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Indicator Tips
Be different
... read the lines in a new way!
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Wilders
RSI An alternative take on
Wilder's Relative Strength Indicator is based on the observation
that during orderly UP trending markets, RSI values tend to stay above
50.
Similarly,
during DOWN trends, RSI values tend to remain below 50 when the RSI
lookback is 14. Consider the
RSI line crossing 50 either on the way up or on the way
down a signal that it's time to be on the alert for a trend change.
GRAFster5
draws a RSI scale line at the 50 level in addition to the usual scale
lines at the 25 and 75 RSI levels to help you with this observation.
 Lanes Stochastics
During
strong trending markets, momentum oscillators often stay in an
overbought or oversold zone for the duration of the trend, which could
be quite some time, thereby rendering the usual interpretations
useless. In these situations, consider treating crossovers of the %K
and %D stochastic oscillator lines within the overbought and oversold
zones as signals confirming a new leg of the move in the direction of
the current trend. You then need to decide when the current move is
finished. This chart image is an example of crossovers in an
overbought
zone during a strong trending move. Here the stochastic oscillator
lookback period has been set to
more than twice the usual recommended value. |
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Ceequential
This is a scarce implementation (for retail investors, at least) of a
market timing method created by
Tom DeMark. He named it Sequential. It
identifies repeating price patterns (sequences) that often
mark price exhaustion areas where the trend is likely to
consolidate or reverse. Many securities exhibit price behavior that can
be exploited
with
this method. Avoid those giving consistently false signals! Also
check
weekly and monthly charts for confirmations of daily
chart patterns. The GRAFster5
Help file explains the technique and the rules employed here in
detail. Use with
care. If this method piques your interest you should take a look
at the More Tips page.
 Kombo This
mimics the Combo indicator also by Tom DeMark. A variant of Sequential
described above, it attempts to signal market turning points before
reversals actually occur. Consider using this
indicator
alone or along with Ceequential as a filter or a confirmation tool.
This
chart image is an example of nearly coincident signals on a daily chart
of AMD. Use GRAFster5 to confirm these signals and find others
like them. |
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Last updated
Sept 16, 2007
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