The Moving Average Convergence/Divergence (MACD) was invented by Gerald Appel sometime in the sixties and comes in various flavors, but most are based on a technique developed by McClellan (which he based on a technique developed by Haurlan). The technique is to take the difference between two exponential moving averages (EMA’s) with different periods. This
Investing Information Sources
This article lists some sources of information for technical analysis, including books, magazines, and courses. Books on Technical Analysis:Contents Design, Testing, and Optimization of Trading Systems by Robert Pardo. Published by John Wiley & Sons, Inc. The Disciplined Trader by Mark Douglas of NYIF – 1990. ISBN 0-13-215757-8 Elliott Wave Principle by A. J. Frost
Elliott Wave Theory
What is the Elliott Wave Theory?Contents R. N. Elliott developed his wave theory in the early 1934. It is a method for explaining stock market movements. Actually, Elliott wave theory helps explain economics in general, but the stock market tends to have three attributes that make it quite applicable: It is a true free market
Investing Data Sources
This article lists some sources of historical data. Note that currencies are traded over-the-counter, there are no central exchanges or market makers. Thus, currency closing prices are really just noisy, “best guesses” collected from a number of different exchanges and transactions. Yahoo has a fair amount of data, both for individual issues and for indexes.
Charting Services
Thanks to the many free quote servers on the net, you don’t need to subscribe to a data service or charting service just to get basic charts. The following sites offer a whole range of charts for a particular stock, as well as a lot of other information. Yahoo! Quotes at http://quote.yahoo.com Offers 3-month, 1-year, 2-year
Commodity Channel Index
The Commodity Channel Index (CCI) is a timing tool that works best with seasonal or cyclical contracts. It keeps trades neutral in a sideways moving market, and helps get in the market when a breakout occurs. A moving average of the CCI can also be displayed. A constant number is entered in the parameter screen
Black-Scholes Model
Black and Scholes are the mathematicians who developed a model (formula) that determines theoretical value of an option based on volatility and time to expiration. Although this valuation is a theoretical value, it is essentially the industry standard. Article Credits: Contributed-By: Kevin Lee
Bollinger Bands Basic Rules
One of the great joys of having invented an analytical technique such as Bollinger Bands is seeing what other people do with it. While there are many ways to use Bollinger Bands, following are a few rules that serve as a good beginning point. Bollinger Bands provide a relative definition of high and low.
Technical Investment Analysis
The following material introduces technical analysis and is intended to be educational. If you are intrigued, do your own reading. The answers are brief and cannot possibly do justice to the topics. The references provide a substantial amount of information. First, the references; the links point to Amazon, where you can buy the books if
Wash Sale
What is a Wash Sale?Contents A “wash sale” describes the situation in which you sell shares of some security at a loss, and within 30 days you purchase substantially identical securities. At face value, it looks like you took a loss on an investment (would would be deductible from your gross income when you do