15.9 Lessons learnt
- Besides the basic line-chart, there are more advanced charts available showing for example the daily trading range, opening- and closing prices of the shares.
- Indicators are very useful for you as an investor but as it’s being calculated from historical data, it cannot guarantee a future price movement.
- The MACD is a trend-following momentum indicator that shows the relation between two moving averages of a security’s price.
- The MACD triggers technical signals when it crosses above or below its signal line.
- The MACD helps traders and investors understand whether a movement up or down is strengthening or weakening.
- The relative strength index is a momentum indicator measuring the magnitude of recent price changes to determine overbought or oversold conditions in the price of a stock or other asset.
- The RSI moves within a bandwidth of 0 to 100.
- Values above 70 indicate overbought or overvalued and may indicate a trend reversal or pullback.
- Values below 30 indicate an oversold or undervalued condition.
- The Bollinger Bands takes into consideration the volatility and with that the standard deviation.
- Bollinger Bands consist of a center-line and two price channels above and below it. The center-line is a moving average, in this exponential and the bands are standard deviations.