Stock Market Technical Indicators Forecast Description

Indicators supported:

    ATR (Average True Range)
The Average True Range ("ATR") is a measure of volatility. It was introduced by Welles Wilder in his book, New Concepts in Technical Trading Systems, and has since been used as a component of many indicators and trading systems. Wilder has found that high ATR values often occur at market bottoms following a "panic" sell-off. Low Average True Range values are often found during extended sideways periods, such as those found at tops and after consolidation periods. The Average True Range can be interpreted using the same techniques that are used with the other volatility indicators.

    DMI (ADX, DI+, DI-) (Directional Movement Indicator)
Directional Movement was developed by Welles Wilder and is explained in his book "New Concepts in Technical Trading Systems". The indicator is used to determine if a security is 'trending' or if it is not trending. After all, except for some option strategies, one would normally want to buy a stock that is trending upward or short a stock that is trending downward.

    EMA (Exponential Moving Average)
Moving averages provide an objective measure of trend direction by smoothing the price data. Normally calculated using closing prices, moving averages can also be used on median, typical and weighted closing prices as well as other indicators. Shorter length moving averages (MA's for short) are more sensitive and identify new trends earlier, but also give more false alarms. Longer moving averages are more reliable but only pick up the big trends. It is best to use a moving average that is half the length of the cycle that you are tracking. If the peak-to-peak cycle length is roughly 30 days then a 15 day MA is appropriate. If 20 days, then a 10 day MA is appropriate. You will, however, often find traders using 14 and 9 day MA's for the above cycles in the hope that they will generate signals slightly ahead of the market.
200 Day (40 Week) moving averages are popular for tracking longer cycles;
20 to 65 Day ( 4 to 13 Week) moving averages are useful for intermediate cycles;
and 5 to 20 Days for short cycles.

    Fast and Slow Stochastic
The Stochastic process measures the latest close in relation to the price range over a given period. High values indicate the closing price is near the daily high. Low values indicate a close near the day's low. Values are considered most significant when they are between 5 and 15 or between 85 and 90. In technical analysis, it is the crossover of the index itself and the %D line that suggests trading signals. A slow stochastic is very similar to a fast stochastic, but with additional dampening. Since stochastic analysis tends to give sell signals while a market is still rising and buy signals while a market is still falling, it has been suggested by several analysts that stochastic signals be used only in the direction of the current trend. Because peaks and troughs of this index may be tipoffs to trading opportunities, Stochastic may be a good screening tool (subject to additional analysis).
Stochastic uses two parameters:

•  Calculation Period (%K): This is the number of recent days used for sampling.
•  Average Period (%D): This is the number of days to be used in calculating a moving average of the raw stochastic. The purpose of the average is to smooth the index, reducing whipsaw signals. The lower the number, the more sensitive the index.

    MACD (Moving Average Convergence/Divergence)
The MACD 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 12-day exponential moving average. A 9-day exponential moving average, called the "signal" (or trigger) line 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
• divergences.

    Momentum
The momentum indicator is a measure of price change velocity. It is a simple calculation. For each bar the momentum is calculated as the difference in price between that bar and the bar a fixed number of periods ago. Normally the closing price is used but Investor/RT allows you to calculate the indicator using other price values (e.g. high, low, median price, etc.). Investor/RT also provides an optional smoothing moving average of the raw momentum calculation. Either or both lines, raw and smoothed may be drawn on the chart. The momentum line(s) oscillate around the zero line. A change in slope of the momentum line can be an indicator of market tops and bottoms. Generally, a buy is signaled when the momentum line crosses above zero and a sell is indicated when the line falls below the zero line.

    RSI (Relative Strength Index)
Relative Strength Index (RSI) is a popular momentum oscillator. The Relative Strength Index compares upward movements in closing price to downward movements over a selected period. Relative Strength Index is smoother than the Momentum oscillators and is not as susceptible to distortion from unusually high or low prices at the start of the window. It is also formulated to fluctuate between 0 and 100, enabling fixed Overbought and Oversold levels. The most important signals are taken from overbought and oversold levels, divergences and failure swings. It has overbought level at 70 and Oversold at 30.

    SMA (Simple Moving Average)
A Moving Average smoothes raw price action by blending prices over time. Consequently, the current value of a moving average lags raw price action. A simple, or arithmetic, moving average is calculated by adding the closing price of the security for a number of time periods and then dividing this total by the number of time periods.

    WMA (Weighted Moving Average)
Weighted Moving Average is a moving average that gives more importance (weight) to the more recent periods. The further back the price, the less impact it has on the value of the indicator. This indicator calculates the average over the number of periods specified by the user. For example, in the case of a 7-period weighted average, the most recent price would be multiplied by 7 while the price 7 periods ago would only receive a value of 1 times the price. The divisor is the factorial of the number of periods. This indicator can be analyzed in the same manner as the Moving Average. It is common to use multiple averages together with crossovers generating buy and sell signals. Some traders use weighted and simple averages together to give either earlier or confirming signals.

Key features:

    Forecasts values of 10 most frequently used technical indicators
Technical indicators are the most popular analytical tools. There are huge numbers of technical indicators. We draw your attention to the main, more useful ones.

    You can set your own technical indicators' parameters
Usually technical indicators have fixed parameters, our product allows you to change parameters and set your own. It can easily improve the quality of your forecast. We do our best to satisfy our customer's needs.

    Unique automatic forecast quality estimation lowers your risks; G-criterion enabled

It is very important to evaluate forecast quality without bias. This evaluation allows taking into account possible error risk while making investment decisions. We have specially developed G criterion to evaluate the accuracy of forecast. It takes into account both forecast dispersion against true values and possible error in trend direction. G values lie in an interval from 0 to 100. The peak value is reached when the real and forecasted time series are completely identical (i.e. when values coincide). The minimal value represents the worst kind of forecast. Fortunately it never can be achieved. This criterion illustrates not only the accuracy of forecast but the reliability as well. Thus the forecast can be considered reliable if G criterion approaches the peak value of 100 because the strong deviation is improbable and the direction of price change is most likely correct. There are no such guarantees if the forecast is not reliable. Though the real value may sometimes coincide with the forecasted one there are no grounds for such concurrences. G criterion provides the evaluation of forecast reliability immediately when the forecast is ready. It helps to put into practice the effective risk management and develop the successful strategies of stock trading.

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