Technical Analysis Quiz 9

Momentum oscillators in different markets

are used primarily to trade ranging markets.

They can be used to enter trends and as

of trend following indicators at the

of trends.

The moving average oscillator revisited

The

of a trendline or moving average describes the

of the trend.

The moving average oscillator is the

between two moving averages and a measure of

of the trend.

Other

are easier to use.

Momentum and the rate of change

The oscillator known as

is the

between the price

and the price a given time earlier and is a measure of the

of price change.

Rate of change is a very similar

that is the

between the price

and the price a given time earlier.

Trading rules for ranging markets

Rule 1: Go long when the indicator has

into the

zone and rises back above it.

Rule 2: Go short when the indicator has

into the

zone and falls back below it.

Rule 3: Go long on

divergences, where the indicator's first

is in the

zone.

Rule 4: Go short on

divergences, where the indicators first

is in the

zone.

Trading rules trending markets

Rule 1: In an up trend, go long when

turns up from below the

line.

Rule 2: In a down trend, go short when

turns down from above the

line.

Rule 3: Use trend following indicators to

these trends.

on momentum may be used to take profits in a trend, but unless confirmed by a

indicator, these are likely to be only

highs or lows in the trend.

Rule 4: A

drawn on momentum can also be used to confirm a trend following indicator.

Relative strength index (RSI)

Next quiz: Technical Analysis Quiz 10