Monday, 4 January 2016

Trading Strategy Involving Bollinger bands and RSI-Money Classic Research

Different people follow different approaches towards the Stock market to earn good profits. Some traders use the Technical analysis and others use news as the basis of the trading. The use of the Technical analysis is by far the most favorite and most common way of investing in the Stock market. In the Technical analysis the charts of the price movements are analyzed and the historic data is used to predict the future price movements. The price and volume are the two of the most important entities studied in the Stick market.
There are more than a dozen of indicators used in the technical analysis. The indicators are broadly categorized as momentum indicators and oscillator indicators. The momentum indicators are the trend following indicators and the oscillators are used to show the strength of the trends. RSI and Bollinger bands are both the oscillator indicators. The RSI stands for the Relative Strength index and helps to determine the overbought and oversold levels. The RSI index takes a value between 0 and 100. The values below 30 are considered as oversold levels and the value above 70 is considered as overbought levels. The overbought and oversold levels are the potential chances of trend reversals. The Bollinger bands are formed using moving average and the standard deviations across the moving average. The price moves confined in the Bollinger bands. Thus the breakouts from the upper and lower bands can be taken as the potential chances of trend reversal.

The RSI and Bollinger bans can be used together to confirm the buy and sell signals. The advisory firms like Money Classic Research use the strategies like stated above to provide stock market tips to their clients. They provide accurate tips in the form of equity tips and intraday trading tips to the traders to trade effectively in the Stock market.   

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