Bollinger Bands are a technical analysis tool invented by John Bollinger in the 1980s. Having evolved from the concept of trading bands, Bollinger Bands can be used to measure the highness or lowness of the price relative to previous trades.
So, to figure out how to use them, let’s look at a chart of US Steel:
Ok, [...]
Parabolic SAR is a time/price system first introduced by J.Welles Wilder in his acclaimed book “New Concepts in Technical Trading Systems” (1978). SAR stands for ’stop and reverse’ and the term ‘parabolic’ comes from the shape of the curve (resembling a parabola) created on the technical chart.
Here is what a chart looks like with Parabolic [...]
RSI stands for Relative Strength Index. It is a lower (under the graph), technical indicator that is designed to tell you when a stock is “oversold” or “overbought.”
It is calculated using this formula:
RS = Average of x days’ up closes / Average of x days’ down closes
Here is what it looks like on a graph:
The [...]
