The weighted volume

Introduction
Joe Grenvil introduced weighted volume (OBV), in his book "The New Key to Granville profit on the stock exchange in 1963. This was one of the first and most popular indicators, which measures the positive and negative volume. The concept behind the indicator as follows: volume precedes price. Weighted volume is a simple indicator that adds the amount of the period, when the closing occurs with the increase and deducts the amount of this period, when the closing occurs with decreasing. Overall total value derived from the additions and subtractions is the amount, form a balanced line level. This line then may be compared to the price schedule of the main tool for finding a market divergence or confirmation.

Calculation
As stated above, the weighted volume is calculated by adding the amount for a certain period to the current overall value, when the price of market-based instruments rose with increasing volume and subtraction, when the price closes down.

For example, if the closing price today than yesterday's closing price, the new weighting will be equal to the amount of:

OBV = Yesterday's OBV + today's value of volume

If today's closing price is less than yesterday's closing price, the new value will OBV:

OBV = Yesterday's OBV - Today's Volume

If today's closing price is equal to yesterday's closing price, the new weighted volume is:

OBV = Yesterday's OBV

Application
The idea behind the OBV indicator is that changes in the weighted volume will be preceded by changes in prices. Rising volume may indicate the presence of the influx of money into the market-based instruments. Then, as the audience should be the example, the price of market-based instruments also will increase.

Like other indicators, the indicator OBV will take a certain direction. Rising (Bull) line is the weighted volume shows that the higher in the days of growth. If the price of similar increases, the OBV indicator may serve as confirmation of the price trend is upwards. In this case, the rising price is a result of increased demand for market-based instruments, which is a prerequisite for strong ascending trend.

However, if prices move higher, while the line volume is reduced, the presence of a negative divergence. This divergence suggests that the upward trend in demand is not supported properly, and should be seen as a warning sign that this trend will not continue long.

Numeric value-weighted volume is not so important, but rather serves to guide the line. Trader should focus on the direction of OBV and its relationship to the price of market-based instruments.

The above graph shows how the line is a weighted amount can be used as a confirmation of the price trend. The peak in September was accompanied by a subsequent reduction of price to match shipam volume, thus implying that the descending trend should continue.




The use of graphics programs

In most graphic programs Weighted volume can be constructed as an indicator. Typically, the window parameters of the first option specifies the number of periods for the formation of the rolling average, while the other options do not relate to the schedule.

TRIX Indicator

Description
Indicator TRIX - is a dynamic indicator that shows the degree of change in the percentage of triple exponentially smoothed moving average of the closing market price of the instrument. Fluctuating around the zero line, the indicator TRIX is designed to filter out traffic market instruments, which are small in relation to the larger trend of market-based instruments. The user specifies the period (eg 15) to form a rolling average, and those cycles that are shorter than this period are filtered.

Indicator TRIX is a leading indicator and can be used to predict turning points in the trend through its divergence with the price of market-based instruments. Moreover, you can create a sliding average with a smaller period (eg, 9) and use it as an impulse line to see where the indicator is ahead of her. Intersection of line indicator with its pulse line can also be used to buy or sell signals.

Calculation
To calculate the indicator TRIX, you must first select the period for the formation of an exponential moving average of closing prices. For the 15-day period, the calculation would be as follows:

1. Computes the 15-day exponential sliding average closing price;

2. Computes the 15-day rolling average of the exponential moving average, calculated in item 1;

3. Computes the 15-day rolling average of the exponential moving average, calculated in Clause 2 Now we have a triple exponentially smoothed sliding average closing prices, which considerably reduces the variability.

4. Finally, the calculated 1-day moving average percentage change, calculated in paragraph 3

Application
As the TRIX indicator measures the degree of changes in closing prices, the positive value of the indicator is interpreted as a sustained improvement in the closing market price of the instrument. The positive value of TRIX, in a manner similar to the positive development of the price, which allows the indicator to act as a buying signal whenever it crosses the zero line upwards. Similarly, crossing the zero line down implies that the price has closed below the trend at the end of each period, which may be a signal of sale.

