Welcome back!
Let’s continue from where we stopped. We were introduced to what indicators are, and the different types of indicators that there are from our last post. Today, we will further discuss the other types of indicators that we were not able to touch on the last post and their examples.
Recall that the types of Indicators broadly used are
- Trend Indicators
- Momentum Indicators
- Volume Indicators
- Volatility indicators
VOLUME INDICATORS
The volume of trades is a very important component in trading. It can be used to the continuation or change in a the direction of a trade. The volume of the market indicates how many participants were involved in a trading day, thereby measuring the strength of a trend and its direction. Traders use volume since, just like the volatility, it creates trading opportunities. Volume indicators are used to determine investors’ interest in the market. High volume, especially near important market levels, suggests a possible start of a new trend, while low volume suggests traders uncertainty and/or no interest in a particular market.
Types of volume indicators
- Volume
- Acceleration Bands
- Market Facilitation Index
- Chaikin Money Flow (CMF)
- Accumulation Distribution
- Volume Oscillator (PVO)
- Demand Index
- On Balance Volume (OBV)
- Money Flow Index (MFI)
- VWAP (Volume Weighted Average price)
The most used of these indicators is the market volume, it measures the number of contracts traded in a period of time and also gives a very good insight of when and where the volume appears in a market.
MOMENTUM INDICATORS
Forex momentum indicators help traders to identify the strength of a trend. It measures the speed at which the value of a security is moving in a given period. Traders that make use of the momentum indicators focus on stocks or assets that are moving significantly in one direction on high volume. Momentum indicators track strength and weakness of a trend as it progresses over a given period of time. This means that the highest momentum is always registered at the beginning of a trend while the lowest is always registered at the end.
Types of Momentum Indicators
- Accumulative Swing Index (ASI)
- Aroon Oscillator
- Aroon Indicator
- Chande Momentum
- Advance Decline Ratio (ADR)
- Oscillator
- Commodity Channel Index (CCI)
- Intraday Momentum Index
- Gravity
- Linear Regression Slope
- MA Angle
- Mass Index
- Momentum
- Price Oscillator
- Random Walk Index
- Range Indicator
- Rate of Change (ROC)
- Relative Momentum Index
- Relative Strength Index (RSI)
- Smoothed Indexed Rate of Change (SIROC)
- Stochastic
- Stochastic RSI
- Stochastic Momentum Index
- Swing Index
- Ultimate Oscillator
- Williams %R
- Williams’ Accumulation-Distribution