Financial trading uses some phrases that are unique, including the terms that describe whether a trade was entered by buying or selling: Long When a day trader is in a long trade, they have entered a trade by buying a contract (or group of shares, or forex lot), and are hoping that the price will go up. Day traders will often use the terms buy and long interchangeably. … [Read more...]
Put/Call Ratio: Meaning and Usage
The put/call ratio is a popular sentiment indicator based upon the trading volumes of put options compared to call options. The ratio attempts to gauge the prevailing level of bullishness or bearishness in the market. Each day the CBOE calculates the ratio below: Volume of put option contracts / Volume of call option contracts On days when the major averages perform … [Read more...]
Upside/Downside Volume: Overview
Measures of Upside/Downside separate the volumes for rising markets from those in falling markets. In essence, the indicator is displaying the new flow of volume into or out of the market. Since the value for the indicator will increase over time as more issues are added to the exchange, traders will have to determine the appropriate extreme rating for the indicator where … [Read more...]
Vertical Horizontal Filter (VHF)
Vertical Horizontal Filter (VHF) was created by Adam White to identify trending and ranging markets. VHF measures the level of trend activity, similar to ADX in the Directional Movement System. Trend indicators can then be employed in trending markets and momentum indicators in ranging markets. There are three ways to use the VHF indicator: · VHF values above or below … [Read more...]
Triple Exponential Moving Average(TRIX)
The TRIX is a momentum indicator, that is displayed as an oscillator above and below a zero line. As a momentum indicator, this oscillator is based on smoothed moving averages and their momentum to avoid insignificant daily price movements and to aid timing. It compares two triple smoothed exponential moving averages, and displays the difference as a single line with positive … [Read more...]