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The use of Bollinger Bands varies widely among traders. Some traders buy when price touches the lower Bollinger Band and exit when price touches the moving average in the center of the bands. Other traders buy when price breaks above the upper Bollinger Band or sell when price falls below the lower Bollinger Band. [4]
Technical trading strategies were found to be effective in the Chinese marketplace by a 2007 study that states, "Finally, we find significant positive returns on buy trades generated by the contrarian version of the moving-average crossover rule, the channel breakout rule, and the Bollinger band trading rule, after accounting for transaction ...
Contrarian investing is an investment strategy that is characterized by purchasing and selling in contrast to the prevailing sentiment of the time. [1]A contrarian believes that certain crowd behavior among investors can lead to exploitable mispricings in securities markets.
When researching stocks, there are two approaches you can use: fundamental analysis and technical analysis. The former focuses on the financial health of a company while the latter focuses on how ...
A stock that surpasses its support or resistance level is considered a breakout stock. These levels represent the price points that the stock has struggled to move beyond during a specific period.
Moving average envelopes are similar to other technical indicators, such as Bollinger Bands and Keltner channels, except that these also vary the width of the bands/channels based on a volatility measure. Unless the envelopes are placed very close to the moving average, the current price will normally be inside the envelope.
The lines above and below are drawn a distance from that center line, a distance which is the simple moving average of the past 10 days' trading ranges (i.e. range high to low on each day). The trading strategy is to regard a close above the upper line as a strong bullish signal, or a close below the lower line as strong bearish sentiment, and ...
Past trends are identified by drawing lines, known as trendlines, that connect price action making higher highs and higher lows for an uptrend, or lower lows and lower highs for a downtrend. "Bulls and Bears: The Great Wall St. Game" was a board game published in 1883 Statues of the two symbolic beasts of finance, the bear and the bull, in ...