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It is used to create custom indicators for financial charts and also to create algorithmic trading strategies for the markets. External DLL's can be referenced using EasyLanguage which greatly extends its functionality. The language was originally intended to allow creation of custom trading strategies by traders without specialized computer ...
Although it comes with a large number of pre-defined indicators, strategy components, and analysis tools, individuals can modify and customize existing indicators and strategies, as well as create their own indicators and strategies using TradeStation's proprietary object-oriented EasyLanguage programming language.
A typical option strategy involves the purchase / selling of at least 2-3 different options (with different strikes and / or time to expiry), and the value of such portfolio may change in a very complex way. One very useful way to analyze and understand the behavior of a certain option strategy is by drawing its Profit graph.
The iron condor is an advanced options strategy that combines a bear call spread (strategy No. 3) and a bull put spread (strategy No. 4). So it involves four separate legs, making it a complex ...
A long butterfly options strategy consists of the following options: Long 1 call with a strike price of (X − a) Short 2 calls with a strike price of X; Long 1 call with a strike price of (X + a) where X = the spot price (i.e. current market price of underlying) and a > 0. Using put–call parity a long butterfly can also be created as follows:
Technical analysts also widely use market indicators of many sorts, some of which are mathematical transformations of price, often including up and down volume, advance/decline data and other inputs. These indicators are used to help assess whether an asset is trending, and if it is, the probability of its direction and of continuation.
At about the same time, portfolio insurance was designed to create a synthetic put option on a stock portfolio by dynamically trading stock index futures according to a computer model based on the Black–Scholes option pricing model. Both strategies, often simply lumped together as "program trading", were blamed by many people (for example by ...
Technical indicators are a fundamental part of technical analysis and are typically plotted as a chart pattern to try to predict the market trend. [2] Indicators generally overlay on price chart data to indicate where the price is going, or whether the price is in an "overbought" condition or an "oversold" condition.