It is when price & indicator are giving a different set of information. For instance, if price is going higher but indicator is not or viceversa, this shows that there is a dispute. In ideal case scenario – If price making high, indicator should also
1/n 🧵on Relative Strength Index (RSI), one of the widely used Indicator in technical analysis by traders.
I am sharing: 1. Intro and the birth of RSI 2. What info RSI indicates 3. Application of RSI with chart patterns 4. Support/Resistance in RSI 5. Range Shift 6. Divergence
2/n The concept of RSI was first introduced in the book “New Concepts in Technical Trading Systems.” By J. Welles Wilder Jr. Most of us get so attracted to the indicator itself we forget to study the background of Scientists and how the indicator got its life.
3/n Understanding the psychology of the researcher is way more important than the indicator itself. Because indicator is the reflection of researcher’s personality and what they are looking into the markets (and charts).
Moving Averages 🧵
Widely used indicator by traders but with a lesser understanding of what it reflects and how it should be analysed.
In this thread: 1. MA and possible use case to help you make trading decisions 2. Mean-reversion 3. Disparity
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Moving Average (MA) is a statistical calculation used to analyse a different subset of the full data set. In technical analysis, MA is used as an indicator to help us analyse stock by smoothing out the price data by creating a constantly updated average price
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By calculating the moving average, the impacts of random, short-term fluctuations on the price of a stock over a specified time frame are mitigated.
OHLC 1. Bullish Engulfing candle on Daily timeframe 2. Eight-day price loss recovered in a day
P&F 1. On the daily timeframe, the formation of 100% Low Pole + DTB on HP. The bullish formation we can trust 2. On 0.15% x 3; 1-min timeframe, presence of Anchor follow-through + Probable DTB (988.7) on HP 3. Open Vertical counts on 1-min charts are 999 and 1006