Impulse line, as mentioned earlier, is also a useful indicator for the purchase or sale. As the pulse period is shorter than the line, the intersection of the above it suggests that the recent closing price is much higher. Buy signal occurs when the indicator TRIX crosses its line-up pulse and the signal-sale, respectively, the condition occurs when the indicator crossed his pulse down the line. During lateral movements of the market may be false signals, so the best indicator TRIX works when the price trend is developing. Like any other indicator, TRIX is desirable to use in conjunction with other indicators and aspects of technical analysis to improve the reliability obtained from the signals.

Sample

In the example with "Microsoft", all three bull crossing between indicator TRIX and his pulse was accompanied by a line dating back trends. These intersection points represent the ideal for shopping, because they were accompanied by a rapid development trend movement.

The use of graphics programs



TRIX indicator is present in most software products. The number of periods, typically defined by the first option, a pulse line may be specified in the sub window. Default settings are 15-day moving average with a 9-day pulse line. 30-day period may be used for a more conservative trend of the evidence, although 15 days would be quicker to respond to the potential formation of the trend

Indicator Arun

Introduction

Designed Tyusha Cheyndom in 1995, Arun indicator is an indicator that can be used to determine, whether the market trend is a tool or not and how strong the trend. "Arun" in Sanskrit means "Early Light of Dawn" and Cheynd chose this name for this indicator, since it is intended to show the beginning of a new trend.

Arun indicator consists of two lines, Arun (top) and Arun (down). To calculate the indicator Arun only required parameter, which is the number of time periods. Arun (top) displays the amount of time (based on per cent), which took place between the beginning of the interim period and a point which was the highest price during this period of time. If market-based instruments set a new minimum for the given time period, the value of Arun (up) will be equal to zero. On the other hand, if the market instruments rose higher than it was during the time period, the value of the indicator will be equal to 100. For each subsequent period that passes without another new high, Arun (up) moves down on the amount equal to (1 / number of periods) x 100.

Technically, the formula for Arun (up) will be as follows:

[[(number of periods) - (number of periods since the highest peak during this time)] / (number of periods)] x 100

For example, consider the construction of the line 10-periodnogo Arun (up) in the afternoon schedule. If the maximum price during the past ten days has been shown 6 days ago (4 days, starting with the period of time), the value of Arun (up) for today will be equal to ((10-6) / 10) x 100 = 40. If the minimum price for the same period was marked yesterday (ie on 9 th day), the value of Arun (down) for today, will be equal to 90.

Arun (down) is calculated in the same way in the opposite direction, by finding new minima, instead of new highs. When the new minimum is set, Arun (downstream) will be equal to 100. If the market sets a new best tool for this time period, the value of Arun (downstream) will be equal to zero. And so on ...

Formula for Arun (down):

[[(number of periods) - (number of periods with a minimum wage during this time)] / (number of periods)] x 100

Oscillator Arun

A separate indicator called Arun Oscillator can be constructed by subtracting the value of Arun (down) from the value of Arun (top). As Arun (top) and Arun (down) varies between 0 and 100, the Arun Oscillator oscillates between -100 and +100 with zero as the center line.

Basic principles of interpretation

Cheynd states that when Arun (top) and Arun (down) to move down close enough to each other, it signals that the full swing phase of consolidation, and no clear trend is not strong. When Arun (top) falls below 50, this indicates that the current trend has lost its upward momentum. Similarly, when Arun (below) falls below 50, down trend has lost its momentum. Values above 70 indicate a strong trend in the same direction, since the meaning of Arun (up or down) is high enough.

Arun Oscillator signals an upward trend when it is above zero, and the descending trend when it falls below zero. The farther from the oscillator is the zero line, the stronger the trend is developing market-based instruments.

Indicator Arun somewhat resembles indicator DMI Vayldera (and Oscillator Arun similar lines ADX Vayldera), however, the indicator Arun built in a totally different way. Differences between these two indicators can be very instructive.

The use of graphics programs

Many software packages allow users to build Oscillator indicator Arun and Arun, using a selected number of periods. Typically, the default value is 25, but it can be changed through appropriate option. The increase in the number of periods ago received signals a significant, but this may lead to delay.

