How to Use ADX (Average Directional Index)

When trading, it can be helpful to gauge the strength of a trend, regardless of its direction. And when it comes to evaluating the strength of a trend, the Average Directional Index is a popular technical indicator for this purpose. The Average Directional Index, or ADX for short, is another example of an oscillator. ADX fluctuates from 0 to 100, with readings below […]

How to Use Williams %R (Williams Percent Range)

The Williams Percent Range, also called Williams %R, is a momentum indicator that shows you where the last closing price is relative to the highest and lowest prices of a given time period. As an oscillator, Williams %R tells you when a currency pair might be “overbought” or “oversold.” Think of it as a less popular and more sensitive version of Stochastic. As a momentum […]

How to Use RSI (Relative Strength Index)

Relative Strength Index, or RSI, is a popular indicator developed by a technical analyst named J. Welles Wilder, that helps traders evaluate the strength of the current market. RSI is similar to Stochastic in that it identifies overbought and oversold conditions in the market.   It is also scaled from 0 to 100.   Typically, readings of 30 or lower indicate oversold market […]

How to Use the Stochastic Indicator

How to Use the Stochastic Indicator

The Stochastic oscillator is another technical indicator that helps traders determine where a trend might be ending. The oscillator works on the following theory: During an uptrend, prices will remain equal to or above the previous closing price. During a downtrend, prices will likely remain equal to or below the previous closing price. This simple momentum oscillator was created by George Lane in the late 1950s. Stochastics […]