Reading Assignments: Indicators

TA & Algo Trading Course
#501
  1. The MACD is an oscillating indicator that is both a trend following and momentum following indicator. It is used to identify short term trends and their strength through momentum.
  2. The MACD is used to identify the strength of a trend while the RSI is used to identify overbought and oversold conditions of an asset.
  3. OBV is a compilation of previous volumes and is used to confirm trends.
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#502

  1. Moving Average Convergence Divergence (MACD) is a trend-following momentum indicator that shows the relationship between two moving averages of a price. Traders use the MACD to identify when bullish or bearish momentum is high in order to identify entry and exit points for trades.

  2. While both are considered momentum indicators, the MACD measures the relationship between two EMAs, while the RSI measures price change in relation to recent price highs and lows.

  3. On Balance Volume (OBV) is a simple indicator that uses volume and price to measure buying pressure and selling pressure. On-balance volume (OBV) is a technical indicator of momentum, using volume changes to make price predictions. OBV shows crowd sentiment that can predict a bullish or bearish outcome.

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#503

Reading Assignment: Indicators

  1. What is MACD and how is it used?

Moving average convergence divergence (MACD)
oscillating indicator to spot short-term momentum.

  1. What is difference between MACD and RSI?

RSI provides movement information between zero and 100, as where MACD is moving average.

3.what is OBV and how is it used?

OBV - On balance volume, takes significant amount of volume information and compiles it in a single one-line indicator.

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#504

  1. The MACD indicator represents buying and selling momentum in the marketplace. It is used by traders to identify possible bullish or bearish divergence in trends.

  2. RSI’s signal when an asset is overbought or oversold. MACD tracks momentum.

  3. OBV tracks volume when it comes to buy and sell days, so you can identify which side of the market has a greater influence.

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#505

  1. What is MACD and how is it used?
    It is an oscillating indicator. It is both a trend-following and a momentum indicator.
    If the MACD lines are above zero for a sustained period of time, the stock is likely trending upwards. Conversely, if the MACD lines are below zero for a sustained period of time, the trend is likely down.

  2. What is the difference between MACD and RSI?
    RSI: its movement is contained between zero and 100 so it provides different information than the MACD.

One way to interpret the RSI is by viewing the price as overbought and due for a correction when the indicator in the histogram is above 70, and viewing the price as oversold—and due for a bounce—when the indicator is below 30.

  1. What is OBV and how is it used?
    It takes a significant amount of volume information and compiles it into a single one-line indicator. The indicator measures cumulative buying and selling pressure by adding the volume on “up” days and subtracting volume on “down” days.
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#506
  1. MACD is an oscillating indicator composed of two moving averages, a fast line and a slow line. They both oscillate above or below a zero-line. It is used to identify both trend and momentum
  • Trend: When the MACD lines are above zero for a certain period, it indicates an uptrend . When they are below zero it indicates a downtrend .
  • Momentum: When the fast line crosses through and above the slow line, it is a buy signal . When the fast line crosses through and below the slow line, it is a sell signal .2) The MACD gives information about trend and momentum
    The RSI give information about when there might be a shift in trends.
  1. OBV measures the cumulative buying and selling pressure by adding the volume on “up” days and subtracting the volume on “down” days.
    If the OBV is rising and the price isn’t, it is likely that the price will follow.
    If the Price is rising and the OBV is flatlining or decreasing, the price might be near the top.
    If the price is falling and the OBV is flatlining or rising we might be near a bottom
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#507 
• What is MACD and how is it used?
	• The moving average convergence divergence (MACD) is a kind of oscillating indicator that can help traders quickly spot increasing short-term momentum.
	• The crossover of the two averages could indicate increasing momentum and be used as an entry signal.
	• potential buy signals also occur when the MACD moves above zero, and potential sell signals when it crosses below zero.
• What is the difference between MACD and RSI?
	• The relative strength index (RSI) is a momentum indicator that measures the magnitude of recent price changes to evaluate overbought or oversold conditions in the price of a stock.
	• RSI's movement is contained between zero and 100 so it provides different information than the MACD.
	• One way to interpret the RSI is by viewing the price as "overbought"—and due for a correction—when the indicator in the histogram is above 70, and viewing the price as oversold—and due for a bounce—when the indicator is below 30.
	• An alternative is to buy close to oversold conditions when the trend is up and place a short trade near an overbought condition in a downtrend. - For example, suppose the long-term trend of a stock is up. A buy signal occurs when the RSI moves below 50 and then back above it. Essentially, this means a pullback in price has occurred. So the trader buys once the pullback appears to have ended (according to the RSI) and the trend is resuming. The 50-levels are used because the RSI doesn't typically reach 30 in an uptrend unless a potential reversal is underway. A short-trade signal occurs when the trend is down and the RSI moves above 50 and then back below it.
	
