How True Range is different from other indicators The concept of True Range and calculation of ATR (Average True Range) is confusing for many people, as you are actually comparing three values instead of applying one exact formula. This article is a detailed guide to calculation of True Range. I’ve tried to attach a few … Read more
Using Range for measuring volatility The easiest way to quickly measure market’s volatility during a particular trading day or week is by calculating the Range. Price Range is simply the absolute difference between the highest and the lowest price reached during a particular time period (e.g. a trading day). Range = High – Low S&P500 … Read more
RSI is an oscillator – it’s purpose it to make things simple RSI (Relative Strength Index) is one of the most widely used oscillators. Oscillators are indicators calculated from price and their main purpose is… (no, not to predict the future) … to simplify our view on price action by removing the trend factor. Oscillators … Read more
This article is a detailed guide how to calculate the Relative Strength Index (RSI). RSI formula RSI = 100 – 100 / ( 1 + RS ) RS = Relative Strength = U / D U = average of all up moves in the last N price bars D = average of all down moves … Read more
Arithmetic average: the basic measure of central tendency Arithmetic average, of arithmetic mean, or just mean, is probably the simplest tool in statistics, designed to measure central tendency in a data set (which can be a group of stocks or returns of a stock in particular years). Using arithmetic average has advantages and disadvantages, and … Read more
Arithmetic average: the basic tool in statistics Arithmetic average is a good tool for measuring central tendency of data sets which represent independent values and values taken at one point of time, for example when you’re calculating average return of a number of stocks in a given time period (see arithmetic average calculation example). Calculating … Read more
This is a very basic article explaining why unweighted arithmetic average is not suitable when portfolio is not equally weighted. See other and more advanced articles about central tendency. 3 stock portfolio example Let’s say you have 1 million dollars and you want to invest it in stocks. You construct a fairly concentrated portfolio – … Read more
Arithmetic average basics Arithmetic average, or arithmetic mean, or just mean, is the very basic statistical measure. It provides quick and easy information about general level of values in a data set – it is one of the measures of central tendency. Why to calculate and use mean When you have a set of data, … Read more
There are many ways how to trade with MACD. You can read more about trend-following MACD trading and counter-trend trading. MACD Histogram vs. MACD In one of the previous articles we were discussing how MACD Histogram is (or in fact isn’t) different from the basic MACD and also the advantage of displaying the information in … Read more
MACD MACD (Moving Average Convergence/Divergence) is a widely known indicator. Its core idea is measuring the distance between two exponential moving averages with different period lengths. A little less known, but claimed by many to be more useful, is an indicator derived from the MACD, the MACD Histogram. Thomas Aspray was reportedly the first to … Read more
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