The Internal Bar Strength (IBS) Indicator [Including Quantified Strategies]

The Internal Bar Strength indicator (IBS) has worked remarkably well for over two decades. We can only guess why, but the stock market has been highly mean-reverting during this period, and this has, of course, given the IBS a nice tailwind. IBS is simply an indicator where you buy on weakness and sell on strength,…

Oscillating Indicators – Which Is The Best For Trading Strategies?

Which is the best oscillating indicator for trading strategies? When you start out in trading it might be a daunting task to understand all the bells and whistles provided by your trading software. There are plenty of indicators, moving averages, and oscillators to use. How can you use the indicators to make money? In this…

DeMarker Indicator Strategy — What Is It? (Backtest)

Many trading indicators are available to traders. One of them is the DeMarker indicator, which was named after a prominent technical analyst Thomas DeMark who created it. The DeMarker indicator, also known by the abbreviation “DeM”, is a technical indicator that measures the demand for the underlying asset. It compares the most recent high and…

What Is The McClellan Oscillator And Summation Index? (Trading Strategy And Backtest)

Today, there are so many indicators used in technical analysis, but only a few are really valuable to retail investors and traders. These indicators are not just used for technical analysis of stock prices but are also used to get an idea of the sentiment in the equity market, helping you determine the number of…

TRIN – Arms Index Trading Strategy – What is it? (Backtest)

Technical indicators help us analyze stocks to know how to trade them, but they focus on the external price action of individual stocks. While this is not bad in itself, knowing the general market sentiment is equally important. This is where the Arms Index comes in. But what is the index about? The Arms index…

Rolling Returns For The S&P 500 – What Is It And How Do You Calculate It?

Rolling returns for the S&P 500 are important to understand. Not only for S&P 500 but rolling returns are essential for any investment you make. What are rolling returns and how do you calculate them? What have been the rolling returns for S&P 500? Rolling returns are returns annualized (or any time frame you prefer)…

Aroon Indicator Trading Strategy — What Is It? (Backtest And Example)

Market indicators are an integral component of technical analysis. They help traders in making market decisions. Some indicators are designed to show the direction of a trend while others simply tell when a trend reversal is imminent. In this article, we look at one of the many trading indicators: the Aroon indicator. The Aroon indicator…

On-Balance Volume — What Is It? (Backtest And Trading Strategy)

Technical indicators offer powerful insights into what is happening in the market. While price is a factor in technical analysis, volume is as important as price as this tells traders the level of activity on a given security. The on-balance volume is one of the most popular volume indicators. Let’s find out what it is….

Williams Volatility Channel — What Is It? (Trading Strategy)

It seems that traders are becoming increasingly interested in the classical methods of technical analysis, and the use of trading channels have become popular again in the 21st century. Since Williams Volatility Channel is getting very popular among traders, you may be wondering what it is. Williams Volatility Channel is a trend-following indicator developed by…

NAAIM Exposure Index (Backtest Trading Strategy)

The NAAIM Exposure Index is becoming a popular indicator for tracking investor sentiment. But what is it about? Compiled by the National Association of Active Investment Managers (NAAIM), the NAAIM Exposure Index represents the average exposure to US Equity markets reported by its members. The indicator line is a two-week moving average of the NAAIM…

What Is The Put Call Ratio? Does It Work? (Backtest And Strategy)

The Put-Call ratio is a popular sentiment indicator. Extreme readings, mostly signaling panic and climax, are often used as contrarian signals to fade the market. For example, a high put reading might signal that traders and investors are panicking and are buying downside insurance (put options act as insurance) and that a market bottom is…

AAII And Market Sentiment Indicators – How To Trade It (Examples And Backtests)

Can you make money on a bullish or bearish AAII market sentiment indicator? When the pessimists turn optimistic and the optimists turn pessimistic, a bottom or top is formed. If you understand market sentiment and where traders and investors feel the most pain or euphoria, you have gained a wealth of knowledge about potential turning…

How Do You Calculate The Future Inflation Rate? (How To Measure Future Inflation)

How do you calculate the future inflation rate? Is it possible? Yes, it’s possible to estimate the future inflation rate. In this article, we show you how you can interpret what the traders in the bond markets believe about future inflation. You can estimate the future inflation rate by looking at the difference between the…

Is High Short Interest Good Or Bad? How Is Short Interest Used In Trading?