• What is OBV and how is it used?
	• The on-balance volume (OBV) indicator measures cumulative buying and selling pressure by adding the volume on "up" days and subtracting volume on "down" days.
	• Volume itself is a valuable indicator, and on-balance volume (OBV) takes a significant amount of volume information and compiles it into a single one-line indicator. The indicator measures cumulative buying and selling pressure by adding the volume on "up" days and subtracting volume on "down" days.
	• Ideally, the volume should confirm trends. A rising price should be accompanied by a rising OBV; a falling price should be accompanied by a falling OBV. Also - If OBV doesn't drop below its trendline, it is a good indication that the price was likely to continue trending higher even after  pullbacks

If OBV is rising and the price isn’t, it’s likely that the price will follow the OBV in the future and start rising. If the price is rising and OBV is flat-lining or falling, the price may be near a top. If the price is falling and OBV is flat-lining or rising, the price could be nearing a bottom.

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#508

  1. What is MACD and how is it used?
    It is the difference between a fast and slow moving average. The bigger it is, the stronger the momentum to either side. If it’s negative, we’re probably in a downtrend, positive signals and uptrend. The crossover points are potential buy/sell signals.

  2. What is the difference between MACD and RSI?
    RSI oscillates between 0-100 and signals when a stock is overbought (over 70) or oversold (below 30). MACD signals the momentum and trend in the market

  3. What is OBV and how is it used?
    It measures cumulative buying and selling pressure by adding the volume on “up” days and subtracting volume on “down” days. Used as a confirmation of trends we see from other indicators

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#509

  1. What is MACD and how is it used?
    Moving day average the average high and average lows is used to provide an indication of where the market is moving.

  2. What is the difference between MACD and RSI?
    RSI ranges from a value between 0-100 and shows indications of stocks being overbought and underbought compared to the Moving day average where it can go below zero and gives information where the market trend is moving.

  3. What is OBV and how is it used?
    its used as a confirmation that a trend is moving up or down

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#510
  1. What is MACD and how is it used?
    MACD calculates two moving averages, one fast and one slow, and calculates the difference between them. This is the main line of the indicator. This tells us when they cross, but without cluttering the main chart with lines. It also calculates a moving average of the above main line, and plots it as a signal line for the indicator. Finally, it plots the difference of the main line and the signal line as a histogram, to provide another way to visualize the crosses of the main line and the signal line, as well as how much the main line deviates from the signal line.

The MACD also has various ways it can be analysed. Among others:

  1. Main line crossing below the signal line: When this happens above the 0-line, it is considered a bearish signal. In the opposite situation, where the main line is below the 0-line and the main line crosses above the signal line, this is considered a bullish signal.
  2. Main line (and/or signal line) crosses the 0-line: If it crosses above, it can be a sign that we are entering bullish territory. If it crosses below, it can be a sign that we are entering bearish territory.
  3. Divergence between price and the main line: When price is making higher highs and higher lows, but the main line is making lower highs it can be viewed as a sign that the bears are taking control and a bearish reversal is imminent. The opposite is also true. When price is making lower lows and lower highs, but the main line is making higher lows it can mean the bulls are taking control and a bullish reversal is likely.

for early buy and sell signal you can use signal line crossover method. when signal line cross above its buy signal and when its cross down its sell signal.

  1. What is the difference between MACD and RSI?

RSI and MACD both are oscillating trend following momentum indicators but both measure the values in different ways.The MACD measures the relationship between two EMAs. The RSI measures price change in relation to recent price highs and lows. RSI takes the average of the bullish bars for n bars back and the average of the bearish bars for n bars back, and divides the bullish average by the bearish average and scales it to 0 to 100.

Think of it as looking at how much force the bulls provided during the period looked at vs how much force the bears provided during the same period.

both used different data but provide same buy and sell signal.

Both the indicators measure market momentum, but they measure different factors, and hence sometimes give contrarian indications. I think using both together make sense to get more true signal instead of fake signals.

  1. What is OBV and how is it used?
    On Balance Volume (OBV) measures buying and selling pressure as a cumulative indicator, adding volume on up days and subtracting it on down days.

