How to Use the Average True Range Indicator

Average True Range

Average True Range Trading Strategies Story Highlights The average true range (ATR) is a great tool for determining the level of volatility across stocks to align your investment choices with your risk profile. The ATR should not be used to identify stop loss and exit targets as past volatility is not a predictor for future activity. Read the full article →

Advance Decline Ratio – Ratio of Advancing Issues to Declining Issues


Advance Decline Ratio Definition The advance/decline ratio (A/D ratio) shows the ratio of advancing issues to declining issues. The A/D ratio is similar to the advance/decline line, except instead of subtracting the advancing and declining issues, it divides these two inputs. The benefit of using the advance/decline ratio is that it is a constant number, Read the full article →

Tick Index – Identify Intraday Market Extremes


What is the Tick Index? The tick index measures the very short term health of the markets by taking the difference between the number of stocks on an uptick and the number of stocks on a downtick.  The Tick index sums up this difference for all stocks in the New York Stock Exchange.  For example, Read the full article →

4 Simple Volume Trading Strategies


Why is Volume Important? Volume analysis is the technique of assessing the health of a trend, based on volume activity. Volume is one of the oldest day trading indicators in the market.  I would dare to say the volume indicator is the most popular indicator used by market technicians as well.  Trading platforms may not Read the full article →

Broad Market Indicators for Day Trading

Day Trading Indicators Day trading on any timeframe chart requires the knowledge of how the general market is behaving.  You want to make sure that all boats are sailing in the same direction to give your trade better odds of working.  To do this, a trader should keep an eye on a few key day Read the full article →

4 Simple Slow Stochastics Trading Strategies


Slow Stochastic Definition The slow stochastic indicator is a price oscillator that compares a security’s closing price over “n” range. The most commonly used range for the slow stochastic indicator is 14. The slow stochastic formula is calculated as follows: To calculate the slow stochastic, replace “n” with the range your are monitoring. If you Read the full article →

Fibonacci Trading

Fibonacci ratios, when applied to trading stocks, correlate two trends; let’s refer to them as primary and secondary.  The primary trend refers to a trending move in one direction while the secondary trend will refer to counter trend moves in the opposite direction.  The three most common fibonacci retracement levels are 38.2%, 50%, and 61.8% Read the full article →

Trade Volume Index (TVI) – Technical Indicator

Trade Volume Index Definition The trade volume index (TVI) detects whether a security is being bought or sold based on tick data.  The TVI provides a trader more insight into the amount of buying and selling for a security.  It tracks the total volume that occurs at the bid and ask.  So, if the trade volume Read the full article →

Best Day Trading Chart Indicators

One of the most frequent questions I receive revolves around the indicator and chart configuration I use while day trading.  What I am about to discuss is only my preferred setup; you will have to experiment to see what works best for you.  I am hoping that this discussion will guide you down the right Read the full article →

Level II Quotes – Primary Tool for Active Traders


Level II Quotes The Level II quote window provides the data for pending orders in the market. It displays the size of the best bid and offers with their respective depths. Day traders use level II to gauge the direction of the stock market over the short-term. This article will discuss the working parts of Read the full article →

Tick Charts – Tool for Active Traders

Tick Charts Definition Tick charts display a certain number of trades before printing a new bar chart.  Unlike other charts which are based on time, tick charts are solely based on trading activity.  Tick charts are a favorite for day traders who need to make quick trading decisions and do not have the time to Read the full article →

Tape Reading (Time and Sales Window)

Reading the tape is one of the essential indicators when active trading.  Many traders know about the hundreds of indicators readily available on most trading platforms, but very few have an idea of how to read and interpret the tape.  Interpret is really the best way of describing how you need to approach your relationship Read the full article →