Each one of us must have absolute
knowledge about what we are stepping into. However, in case of trading, it is
different as trading is a vast subject so you cannot have the entire knowledge
of the subject. Trading is said to be simple, but not easy, thus while trading
in stocks you need to be attentive as you may lose all your money that you have
invested. However, in order to get high returns, you must be capable of
generating accurate trading tips. There are various technical indicators,
oscillators and trading strategies that help you in producing accurate buying
and selling signals of the stocks.
It is not easy to understand each type
of technical indicators to analyze the market, but you must have the knowledge
about few easy-to-use technical indicators.
Chaikin Oscillator is one of the
frequently used oscillators by the technical analysts, which is named after its
developer. Marc Chaikin developed this oscillator that is deployed to measure
the accumulation and distribution line of the moving average convergence
divergence. The technical analysts calculate the Chaikin Oscillator by
subtracting the exponential moving average of the accumulation/distribution
line of 10 days from EMA of 3 days.
However, you must also analyze the
market fundamentals, as both the technical analysis and fundamental analysis are
required to succeed in trading. The fundamental analysts ensures to study the business
performance to gather information about the future direction of stock prices. The
experts believe that the more you have the updated information, more you have
the ability to predict the market precisely. On the other hand, technical
analysts believe that all known information has already priced into the market.
Thus, it creates new patterns, which helps you in predicting the movement of
stock prices and the future of market. The Chaikin oscillator is used by the
technical analysts to find directional trends in momentum.
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