OBV rises when volume on up days outpaces volume on down days. OBV falls when volume on down days is stronger. A rising OBV reflects positive volume pressure that can lead to higher prices. Conversely, falling OBV reflects negative volume pressure that can foreshadow lower prices.

A bullish divergence forms when OBV moves higher or forms a higher low even as prices move lower or forge a lower low. A bearish divergence forms when OBV moves lower or forms a lower low even as prices move higher or forge a higher high.

so OBV can be used to confirm the trend momentum based on strength of volume in particular direction.

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#511

MACD - trend and momentum indicator that oscillates around zero. If above zero for prolonged period of time, then the trend is up and down if below zero. It can be used for trading by setting long/short or buy/sell positions based on zero approach and cross. For example, if oscillating below zero for a while and start to climb, once it hits zero and starts climbing above it, it could be a great time to enter long position.

RSI considers oversold/overbought market by measuring the strength of the price move. It ranges between 0 and 100. Traders can use it to spot potential price moves, as often if RSI is above 70 there is a great change that price correction is coming. Likewise, if RSI is below 30, there is a higher probability that the asset is oversold and the price will move up.

The difference between MACD and RSI is that RSI mostly looks at price action whereas MACD looks at trend. However, these two together hold the most power, as slight pullback in up trend could be a great entry point for a long position, for example.

OBV is an on-balance volume and it’s an indicator that takes the volume into a single line tool. It is a useful indicator to discern the price direction of an asset. OBV and price tend to move in the same direction and should OBV go up but price does not, there is a high probability that the price will move up.

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#512
  1. The moving average convergence divergence indicator varies over time within a band above or below a centerline zero. It can help traders spot increasing short term momentum.
  2. The difference between the MACD and the relative strength index is that the RSI movement is contained between 0 and 100 and measures overbought and overall conditions.
  3. The on balance volume indicator measures cumulative buying and selling pressure by adding and subtracting volume. It is helpful for determining tops and bottoms.
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#513
  1. What is MACD and how is it used?
    MACD stand for Moving average convergence divergence and is a momentum trendindicator.
  • is calculated by subtracting the 26-period exponential moving average (EMA) from the 12-period EMA.
  • triggers technical signals when it crosses above (to buy) or below (to sell) its signal line.
  • the speed of crossovers is also taken as a signal of a market is overbought or oversold.
  • helps investors understand whether the bullish or bearish movement in the price is strengthening or weakening

  1. What is the difference between MACD and RSI?
    While both are considered momentum indicators, the MACD measures the relationship between two EMAs, while the RSI measures price change in relation to recent price highs and lows.

  2. What is OBV and how is it used?
    The On Balance Volume indicator is used in technical analysis to measure buying and selling pressure. It is a cumulative indicator meaning that on days where price went up, that day’s volume is added to the cumulative OBV total. If price went down, then that day’s volume is subtracted from the OBV total. The OBV value is then plotted as a line for easy interpretation. On Balance volume is primarily used to confirm or identify overall price trends or to anticipate price movements after divergences.

OBV is a good metric for measuring buying and selling pressure. Many people believe that buying and selling pressure precede changes in price, making this indicator valuable. Divergences especially, should always be be noted as a possible reversal in the current trend. As with most indicators however, it is best to use OBV with additional technical analysis tools.

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#514
  1. What is MACD and how is it used?
    "The moving average convergence divergence (MACD) is a kind of oscillating indicator. An oscillating indicator is a technical analysis indicator that varies over time within a band (above and below a centerline; the MACD fluctuates above and below zero). It is both a trend-following and momentum.

One basic MACD strategy is to look at which side of zero the MACD lines are on in the histogram below the chart. If the MACD lines are above zero for a sustained period of time, the stock is likely trending upwards. Conversely, if the MACD lines are below zero for a sustained period of time, the trend is likely down.2 Using this strategy, potential buy signals occur when the MACD moves above zero, and potential sell signals when it crosses below zero."

  1. What is the difference between MACD and RSI?
    “The relative strength index (RSI) is another oscillating indicator but its movement is contained between zero and 100.”

  2. What is OBV and how is it used?
    "On-balance volume (OBV) takes a significant amount of volume information and compiles it into a single one-line indicator. The indicator measures cumulative buying and selling pressure by adding the volume on “up” days and subtracting volume on “down” days.

