Understanding Momentum in Investment Technical Analysis: Making Better Predictions Based on Price, Trend Strength, and Speed of Change

Description

This book explains and demonstrates the concept of momentum in chart analysis, which is of great interest to technical analysts. It includes complete explanations of overbought and oversold, where momentum fits in the broader science of technical analysis, and the importance of moving average crossover. Five major momentum oscillators are explained in depth: relative strength index, MACD, rate of change, stochastics, and Bollinger Bands. Finally, the book provides trading guidance based on momentum, involving coordination of oscillators with other indicators, reversal, and continuation signals. Momentum powerfully identifies the strength and speed of price movement. Through the use of index calculations, momentum is effective when used as a confirming indicator for other signals found in price, volume, or moving averages. Often overlooked by traders focused solely on price reversals or continuation signals, momentum provides a context to price behavior and to the price trend, and can vastly improves the timing of both entry and exit of trades. Cover Contents Introduction: The Nature of Momentum Part I: The Theory of Overbought and Oversold Chapter 1: Momentum in the Concept of Technical Analysis Chapter 2: The Concept of Overbought and Oversold Chapter 3: Moving Averages Part II: The Momentum Oscillators Chapter 4: Relative Strength Index Chapter 5: Moving Average Convergence Divergence Chapter 6: Rate of Change Chapter 7: The Stochastic Oscillator Chapter 8: Bollinger Bands Part III: Trading with Momentum Oscillators Chapter 9: Coordinating Oscillators with Other Indicators Chapter 10: Reversal Signals and Confirmation Chapter 11: Continuation Signals and Confirmation Answers to Questions About the Author Index Adpage Backcover