Thursday, 25 June 2015

Top 7 Technical Analysis Tools Securities

Basic Trading Concepts Defined

Aroon Indicator:

The Aroon osciallater is a technical indicator used to measure if a security is in a trend, and the magnitude of that trend. The indicator can also be used to identify when a new trend is set to begin. The indicator is comprised of two lines: an Aroon-up line and an Aroon-down line. A security is considered to be in an uptrend when the Aroon-up line is above 70, along with being above the Aroon-down line. The security is in a downtrend when the Aroon-down line is above 70 and also above the Aroon-up line. 


The moving average convergence divergence (MACD) is one of the most well-known and used indicators in technical analysis. It is used to signal both the trend and momentum behind a security. The indicator is comprised of two exponential moving averages (EMA), covering two different time periods, which help to measure momentum in the security. The idea behind this momentum indicator is to measure short-term momentum compared to long-term momentum to help determine the future direction of the asset. The MACD is simply the difference between these two moving averages, which (in practice) are generally a 12-period and 26-period EMA. 

To be continued tomorrow.

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