Ideally, the volume should confirm trends. A rising price should be accompanied by a rising OBV; a falling price should be accompanied by a falling OBV."

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#515

What is MACD and how is it used?

The moving average convergence divergence (MACD) is an oscillating indicator that varies over time above and below zero; it is both a trend-following and momentum indicator.

If the MACD lines are above zero for a sustained period of time, the stock is likely trending upwards. Conversely, if the MACD lines are below zero for a sustained period of time, the trend is likely down.

What is the difference between MACD and RSI?

Both MACD and RSI are oscillating indicators, but RSI’s movement is contained between zero and 100 providing different information than the MACD

What is OBV and how is it used?

The on-balance volume (OBV) indicator measures cumulative buying and selling pressure by adding the volume on “up” days and subtracting volume on “down” days.

It is used to confirm trends; a rising price should be accompanied by a rising OBV and a falling price should be accompanied by a falling OBV.

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#516

1.What is MACD and how is it used?
It is Moving Average Convergence Divergence - oscillating indicator. It is both a trend-followinf and momentum indicator. Oscilating indicator varies within a band (above and bellow centerline) MACD fluctuates above and bellow zero.

2.What is the difference between MACD and RSI?
MACD is oscilating arround 0 (above and bellow centerline), RSI between 0 and 100. These two provide different information. RSI-Relative strength index is a momentum indicator that shows oversold (bellow 30) and overbought (above 70) conditions at the current market state.

3.What is OBV and how is it used?
It is on ballance volume. I takes a significante amount of volume information and compiles it into a single one-line indicator. The indicator measures cumulative buying and selling pressure by adding volume on ‘up’ days and substracting volume on ‘down’ days.

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#517

The moving average convergence divergence (MACD) is a kind of oscillating indicator. An oscillating indicator is a technical analysis indicator that varies over time within a band (above and below a centerline; the MACD fluctuates above and below zero). It is both a trend-following and [momentum]

RSI is calculated based on amounts bought while MACD is averages of the prices.

Volume itself is a valuable indicator, and on-balance volume (OBV) takes a significant amount of volume information and compiles it into a single one-line indicator. The indicator measures cumulative buying and selling pressure by adding the volume on “up” days and subtracting volume on “down” days.

Ideally, the volume should confirm trends. A rising price should be accompanied by a rising OBV; a falling price should be accompanied by a falling OBV.

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#518

  1. Moving Average Converge and Divergence. An oscillator tool that is used to measure an average price based on previous price records expressed by preset input. It is commonly used to identify a market momentum and market trend.

  2. MACD measures the oscillatory movement on prices, while the Resistance Strenght Index is used to express the strength of a particular moment (overbought/oversold positions).

  3. On-Balance Volume: It offers information about volume, which is can be combined with a strength indicator to define whether if the market would be up or down. A higher buy volume and a rising price could be read as a possible uptrend.

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#519
  1. Moving Average Converge and Divergence (MACD) is a kind of oscillating indicator. An oscillating indicator is a technical analysis indicator that varies over time within a band (above and below a centerline; the MACD fluctuates above and below zero). It is used as both a trend-following and momentum indicator.
  2. RSI is another oscillating indicator but its movement is contained between zero and 100 so it provides different information than the MACD.
  3. On-Balance Volume (OBV) takes trade volume and combines it into a single one-line indicator. OBV is used to confirm trends. E.g. a rising price should be be accompanied by a rising OBV and a falling price should be accompanied by a falling OBV.
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#520
  1. The moving average convergence divergence (MACD) is a kind of oscillating indicator for trend following and momentum. Using this strategy, potential buy signals occur when the MACD moves above zero, and potential sell signals when it crosses below zero.
  2. The [relative strength index (RSI) is another oscillating indicator but its movement is contained between zero and 100 so it provides different information than the MACD. This is used to show a strong buy signal when the indicator is above 70, suggesting the price as oversold and a sell signal when the indicator is below 30. During a strong up or down trend, the signals may be triggered when it dips below or above 50, quickly returning the direction it came. This will be used with other indicators because it is not always the most timely signals for trend traders.
  3. On-Balance Volume (OBV) indicator measures cumulative buying and selling pressure by adding the volume on “up” days and subtracting volume on “down” days. If OBV is rising and the price isn’t, it’s likely that the price will follow. If the price is rising and OBV is flat-lining or falling, the price may be near a top. The same is true if OBV is flat-lining or rising as price falls, suggesting a bottom is near.
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