Volatility Index - Original Calculation for the original
version.The RVI is a volatility indicator. It was developed as a compliment to and a
confirmation of momentum based indicators. When used to confirm other signals,
only buy when the RVI is over 50 and only sell when the RVI is under 50. If a signal
is ignored, buy when the RVI is over 60 and sell when the RVI is under 40. Exit a
long position if the RVI drops below 40 and exit a short position when the RVI rises
above 60.

Also see the RVI Original.The Relative Volatility Index was developed by Donald
Dorsey and was originally introduced in his article in the June, 1993 issue of
Technical Analysis of Stocks & Commodities magazine, and later revised in his
article in the September, 1995 issue of the same magazine.

80.Relative Volatility Index (RVI) - Original Calculation

The Relative Volatility Index (RVI) is based on the Relative Strength Index (RSI).
Whereas the RSI uses the average price change, the RVI uses a 9 period standard
deviation of the price.The original version of the RVI is calculated using the closing
price. The revised version is calculated by taking the average of the original RVI of
the high and the original RVI of the low. See Relative Volatility Index for the revised
version .The RVI is a volatility indicator. It was developed as a compliment to and a
confirmation of momentum based indicators. When used to confirm other signals,
only buy when the RVI is over 50 and only sell when the RVI is under 50. If a signal
is ignored, buy when the RVI is over 60 and sell when the RVI is under 40. Exit a
long position if the RVI drops below 40 and exit a short position when the RVI rises
above 60.

Also see the RVI (modified).

81.Random Walk Index (RWI)

The Random Walk Index (RWI) is used to determine if an issue is trending or in a


random trading range by comparing it to a straight line. The more random the price
movement, the more the RWI fluctuates.The short-term (2 to 7 periods) RWI is an
overbought/oversold indicator, while the long-term (8 to 64 periods) RWI is a trend
indicator. An issue is trending higher if the RWI of the highs is greater than 1, while
a downtrend is indicated if the RWI of the lows is greater than 1. A buy signal is
generated when the long-term RWI of the highs is greater than 1 and the short-term
RWI of the lows rises above 1. A sell signal is generated when the long-term RWI of
the lows is greater than 1 and the short-term RWI of the highs rises above 1.The
Random Walk Index was developed by Michael Poulos and is described in his article
in the February, 1991 issue of Technical Analysis of Stocks & Commodities
magazine.
82.Parabolic SAR

The Parabolic SAR calculates a trailing stop. Simply exit when the price crosses the
SAR. The SAR assumes that you are always in the market, and calculates the Stop
And Reverse point when you would close a long position and open a short position
or vice versa.The Parabolic SAR was developed by J. Welles Wilder and is described
in his 1978 book, New Concepts In Technical Trading Systems.

83.Simple Moving Average

Moving Averages are used to smooth the data in an array to help eliminate noise
and identify trends. The Simple Moving Average is literally the simplest form of a
moving average. Each output value is the average of the previous n values. In a
Simple Moving Average, each value in the time period carries equal weight, and
values outside of the time period are not included in the average. This makes it less
responsive to recent changes in the data, which can be useful for filtering out those
changes. See also Exponential MA, Least Squares MA, Triangular MA, Weighted MA,
Welles MA, Variable MA, Volume Adjusted MA, Zero Lag Exponential MA, DEMA,
TEMA and T3.

84.Stochastic Momentum Index (SMI)

The Stochastic Momentum Index (SMI) is based on the Stochastic Oscillator. The
difference is that the Stochastic Oscillator calculates where the close is relative to
the high/low range, while the SMI calculates where the close is relative to the
midpoint of the high/low range. The values of the SMI range from +100 to -100.
When the close is greater than the midpoint, the SMI is above zero, when the close
is less than the midpoint, the SMI is below zero. The SMI is interpreted the same
way as the Stochastic Oscillator. Extreme high/low SMI values indicate
overbought/oversold conditions. A buy signal is generated when the SMI rises
above -50, or when it crosses above the signal line. A sell signal is generated when
the SMI falls below +50, or when it crosses below the signal line. Also look for
divergence with the price to signal the end of a trend or indicate a false trend.The
Stochastic Momentum Index was developed by William Blau and was introduced in
his article in the January, 1993 issue of Technical Analysis of Stocks & Commodities
magazine.

85.Moving Standard Deviation

The Moving Standard Deviation function fills the output Array with the standard
deviation of the last n values of the input Array. This function is used in the
calculation of several indicators. It can take price or the output of any indicator as
its input. Standard Deviation is often used as a measure of volatility.

