In an earlier post, “Anticipating Turning Points,” I mentioned that it is far better to anticipate the reversion to the mean using oscillator indicators rather than waiting for confirmation. There will always be lag in computing the indicator, and it is…
In an earlier post, “Anticipating Turning Points,” I established that it is far better to anticipate the reversion to the mean using oscillator indicators rather than waiting for confirmation. There will always be lag in computing the indicator, and it…
It’s commonly assumed that prices have a Gaussian, or normal, Probability Density Function (PDF). A Gaussian PDF is the familiar bell-shaped curve where 68% of all samples fall within one standard deviation about the mean. This is a really bad…
The simple definition of a Relative Strength Index (RSI) indicator is the sum of all the price changes up less the sum of all the price changes down, divided by the absolute value of all the price changes over the…
Conventional wisdom using oscillators, such as the Stochastic or RSI, has the trader wait for confirmation after indicator turning points have occurred before placing the trade. This chart demonstrates this concept. The green arrows denote buying when the indicator crosses…