Envelopes moving average

Introduction
Line simple moving average can be expanded by its environment parallel envelopes. These envelopes are rejected from the line of moving average for a certain percentage of the user to determine when prices deviated from the line of moving average for this percentage. For example, when building a 3% s envelope, we will have the upper parallel line, which is 3% above the moving average and the lower parallel line, which is 3% below the moving average.

Sample

Schedule "Cisco systems" demonstrates the 3%-s envelopes posted around the 20-day moving average price of market-based instruments. Please note, during the downward trend of the upper envelope has never been hurt, while the lower envelope has been hurt repeatedly. Movement outside the 3%-s' envelopes are essential for short-term traders who are more interested in smaller price fluctuations. Short-term analysis will consider the price outside the 3%-s' envelope as the pereprodannosti or perekuplennosti. On the other hand, when analyzing the long-term range, you can focus on prices outside the 5% or 10% s-s-envelope that surrounds the 10-week or 40-week moving average cost.

The use of graphics programs

In most graphics software, moving average envelopes can be built on the simple imposition of a price schedule. To do this, usually the first option in the parameters of the tool determines the number of periods for the moving average (the default is usually 20), while the second option sets the percentage difference between the envelope and moving average line (the default is usually 3).

Oscillator ROC

Introduction and calculation
Oscillator ROC (degree of change in percent) is very simple and yet effective dynamic oscillator, which measures the percentage change in price from one period to the next. When calculating the oscillator current price is compared to the price of a specified number of periods ago. For example, a 10-periodny ROC will be calculated as follows:

ROC = 100 * (today's closing price) / (closing price 10 periods ago)

The values of oscillator line shape, which fluctuates above and below the zero line, as the degree of change varies from positive to negative. Oscillator ROC can be used like any other dynamic oscillator, while the higher minimums, lower highs, positive and negative divergence, and crossing above and below zero for signals.

graph "Lucent" shows that a large negative divergence formed in December 1999. and oscillator ROC moved to negative territory just before the big decline in prices. Although this was an excellent signal to sell, oscillator can lead to rapid turn when it moves above and below zero. As with most technical indicators, ROC oscillator should be used in combination with other aspects of technical analysis, as well as with other indicators nedinamicheskimi.


The use of graphics programs

In most graphics programs, ROC oscillator can be built using a variety of periods, for example, 10 days or 30 days, by changing the values of the first option. The longer period of time used, the greater the fluctuation in the indicator (for both the value and duration). The second option allows the user to add a line to the ROC indicator moving average for more warning signals.

Price Channels Indicator

Introduction
Price channels like the band Bollindzhera form boundaries above and below the price bars and can be used as an indicator of variability. Price channels are formed by defining the set of periods, which will mark the graph up or at least n periods around the price bars. For example, a 20-day price channel will show the highest closing level for the past 20 days above the price line, and will observe the graph of the lowest closing level for the past 20 days below the price line. If the most recent price of a new maximum or minimum for n periods, then it will be on the schedule outside of the price channel. Price channels are different from ????? Bollindzhera that they use the minimum and maximum price values, instead of moving averages as a border.
Price channels can be applied to day, week, or monthly schedule and can shape the signals of buying and selling at the points breakthroughs. When the price breaks above or below, respectively, upper or lower the price channel, the new maximum or minimum, become active. When the price breaks above 20-day price channel, the price reached a 20-day maximum, and could potentially start the upward trend. In this situation, break the upper price channel may indicate a good time to buy a market instrument.

Sample

This schedule for the IBM breakthrough illustrates the lower channel (red arrow) followed by top-down trend. This new 20-day minimum is a signal to sell, and this signal was not deployed until the price had not crossed the June 9, the upper price channel.

The use of graphics programs



In most graphics programs, you can choose the length of time for pricing of channels. The more time taken, the more significant will be a breakthrough and a significant channel served signals.
The second option allows the user to move the price channel, left or right. For example, 10 for the second option price will move to the right channels for 10 years.

Flags and pennants

Flags and pennants are short-term continuation patterns that mark a small consolidation before the previous motion to continue. These models are usually preceded by a sharp increase or decrease in the high and mid-point of motion.

