Page 62 - Trading #101 Course – Part One: Trading Basics

TRADING #101 COURSE – PART ONE: TRADING BASICS /2017-10-06

RSI Overbought and Oversold Points – Source: StockCharts.com - The standard RSI
calculation uses 14 trading days as a basis, although this figure can be adjusted based
on a trader’s individual needs

On-Balance Volume
The On-Balance Volume (OBV) indicator is a simple volume-based indicator that’s used
to understand changes in volume over time.

The OBV indicator is calculated by taking the total volume for a trading period and
assigning it a positive or negative value depending on whether the price increased or
decreased over the period. When the price increased, the volume is assigned a positive
value and a negative value is assigned when the price decreased. The positive or
negative volume total for the period is then added up to a total that is accumulated from
the start of the measure.

Traders often look at the trend in OBV over time rather than the indicator’s specific
value at any given point in time.

Stochastic Oscillator

The stochastic oscillator is one of the most recognized momentum indicators in
technical analysis. The indicator works on the premise that prices should be closing
near the highs of a trading range during upswings and toward the lower end of a trading
range during downswings.
The stochastic oscillator is plotted within a range of zero and 100. Readings above 80
are considered overbought while readings below 20 are considered oversold. The

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