86.Standard Error Bands

Standard Error Bands are a type of envelope. They look similar to Bollinger Bands,
however the calculation and interpretation is different. The middle band is a Least
Squares Moving Average. The high band is the middle band plus a factor times the
n period standard error. The low band is the middle band minus a factor times the n
period standard error.When the bands are close together, it means that there is a
low standard error, which means that the price is in a trend. When the bands are
farther apart, then the price is not trending. When the price is in a trend and the
bands are close together, look for the bands to widen to signal the end of the
trend.Standard Error Bands were developed by Jon Anderson.

87.General Stochastic Calculation

This is a general form of the Lane Stochastic Oscillator calculation that works on any
Array, instead of Bars. This is very useful for building composite indicators. The
general Stochastic theory still applies, that is, that as prices decrease, they tend to
accumulate near the extreme lows, and when rising, they tend to accumulate near
the extreme highs.

88.Stochastic Oscillator

The Stochastic Oscillator measures where the close is in relation to the recent
trading range. The values range from zero to 100. %D values over 75 indicate an
overbought condition; values under 25 indicate an oversold condition. When the
Fast %D crosses above the Slow %D, it is a buy signal; when it crosses below, it is a
sell signal. The Raw %K is generally considered too erratic to use for crossover
signals.Also see the General Stochastic Calculation.

The Stochastic Indicator was developed by George C. Lane.

Terminology:

Fast Stochastic Refers to both %K and %D where %K is un-smoothed

Slow Stochastic Refers to both %K and %D where %K is smoothed

Raw %K Un-smoothed %K

Fast %K Un-smoothed %K

Slow %K Smoothed %K
Fast %D Moving average of an un-smoothed %K

Slow %D Moving average of a smoothed %K, in effect: a double smoothed


%K.%D Always refers to a smoothed %K (whether or not the %K
itself is smoothed) .

89.Stochastic RSI

Stochastic RSI (StochRSI) is an indicator of an indicator. It calculates the Relative


Strength Indicator (RSI) relative to its range in order to increase the sensitivity of
the standard RSI. The values of the StochRSI are from zero to one. The Stochastic
RSI can be interpreted several ways. Overbought/oversold conditions are indicated
when the StochRSI crosses above .20 / below .80. A buy signal is generated when
the StochRSI moves from oversold to above the midpoint (.50). A sell signal is
generated when the StochRSI moves from overbought to below the midpoint. Also
look for divergence with the price to indicate the end of a trend.See also Stochastic,
Stochastic Oscillator and RSI.The Stochastic RSI was developed by Tushar S. Chande
and Stanley Kroll and is described in their 1994 book, The New Technical Trader.

90.Swing Index

The Swing Index attempts to determine the real price. The numbers range from
-100 to +100. It is difficult to interpret in its raw form, and is usually summed to
form the Accumulation Swing Index.It is important to use the correct limit move for
the commodity you are analyzing (e.g. $3.00 for T-Bonds, $0.04 for Heating Oil, etc).
For a stock, limit move should be a large number, such as $10,000.The Swing Index
was developed by J. Welles Wilder and is described in his 1978 book New Concepts
In Technical Trading Systems.

91.T3

The T3 is a type of moving average, or smoothing function. It is based on the


DEMA. The T3 takes the DEMA calculation and adds a vfactorwhich is between zero
and 1. The resultant function is called the GD, or Generalized DEMA. A GD with
vfactor of1 is the same as the DEMA. A GD with a vfactorof zero is the same as an
Exponential Moving Average. The T3 typically uses a vfactor of 0.7.The T3 triple-
smoothes the data series by calling the GD three times. You can pass any value for
tcountto the T3 function. For instance, a tcount of 4 would be quadruple-smoothed,
in effect a T4. A tcount of 1 would be a single-smoothed GD.Any data series can be
smoothed with the T3, including price or the output of another indicator. See also
Exponential Moving Average, DEMA and TEMA,
The T3 was developed by Tim Tillson and was described in his January, 1998 article
in Technical Analysis of Stocks & Commodities magazine.

92.TEMA

The TEMA is a smoothing indicator with less lag than a straight exponential moving
average. TEMA is an acronym for Triple Exponential Moving Average, but the
calculation is more complex than that.The TEMA was developed by Patrick Mulloy
and is described in his article in the January, 1994 issue of Technical Analysis of
Stocks & Commodities magazine.See also Exponential Moving Average, DEMA and
T3.

93.True Range (TR)

The True Range function is used in the calculation of many indicators, most notably,
the Welles Wilder DX. It is a base calculation that is used to determine the normal
trading range of a stock or commodity.

94.Trend Score

The Trend Score is a simple indicator that attempts to show when price is trending
by looking at up and down days. The trend is equal to one when the price is greater
than or equal to the previous price, and as a negative one when the price is less
than the previous price. The Trend Score is the moving summation of those ones
and negative ones over the past n periods.

