The average directional index (ADX) is a technical indicator that is used to signify the strength of a trend. It is a non-directional indicator, so it signals trend strength with no reference to whether it is an increasing or decreasing trend. The ADX is most commonly used alongside directional indicators as a complementary source of […]
The Ichimoku Cloud is among the most versatile technical indicators. It identifies support and resistance levels, gauges momentum, identifies the direction of trends and provides trading signals. With one single glance, traders can identify the trends in securities and examine further signals within that trend. While this indicator might seem complicated, it is actually a […]
A recessions refers to the moment when a country’s economy experiences decline as a result of different factors. Recession commonly lasts for 6 months or more and affects the following pillars of an economy – GDP, employment, income, retail sales and manufacturing. It is important to understand that recession is normal but unpleasant and as […]
A capital gain is a taxable event that occurs when an asset is sold for more than the purchase price. The important distinction is the act of selling, which separates it from a “paper” gain and is the reason that the increase in value is considered taxable income. An increase in value over the […]
The Keltner Channel is a technical indicator that shows a central line for a moving average and channel lines below and above. This indicator is named for Chester Keltner, who described the indicator in a 1960s book called How To Make Money in Commodities. While the name came from others who heard about the indicator […]
Bond Definition: Day Trading Terminology A bond is a debt investment where investors loan funds to a corporate or government for a particular period of time and at a variable or fixed interest. Companies, governments and municipalities use bonds to raise money with the goal of financing projects. Also referred to as fixed income securities, […]
On Balance Volume (OBV) is a momentum indicator that helps to measure the buying and selling pressure. As a cumulative indicator, On Balance Volume adds volume on up days and subtracts on down days. It utilizes volume flow thus predicting changes in stock price. According to savvy traders, the stock that closes higher than the […]
The Bearish Engulfing pattern is a chart formation where the small green candlestick is engulfed or covered by a big red candlestick. Basically, the pattern is opposite to the Bullish Engulfing pattern where the small red candlestick is eclipsed by a large green candlestick. This chart pattern helps to identify the future occurrence of a […]
The bullish engulfing pattern is a chart pattern that forms when a new candlestick opens lower and then closes higher than the entire previous candle. A look at the chart pattern will display the tails of the small candle stick as short. This allows the body of the larger candlestick to engulf the smaller black […]
Standard deviation is a statistical measure that represents the rate of divergence from the mean in a data set. The higher the standard deviation, the more the elements of the data set deviate from one another. Standard Deviation Formula It is calculated by first finding the variance, which is the sum of the difference between […]