Is high short interest good or bad? Short interest in trading has been a hot topic during 2021 after Gamestop made short-sellers run for cover at prices many times higher than their entry price. But was the short squeeze in Gamestop an outlier? Which stocks perform better – stocks with high or low short interest?…

Zweig Breadth Thrust Indicator – How To Measure Market Breadth

Zweig Breadth Thrust Indicator is a market breadth indicator that helps you understand the internal strength of the market, at least that’s what the theory says. There are many breadth indicators – among them the Zweig Breadth Thrust Indicator (one of many). The best way to measure market breadth is by looking at the number…

Ultimate Oscillator Indicator Trading Strategy (Backtest)

Many momentum oscillators tend to turn very positive at the beginning of a major advance and quickly enter the overbought territory or even show bearish divergence while the market is still advancing. The ultimate oscillator attempts to correct that. Let’s find out what this oscillator is made of. The ultimate oscillator (UO) is a momentum…

Cutler’s RSI — What Is It? (Trading Strategy and Indicator Backtest)

Cutler’s RSI including backtest The RSI is a very popular trading indicator among different security traders. But there are other variations of the RSI indicator. One of them is Cutler‘s RSI. You may be wondering what it is, and in this article, we provide you with a description and how it performs in backtests. Cutler’s…

Connors RSI — What Is It? (Trading Strategy and Indicator Backtest)

Connors RSI including backtest The traditional RSI indicator has been a great tool for technical analysis and trading, but there have been some efforts by traders to improve it. One such improvement gave rise to the Connors RSI, which can be an invaluable tool for traders when applied correctly — not only does it allow…

Investors Intelligence Sentiment Index (Contrarian Sentiment Indicator)

The Investors Intelligence Index is becoming widely accepted as a means of estimating the balance between the bulls and bears. But what does it actually mean? Also known as the Advisor Sentiment, Investors Intelligence Sentiment Index is based on contrarian propositions, which suggest equity traders should act opposite to the balance of expert opinion and…

Hindenburg Omen Indicator: How to use it? – Backtest, Formula and What Is It?

Hindenburg Omen Indicator: how do you use it and what is it? Stock market crashes can wipe out traders’ and investors’ profits or even put them at a huge loss in no time. If you have been in the market long enough, you will know that stock market downturns always happen faster than the preceding…

Andrews Pitchfork Trading Strategy — What Is It? (Backtest And Example)

If you are a fan of channel trading techniques, then you will definitely want to know about this old forgotten trading technique that projects potential support and resistance lines known as Andrews Pitchfork. You may be wondering what that is: The Andrews Pitchfork trading strategy is a channel-based analysis technique developed by Dr. Alan Andrews….

Zig Zag Indicator Trading Strategy — What Is It? (Backtest And Example)

There are many technical indicators out there that are not frequently used in everyday trading but can be useful for analyzing previous price actions to easily spot useful patterns and trends. One of such tools is the Zig Zag indicator. The Zig Zag indicator is a basic tool that analysts use to analyze the price…

Advance-Decline Indicator (Strategy Backtest)

There are many tools investors use to measure investors’ sentiment in the stock market, but the advance/decline indicator is one of the simplest ones. But what does the advance-decline indicator mean? Often referred to as the advance/decline index or advance/decline (AD) line, the advance-decline indicator is a market breadth indicator that plots the cumulative difference…

Chaikin Oscillator Trading Strategy – Does It Work? (Backtest of the Chaikin Indicator)

The Chaikin Oscillator Indicator was developed by Marc Chaikin in the 1980s. It’s not widely used nor well-known, perhaps for good reasons: we didn’t manage to find any significant profitable Chaikin Oscillator Trading Strategy in any of the quantified tests we did. In this article, we briefly explain what the indicator is, how it’s calculated, and…

Average True Range Trading Strategy (ATR Indicator and System – How To Use It))

The ATR indicator is useful on its own and can be used to develop an Average True Range trading strategy. The Average True Range (ATR) was developed by Welles Wilder in the 1970s. In his famous book called New Concepts in Technical Trading Systems, published in 1978, Wilder also published the RSI and the ADX…