TIMING FACTORS
- Money Flow Index (MFI) is a momentum indicator that measures
the strength of money flowing in and out of a security. It is related to the Relative Strength Index (RSI) but whereas
the RSI incorporates only prices, the Money Flow Index accounts for volume. Money Flow Index is interpreted as
the following: Look for divergence between the indicator and the price action. If the price trends higher
and the MFI trends lower (or visa versa), a reversal may be imminent. Look for market tops to occur when the MFI
is above 80. Look for market bottoms to occur when the MFI is below 20.
- Relative Strength Indicator (RSI) is a popular
oscillator. The name is slightly misleading, as the RSI does not compare the relative strength of two securities
but rather the internal strength of a single security. A more appropriate name might be "Internal
Strength Indicator".
- MACD (Moving Average Convergence/Divergence) is a
trend-following momentum indicator that shows the relationship between two moving averages of prices. The
MACD is the difference between a 26-day and a 12-day exponential moving average. A 9-day exponential
moving a average , called the "signal" (or "trigger" line) is is plotted on top of the MACD to
show buy/sell opportunities. The MACD proves most effective in wide-swinging trading markets. There
are three popular ways to use the MACD : crossovers, overbought/oversold conditions and divergences.
- RMO Trade Model
consists of 4 key modules:
1. The RMO detects the primary trend of
the instrument's trading value.
2. Swing Trader (Indicators & Expert) detects
each swing within a trend and automatically places red (Sell) or
blue (Buy) arrows on the price chart at these points.
3. Sentiment Detector colors the OHLC chart bars
red (bearish) or blue (bullish) indicating the prevailing
sentiment.
4. Exit Swing Indicator is used only when
registering a profitable trade as a trailing stop loss and works well as an
exit signal.
-
Color Code:
RED Symbols in SELL/WATCH indicate
GREEN Symbols in BUY/HOLD indicate
(1) an unconfirmed BUY ALERT (top) or
(1)
an unconfirmed SELL ALERT (top) or
(2) a confirmed SELL ALERT (bottom)
(2) a confirmed BUY ALERT (bottom)
BLUE Symbols of NEW ADDITIONS usually
placed
on top of BUY OR SELL ALERT columns.
-
Book References:
Battle for Investment
Survival by Gerald Loeb
Gorilla Game
by
Moore, Johnson and Kippola
Visual Investor
by John
Murphy
Technical Analysis from A to Z
by Steven Achelis
Intelligent
Investor by Benjamin Graham
How to Make Money in Stocks by William J. O'Neil
How to Select Stocks
Using Technical Analysis by Martin J. Spring
Investor's Business Daily and the Making of
Millionaires by David Saito-Chung
Beating the Streets
by Peter Lynch and John Rotchild
Power Investing With
Sector Funds: Mutual Fund Timing & Allocation Strategies
by Peter W.
Madlem
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