1. A sudden movement: to consider this model as a model to continue, should be a prior trend. Flags and pennants require a sharp increase or decrease at a high level. These movements usually occur at a high level and may contain GEPy. This movement is usually the first stage of a significant increase or decrease, and a flag or pennant is just a pause.

2. Flagpoles: flagpole - is the distance from the first support to overcome resistance or to the maximum or minimum of a flag or pennant. A sharp increase (or decrease), which forms the flagpole should overcome the trend line or resistance level or support. The line, built by this breakthrough to the maximum or minimum of a flag or pennant shapes flagpole.

3. Flag: model «flag» is a small rectangle that is tilted against the direction of the previous trend. If the previous movement was upward, then bent down to flag down. If the previous movement was down, the flag is bent down to up. Since the model «flag» is usually too short in duration, to have actual reactionary maxima and minima, the price should be active only occur within two parallel trend lines.

4. Streamer: model «pennon» is a small symmetrical triangle that begins with the widest part and converges, as a model (like the cone). The slope is usually neutral. Sometimes will not be certain reactionary maxima and minima, to conduct trend line and price activity should only occur within the converging trend lines.

5. Duration: flags and pennants are short-term models, which can last from 1 to 12 weeks (full time schedule). There is some controversy on the duration, and some analysts believe that 8 weeks is the limit for a reliable model. Ideally, when these patterns are formed in the period from 1 to 4 weeks. Once the flag has continued over 12 weeks, then this model is classified as a rectangle. Streamer more than 12 weeks will turn into a symmetrical triangle. The reliability of models, which continue from 8 to 12 weeks is highly debatable.

6. Breakthrough: for bovine flag or pennant break above resistance signals that the previous increase was resumed. For the Bear flag or pennant break below support signals that the previous decline has resumed.

7. Volume: The volume must be high during the increase or decrease, which forms the flagpole. The high volume provides legitimacy for the sudden and dramatic movement, which forms the flagpole. The increase in breaking the resistance (support) gives credibility of the reliability of the formation and continuation probabilities.

8. Objectives: The length of the flagpole can be used to break the resistance or support break flag or pennant, to assess the value of a subsequent increase or decrease.
Even though the flags and pennants are the usual models, the basic principles of their identification should not be ignored. It is important that the flags and pennants are preceded by a sharp increase or decrease. No sudden movements, the reliability of the model becomes highly questionable, and the sale of this model may carry additional risks. Look for confirmation of the amount in the initial move, consolidation and renewal of the movement to improve the reliability of the identification of these models.

Schedule «Hewlett-Packard» shows an example of a model «flag», which is formed after a sharp and sudden increase.

• A sudden movement: after the consolidation of three months, «Hewlett-Packard» broken resistance at the top 28 to begin a sharp increase. Trend line is built for maximum of 5 April and 16 February, has resisted, and her breakthrough came with the increase in volume. The price has increased from 28 to 38 in less than 4 weeks. (Note: is also possible that a small pennant was formed in early May with an impedance of approximately 31).

• flagpole: the distance from the break of resistance at 28 to a maximum of 38 formed a flag flagpole.

• Flag: pricing activity took place within two parallel trend lines that are bent down.

• Duration: a maximum of 38 to break at 36, a flag, a 23-day period.

• Breakthrough: the first break above the upper trend line of the flag took place on June 21 without an increase in volume. However, the price of GEO has made up a week later and a strong closing with a higher than average (red arrows).

• Volume: to confirm the model of the volume increase in the breakthrough to form a flagpole, was quite limited during the formation of the flag and increased immediately after a subsequent break of resistance flag.

• Objectives: The length of the flagpole is 20 points and was added to break the resistance at 36 for the design objectives in the region of 46.

The rise and spread with the acceleration

The rise and spread with the acceleration

In keeping with its name, the model «The rise and spread with acceleration» (BARR) is turning the model, which is formed after the excessive demand drops the price too far and too fast up. Designed by Thomas Balkovskim, the model was introduced in 1997. in the June issue of the magazine «The technical analysis of stock and commodity markets», and also included in his recently published book «Encyclopedia of graphical models».
The original model was called «The rise and accelerate the formation», or BARF. Balkovsky decided that «Wall Street» was not ready for such a term, and changed its name to «The rise and spread with acceleration». Balkovsky identified three main stages of the model: the introductory phase, burst and acceleration. Let's look at these stages and also look at the volume and reliability of the model.

