The Relative Momentum Index function determines the internal momentum of a field using the number of upward and downward price changes across a given number of bars over a given period of time. Formula to calculate RMI The Relative Momentum Index is based on a ratio of the average upward changes to the average downward changes over a given period of time. The individual … [Read more...]
Understanding Stock Volume And Liquidity
Understanding that volume and liquidity in a better way will boost trading profits puts you one step closer to financial freedom. The active, professional trader should know how to act in any market, liquid or illiquid condition 1. High Volume Means High LiquidityStocks with a high volume are very liquid, not to mention they have lower spreads between the bid and ask … [Read more...]
Mechanical trading VS discretionary trading
These are two different ways to trade the stock market. Each of them constitutes to have strengths and weaknesses. F Mechanical trading is trading with set buy and sell signals. When the stock does this, and this, and this you have to buy. When it does that, and that ,and that you have to sell. This system should be back tested. You will want to make sure that the … [Read more...]
Why a stocks volume is important ?
The stocks volume is a second most important market indicator , it plays a very important role in determining future price movements of a given stock. Volume is an indicator that you can put on your chart. Unlike most indicators it is not developed by using a calculation. It simply tells you how many times a given stock was traded within a given time frame. For example if … [Read more...]
What Is Active Trading?
Trading refers to the practice of buying and selling financial instruments within the same trading day such that all positions are usually closed before the market close for the trading day. Traders that participate in day trading are called active traders or day traders. Some of the more commonly day-traded financial instruments are stocks, stock options, currencies, and a … [Read more...]