Studies
Gaussian Filter
The Gaussian Filter is an indicator that, through the Gaussian function, provides a filter within a trend. In practice, using the Gaussian Filter, it is possible to eliminate disturbances (false signals) within a defined trend. Since it is only a filter, it enters into each use accompanied by another trend indicator.
McGinley Dynamic
The McGinley Dynamic Moving Average (MDMA) is a technical analysis indicator designed by trader John R. McGinley in 1990. It is a unique moving average designed to be more responsive to price movements than traditional moving averages. Unlike other moving averages, the MDMA adjusts its speed based on market volatility, which helps reduce lag and provide more accurate signals. The MDMA was developed as a tool for traders to identify trends and potential trading opportunities more effectively. The importance of the MDMA lies in its ability to provide a smoother and more accurate representation of price movements, which can help traders make more informed trading decisions. Over the years, MDMA has gained popularity among traders and is now widely used in various financial markets, including stocks, futures, and forex. The McGinley Dynamic Moving Average (MDMA) can be used in trading to identify potential entry and exit points with greater accuracy. One way to use MDMA is to take advantage of its ability to reduce the delay in identifying trends by entering a long position when the price rises above the MDMA and exiting the position when the price falls below the MDMA. Traders can also combine MDMA with other indicators, such as the Relative Strength Index (RSI) or Moving Average Convergence Divergence (MACD), to confirm signals. Additionally, MDMA can help traders with risk management techniques, such as placing stop-loss orders below the MDMA in a long position or above the MDMA in a short position to limit potential losses.
Parabolic SAR
The Parabolic SAR is an indicator created by Welles Wilder in 1978. In its original formulation it is a stop and reverse system, so it is always on the market, and for this reason it is called Parabolic SAR, where SAR indicates Stop and Reverse. The Parabolic SAR produces a curve that resembles a section of a parabola and which is normally found below the price bars in a long trend and vice versa in a short trend. This curve represents a trailing stop level: when it is touched, the position on the market must be closed and reversed. The peculiarity of the calculation is that it contains an acceleration factor that brings the curve ever closer to the price when there are new highs or new lows.
Pivot High
Price of the highest pivot point or "Not-a-Number" if there was no higher point than the pivot.
Pivot Low
Price of the lowest pivot point or "Not-a-Number" if there was no lower point than the pivot.
Rainbow
The Rainbow is an indicator that contains six Moving Averages calibrated on different periods.
Simple SuperTrend
Simplified version of the SuperTrend indicator
SuperTrend
SuperTrend is an indicator created by Oliver Seban that can be applied to almost all assets. Similar in concept to the Parabolic SAR, with the added advantage of positioning itself horizontally in the trading range, thus avoiding an early exit from the market, the SuperTrend is an indicator that can be very useful for the correct exit from the market. It is very simple to interpret because it is composed of a series of points (or a line), one for each bar, under the CLOSE which indicates the start of an uptrend and a series of points (or a line), always one for each bar, above the CLOSE which gives us the indication of a downtrend, so in an intraday operation there is nothing else to do but wait for it to change position. The only drawback is that the delay in the change of direction, when the difference between the two values of the bar of the graph that produced the change occurs, will be very large, producing a significant percentage loss. The use of this indicator must be combined with other indicators that identify the failure of the trend, for example the “Price ROC”.
Swing High
The Swing High refers to a peak reached by an indicator or by the price of a stock before a decline. A swing high is formed when the highest high reached is higher than a given number of highs positioned around it. A series of consecutively higher swing highs indicates that the security in question is in an uptrend. A swing high can occur in a sideways or trending market. Swing highs are useful to identify and use when trending, range trading, or when using technical analysis indicators. Analyzing swing highs helps a trader determine the direction and strength of a trend.
Swing Low
A swing low is a term used in technical analysis that refers to the lows reached by a security's price or indicator during a given period of time, usually less than 20 trading periods. A swing low is created when a low is lower than any other surrounding price during a given period of time. The opposite counterpart of a swing low is a swing high. Swing lows and swing highs are used in different ways to identify trends and ranges of volatility.
Volatility Stop
The Wilder Volatility Stop was introduced by Welles Wilder in his book “ New Concepts in Technical Trading Systems”. The Welles Wilder Volatility Stop calculates the signal's long stop by subtracting an ATR multiple from the "significant close" in the lookback period. In an uptrend the "significant close" is found at the highest CLOSE since the start of the trend. On the contrary, for the short stop adds the ATR multiple to the “significant close”. The “significant close” is therefore the lowest close since the start of the trend. When used with time-based bars, the trailing stop here fits the current market context . This allows the channel to stop widening when volatility increases and narrowing when it decreases. Wilder used a default lookback period of 7 bars for his Volatility Stop. When used with longer lookback periods, the “significant close ” can be replaced with a Donchian Channel calculated from the bar closes. Using the Donchian Channel is the standard approach for calculating the Chandelier Stop. In this scenario, a longer lookback period is applied, typically 22 bars.By activating this option, the long stop subtracts a multiple of the ATR from the highest close within the lookback period. In contrast, the short stop adds a multiple of the ATR to the highest close within the lookback period.
Williams Alligator
Like many other trend indicators, the alligator indicator works by plotting multiple moving averages (MAs) on a chart. Three moving averages are used, each representing a part of the "alligator": a blue line represents the jaw, a red line represents the teeth, and a green line represents the lips. The way the indicator works can be explained using the following analogy. When the alligator's jaw, teeth, and lips are closed (the moving average lines are intertwined), it means that it is tired or sleeping. This is when many traders avoid taking a position because the trend is too weak. The longer the alligator sleeps, the hungrier it becomes: when it wakes up, it is ready to hunt bears and bulls. The alligator opens its jaws (the lines cross and move up or down) and eats until it is full. So now the alligator has lost interest in eating and closes its mouth to rest (the lines move closer together). This is when some traders close their positions if they have made a profit, as the upside or downside may have stopped.
Williams Fractals
The Williams Fractal indicator aims to detect reversal points through highs and lows. It is known for being one of the first indicators to use fractals and introduce them to mainstream trading. Typically, the indicator is shown with a green or red dot to indicate its high or low status.
Zig-Zag
The Zig Zag indicator reduces the impact of price fluctuations and is used to help identify price trends and changes in price action. Points are drawn on a chart whenever prices reverse by a greater percentage of a chosen variable. An analyst can set the percentage level to trigger the indicator. Straight lines are then drawn connecting these points.