1. Introductory phase: the first model is the introduction stage, which may last for 1 month or longer (for full-time schedule), and forms the base from which the trend line. During this stage, prices are rising in the usual manner, and there is no excessive acceleration. Trend line should be moderately steep. If it is too steep, then the next surge is unlikely to be quite substantial. If the trend line is not steep enough, the subsequent trend line break will occur too late. Balkovsky finds that the angle of 30-45 degrees is preferred. The value of the angle will depend on the scale (scale semi-log or arithmetic), and scale graphic. It may be easier to judge the reliability of trend lines, based on visual assessment.

2. Stage surge: a surge in acute increases, and prices are moving far away from the trend line of the opening stage. Ideally, the trend line of increasing the angle of the burst phase should be approximately 50% higher than the trend line of the opening angle of the stage. Roughly speaking, this requires an angle of 45 to 60 degrees. If it is not possible to measure the angles, the visual evaluation is quite satisfactory.

3. Reliability surge: It is important that the burst represents azhiotazhny speculative demand, which can not be supported for a long time. Balkovsky has developed what he called the «arbitrary» measurement technique to confirm the level of speculation during the burst. Distance from the highest peak stage of the burst before the opening stage of trend lines should be at least twice as much distance from the highest peak in the opening stages before its trend line. These distances can be measured by conducting a vertical line from the highest highs to the trend line of the opening stage. (See example below)

4. Turn surge: After azhiotazhny speculative demand decreases, prices are beginning to reach the peak, and a vertex. Sometimes there is a small double peak or a series of descending peaks. Prices begin to fall to the trend line of the opening stage, and a right-hand side of the burst.

5. Volume: In the market-based instruments increases during introductory phase, the volume is usually the middle and sometimes lower. When the speculative demand is beginning to shape the left side of the burst, the volume increases, because the increase is accelerating.

6. Stage acceleration: acceleration phase begins when the model overflows support trend line opening stage. Prices will fluctuate, or sometimes jump from the trend line before the break through it. Once breakthrough occurs, accelerating the phase comes to their rights and the reduction continues.

7. Supporting turns into resistance: After the trend line is broken, sometimes it is the restoration, which tests the level of resistance to chicken. The potential level of support, in turning resistance, may also be determined on the basis of corrective minima during the burst phase.
Model «The rise and spread with acceleration» can be applied to daily, weekly or monthly schedule. As stated above, the model is designed to identify speculative azhiotazhnoe increase, which is not viable over the long term. Since the price increase is very rapid in order to form the left side of the burst, the subsequent decline may be as rapid.

The graph «Level Three Communications» formed model «The rise and spread with acceleration» after prices rose in the speculative boom in early 2000. Prices have increased from 72 to 132 for 2 months, and this increase will eventually be viable.

• The opening stage of formation of 3-month period from the beginning of October, 99g. until early January 2000. Volume during this stage was relatively low and actually declined during the November-December improve.

• trend line rising from a minimum of an introductory stage, has formed an angle of 34 degrees. Visual assessment also shows that the trend line is neither too steep nor too flat.

• Stage surge began in early January, when the rise expedited with a large increase in volume. Conservative held trend line is formed the angle of 51 degrees, which was exactly 50% higher than the trend line of the opening angle of the stage.

• Distance from the highest peak before the opening stage of trend lines is equal to 13. Distance from the highest peak stage of the burst to trend line 38 is equal to the introductory stage. This is almost three times as much, and confirms the excessive speculative demand during the burst.

• After reaching a maximum of approximately 132, the prices dropped sharply and cannon from the trend line of the opening stage. The lower maximum was formed by about 115 (red arrow) and the trend line was soon broken.

• Reducing the trend continued after the break through and reached the 67 mark before the rally began remedial. Corrective rally lasted until about a horizontal line of support at around 95, before prices fall back to the new minimum.