95.Triangular Moving Average

The Triangular Moving Average is a form of Weighted Moving Average wherein the
weights are assigned in a triangular pattern. For example, the weights for a 7
period Triangular Moving Average would be 1, 2, 3, 4, 3, 2, 1. This gives more
weight to the middle of the time series and less weight to the oldest and newest
data. The Triangular Moving Average is mathematically equivalent to a Simple
Moving Average of a Simple Moving Average.See also Exponential MA, Least
Squares MA, Simple MA, Weighted MA, Welles MA, Variable MA, Volume Adjusted
MA, Zero Lag Exponential MA, DEMA, TEMA and T3.

96.TRIX
The TRIX indicator calculates the rate of change of a triple exponential moving
average. The values oscillate around zero. Buy/sell signals are generated when the
TRIX crosses above/below zero. A (typically) 9 period exponential moving average
of the TRIX can be used as a signal line. A buy/sell signals are generated when the
TRIX crosses above/below the signal line and is also above/below zero.The TRIX was
developed by Jack K. Hutson, publisher of Technical Analysis of Stocks &
Commodities magazine, and was introduced in Volume 1, Number 5 of that
magazine.

97.True Strength Index (TSI)

The True Strength Index (TSI) is a variation of the Relative Strength Index (RSI). The
TSI uses a double smoothed exponential moving average of price momentum to
eliminate choppy price changes and spot trend changes. This indicator has a little
or no time lag.The True Strength Index was developed by William Blau and is
described in his 1995 book Momentum, Direction, and Divergence.

98.Typical Price

The Typical Price is the average of the high + low + close of a bar. It is used in the
calculation of several indicators. It can be used to smooth an indicator that
normally takes just the closing price as input.See also Average Price, Median Price
and Weighted Close.

99.Ultimate Oscillator

The Ultimate Oscillator is the weighted sum of three oscillators of different time
periods. The typical time periods are 7, 14 and 28. The values of the Ultimate
Oscillator range from zero to 100. Values over 70 indicate overbought conditions,
and values under 30 indicate oversold conditions. Also look for
agreement/divergence with the price to confirm a trend or signal the end of a
trend.The Ultimate Oscillator was developed by Larry Williams and was introduced
in his article in the April, 1985 issue of Technical Analysis of Stocks & Commodities
magazine.

100.Up Average

The Up Average is a Welles Wilder style moving average of the increases between
consecutive prices. Used in the calculation of the RSI.

101.Variable Moving Average


A Variable Moving Average is an exponential moving average that automatically
adjusts the smoothing weight based on the volatility of the data series. The more
volatile the data is, the more weight is given to the more recent values. The
Variable Moving Average solves a problem with most moving averages. In times of
low volatility, such as when the price is trending, the moving average time period
should be shorter to be sensitive to the inevitable break in the trend. Whereas, in
more volatile non-trending times, the moving average time period should be longer
to filter out the choppiness.Almost any measure of volatility can be used in
calculating the Variable Moving Average, however, most implementations use a 9
period Chande Momentum Oscillator (CMO).The Variable Moving Average is also
known as the VIDYA Indicator.The Variable Moving Average was developed by Tushar
S. Chande and first presented in his March, 1992 article in Technical Analysis of
Stocks & Commodities magazine, in which a standard deviation was used as the
Volatility Index. In his October, 1995 article in the same magazine, Chande
modified the VIDYA to use his own Chande Momentum Oscillator (CMO) as the
Volatility Index.See also Exponential MA, Least Squares MA, Simple MA, Triangular
MA, Weighted MA, Welles MA, Volume Adjusted MA, Zero Lag Exponential MA, DEMA,
TEMA and T3.

102.Vertical Horizontal Filter (VHF)

The Vertical Horizontal Filter (VHF) determines whether prices are trending. When
the VHF is rising, it indicates the formation of a trend. Higher VHF values indicate a
stronger trend. When the VHF is falling, it indicates the trend is ending and price is
becoming congested. Very low VHF values indicate a trend may follow.The Vertical
Horizontal Filter was developed by Adam White.

