Momentum
- VWAP Momentum Trade
- SMA Crossover
- Market Timing Using Moving-Average Crossovers
Mean Reversion
- Ernie Chan’s Gold vs. Gold Miners
- Bollinger Bands
- RSI2
VWAP Momentum Trade
Volume weighted average price (VWAP) and moving volume weighted average price (MVWAP) are trading tools that can be used by all traders to ensure they are getting the best price, but are best suited for short-term trading and in algorithm based trading. Read More
SMA Crossover
A simple moving average (SMA) is an arithmetic moving average calculated by adding recent prices and then dividing that by the number of time periods in the calculation average. For example, one could add the closing price of the security for a number of time periods and then dividing this total by that same number of periods. Short-term averages respond quickly to changes in the price of the underlying, while long-term averages are slower to react. There are other types of moving averages, including the exponential moving average(EMA) and the weighted moving average (WMA). Read More
Bollinger Bands
The purpose of Bollinger Bands is to provide a relative definition of high and low prices of a market. By definition, prices are high at the upper band and low at the lower band. This definition can aid in rigorous pattern recognition and is useful in comparing price action to the action of indicators to arrive at systematic trading decisions.
- Bollinger Bands® are a technical analysis tool developed by John Bollinger for generating oversold or overbought signals.
- There are three lines that compose Bollinger Bands: A simple moving average (middle band) and an upper and lower band.
- The upper and lower bands are typically 2 standard deviations +/- from a 20-day simple moving average, but can be modified.
