COMMODITY CHANNEL INDEX

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Commodity Channel Index (CCI) created by Donald Lambert. It measures the variation of a security's price from its statistical mean. High values show that prices are unusually high compared to average prices whereas low values indicate that prices are unusually low.

The CCI typically oscillates between ±100. To use the CCI as an overbought/oversold indicator, readings above +100 imply an overbought condition (and a pending price correction) while readings below -100 imply an oversold condition (and a pending rally).

A complete explanation of the CCI calculation is beyond the scope of this book.

The following are basic steps involved in the calculation:

1.Add each period's high, low, and close and divide this sum by 3.

2.Calculate an n-period simple moving average of the typical prices computed in Step 1.

3.For each of the prior n-periods, subtract today's Step 2 value from Step 1's value n days ago. For example, if you were calculating a 5-day CCI, you would perform five subtractions using today's Step 2 value.

4.Calculate an n-period simple moving average of the absolute values of each of the results in Step 3.

5. Multiply the value in Step 4 by 0.015.

6. Subtract the value from Step 2 from the value in Step 1.

7. Divide the value in Step 6 by the value in Step 5.

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MACD Indicator

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MACD

One of The Famous Indicators. You can use any period of day to calculate MACD. I usually use 30-day moving average and 60-day moving average. If you want to play fast or swing trading use 5-day moving average and 10-day moving average!! Hmm you can Use 5-day (Fast Trade) or 20-day (Long Trade) moving average for SIGNAL!!

When the MACD is above zero, it means the 30-day moving average is higher than the 60-day moving average. This implies a bullish, or upward, shift in the supply/demand lines. When the MACD falls below zero, it means that the 30-day moving average is less than the 60-day moving average, implying a bearish shift in the supply/demand lines.

The MACD line is calculated by subtracting the value of a 60-day exponential moving average from a 30-day exponential moving average. A 20-day dotted exponential moving average as the MACD "SIGNAL" line. That is MACD indicators.

Look Picture Above!!!

BUY time when MACD line cross SIGNAL line from bottom to top.

SELL time when MACD line cross SIGNAL line from top to bottom.

WARNING sell all your stock if MACD line and SIGNAL line can not back above 0 lines, it is BEARISH TIME!!!!

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DEAD CROSS

When MA30 line move from top to bottom and cut MA40 line that’s I call DEAD CROSS. You can use another MA lines, like MA5 and MA 10 for fast trade. Valid DEAD CROSS happened when MA30 line and MA40 line crossed above MA60 line. If MA30 line and MA40 line move below MA60 lines or crossed it, pleaseee CUT LOSS your shares, “DANGEROUS AHEAD”.

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GOLDEN CROSS

When MA30 line move from bottom to top and cut MA40 line that’s I call GOLDEN CROSS. You can use another MA lines, like MA5 and MA 10 for fast trade. Valid GOLDEN CROSS happened when MA30 line and MA40 line crossed below MA60 line. If MA30 lines not back below GOLDEN CROSS point, just let your profit run.

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MOVING AVERAGES

The most popular method. A Moving Average is an indicator that shows the average value of a security's price over a period of time. When calculating a moving average, a mathematical analysis of the security's average value over a predetermined time period is made. As the security's price changes, its average price moves up or down. Moving averages can be calculated on any data series including a security's open, high, low, close,volume, or another indicator. A moving average of another moving average is also common. Im ussualy use MA30, MA40, MA60, and MA200 days volume.

Example :

For example, to calculate a 30-day moving average of ANTM: First, you would add ANTM's closing prices for the most recent 30 days. Next, you would divide that sum by 30; this would give you the average price of ANTM over the preceding 30 days. You would perform the same calculation tomorrow: add up the previous 30 days' closing prices, divide by 30, THAT’S MA30.

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RELATIVE STRENGTH INDEX (RSI)

Overview
The Relative Strength Index ("RSI") is a very popular indicator. It used by many expert trader. It was first introduced by Welles Wilder in an article in Commodities (now known as Futures) Magazine in June, 1978. Step-by-step instructions on calculating and interpreting the RSI are also provided in Mr. Wilder's book, New Concepts in Technical Trading Systems.

Interpretation
When Wilder introduced the RSI, he recommended using a 14-day RSI. Since then, the 9-day and 25-day RSIs have also gained popularity. Because you can vary the number of time periods in the RSI calculation. I always use 30-day RSI. You can use 100-day RSI for long term play.

The RSI have ranges between 0% and 100%. The RSI usually tops above 70% and bottoms below 30%. If RSI moved from 100% to 70% and touch 50%it is an indication of BEARISH, if RSI moved from 0% to 30% and touch 50% it is an indication of BULLISH. The Best Stocks to buy always move above 50%.

Formula
RSI= 100- [100/ {1+ (UP/DOWN) } ]
UP = Average of upward price change
DOWN = Average of downward price change Read More....