Hi Guys,
How was the day? I first intend to learn before I trade and to share those secrets after my trade..
As I told you before,the intention of this blog is to train the traders to trade with some simple techniques that has been written as elaborated theories or exaggerated by the Stock Market Experts threatening people to enter into this business.
First We have to believe that we can understand and achieve anything in this world under the sun.
Yes,I agree,trading in this business , theories and studies Stock Market ,like an ocean..So I begin things randomly , share my own views with the others as much simple as possible..
It may be little difficult for the beginners at first but goes on easier if you do follow these once or twice in a day regularly so that you attain a great level of confidence,no doubt in that..
In this post first lets talk a little about Coppock Indicator and Force index
1. COPPOCK INDICATOR
1. The Coppock Indicator was developed by Edwin Coppock, a US investment advisor. It is a momentum oscillator that was designed for long term investors to begin accumulation at the beginning of a bull market. The Coppock Indicator signals the beginning of a bull market when it crosses above the zero line. This signal is usually after the first leg of a bull market is underway, thus it’s highly reliable.
2.FORCE INDEX
Here Dr. Alexander Elder says about FORCE INDEX which also plays an important part in trading
“Force Index is an oscillator developed by this author. It measures the force of bulls behind every rally and of bears behind every decline.
Force Index combines three essential pieces of market information – the direction of price change, its extent, and trading volume. It provides a new, practical way of using volume to make tradingdecisions.
Force Index can be used raw, but it works better if you smooth it with a moving average. Force Index smoothed with a short MA helps pinpoint entry and exit points. Force Index smoothed with a long MA reveals major changes in the force of bulls and bears.
A 2-day EMA of Force Index provides a minimal degree of smoothing.It is useful for finding entry points into the markets. It pays to buy when the 2-day EMA is negative and sell when it is positive, as long as you trade in the direction of the 13-day EMA of prices.
A 13-day EMA of Force Index tracks longer term changes in the force of bulls and bears. When it crosses above its centerline, it shows the bulls are in control. When it turns negative, it shows that bears are in control. Divergences between 13-day EMA of Force Index and prices identify important turning points.”
Force Index combines three essential pieces of market information – the direction of price change, its extent, and trading volume. It provides a new, practical way of using volume to make tradingdecisions.
Force Index can be used raw, but it works better if you smooth it with a moving average. Force Index smoothed with a short MA helps pinpoint entry and exit points. Force Index smoothed with a long MA reveals major changes in the force of bulls and bears.
A 2-day EMA of Force Index provides a minimal degree of smoothing.It is useful for finding entry points into the markets. It pays to buy when the 2-day EMA is negative and sell when it is positive, as long as you trade in the direction of the 13-day EMA of prices.
A 13-day EMA of Force Index tracks longer term changes in the force of bulls and bears. When it crosses above its centerline, it shows the bulls are in control. When it turns negative, it shows that bears are in control. Divergences between 13-day EMA of Force Index and prices identify important turning points.”
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