103.VIDYA

VIDYA is an acronym of Variable Index DynamicAverage. The VIDYA is an


exponential moving average that automatically adjusts the smoothing weight based
on the volatility of the data series. The more volatile the data is, the more weight is
given to the more recent values. The VIDYA solves a problem with most moving
averages. In times of low volatility, such as when the price is trending, the moving
average time period should be shorter to be sensitive to the inevitable break in the
trend. Whereas, in more volatile non-trending times, the moving average time
period should be longer to filter out the choppiness.The VIDYA is also known as the
Variable Moving Average.The VIDYA was developed by Tushar S. Chande and first
presented in his March, 1992 article in Technical Analysis of Stocks & Commodities
magazine, in which a standard deviation was used as the Volatility Index. In his
October, 1995 article in the same magazine, Chande modified the VIDYA to use his
own Chande Momentum Oscillator (CMO) as the Volatility Index.
104.Volume Adjusted Moving Average

The Volume Weighted Moving Average is a weighted moving average that uses the
volume as the weighting factor, so that higher volume days have more weight. It is
a non-cumulative moving average, in that only data within the time period is used
in the calculation.See also Exponential MA, Least Squares MA, Simple MA, Triangular
MA, Weighted MA, Welles MA, Variable MA, Zero Lag Exponential MA, DEMA, TEMA
and T3.

105.Weighted Close

The Weighted Close is the average of the high, low and close of a bar, but the close
is weighted, actually counted twice. It is used in the calculation of several
indicators. It can be used to smooth an indicator that normally takes just the
closing price as input.See also Average Price, Median Price and Typical Price.

106.Weighted Moving Average

The Weighted Moving Average calculates a weight for each value in the series. The
more recent values are assigned greater weights. The Weighted Moving Average is
similar to a Simple Moving average in that it is not cumulative, that is, it only
includes values in the time period (unlike an Exponential Moving Average). The
Weighted Moving Average is similar to an Exponential Moving Average in that more
recent data has a greater contribution to the average.See also Exponential MA,
Least Squares MA, Simple MA, Triangular MA, Welles MA, Variable MA, Volume
Adjusted MA, Zero Lag Exponential MA, DEMA, TEMA and T3.

107.Welles Wilder Moving Average

The Welles Wilder method of calculating moving averages is very similar to a Simple
Moving Average. Both calculations provide similar results. Welles designed his
formula to be easily computed by hand or with a simple calculator. For the sake of
consistency Welles’ Moving Averages are used in all Welles indicator formulas (ADX,
ADXR and ATR).See also Exponential MA, Least Squares MA, Simple MA, Triangular
MA, Weighted MA, Variable MA, Volume Adjusted MA, Zero Lag Exponential MA,
DEMA, TEMA and T3.

108.Welles Wilder Summation

The Welles Sum is the Welles Wilder method of creating the moving sum of a data
series. Each value is the sum of the last n periods. Welles designed his formula to
be easily computed by hand or with a simple calculator. The numbers will vary
slightly from a simple (arithmetic) sum. For consistency with the original formulas,
the Welles Sum is used in the calculation of Welles Wilder’s indicators (the +/-DI and
by extension the DX, ADX, ADXR).See also Moving Sum.

109.Welles Wilder Volatility System

This function calculates the componentsof the Welles Wilder Volatility System. The
components are as follows:ARC - the Average True Range (ATR) times a constant.SIC
- Significant Close, the extreme favorable close price reached while in the trade.SAR
- Stop And Reverse point, a point defined by the distance between the ARC and SIC.
The point at which a trade should be made close the current position and open a
new position in the opposite direction. This occurs when the price breaks
above/below the SAR.The Volatility System was developed by J. Welles Wilder and is
described in his 1978 book New Concepts In Technical Trading Systems.

110.Williams Accumulation/Distribution

Williams Accumulation/Distribution indicator measures market pressure. Look for


divergence with price. When the price makes a new low, but the AD does not, look
for the price to turn up, and vice versa.The Williams Accumulation/Distribution
Indicator is also knownas the Williams AD. It was developed by Larry Williams.

111.Williams %R

The Williams %R is similar to an unsmoothed Stochastic %K. The values range from
zero to 100, and are charted on an inverted scale, that is, with zero at the top and
100 at the bottom. Values below 20 indicate an overbought condition and a sell
signal is generated when it crosses the 20 line. Values over 80 indicate an oversold
condition and a buy signal is generated when it crosses the 80 line.The %R indicator
was developed by Larry Williams.

112.Zero Lag Exponential Moving Average

The Zero-Lag Exponential Moving Average is a variation on the Exponential Moving


Average. The Zero-Lag keeps the benefit of the heavier weighting of recent values,
but attempts to remove lag by subtracting older data to minimize the cumulative
effect.See also Exponential MA, Least Squares MA, Simple MA, Triangular MA,
Weighted MA, Welles MA, Variable MA, Volume Adjusted MA, DEMA, TEMA and T3.
113.Zig Zag

The Zig Zag filters out small movements in price to highlight trends. It looks for
price moves greater than the threshold level and plots straight lines between those
points. The Zig Zag is more of a visual tool than an indicator. It is non-predictive, in
fact, the formula looks forward in time to find the zig zag points. The purpose of the
Zig Zag is to make chart patterns clearer.