15.9 Lessons learnt

What have we 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.