ABCs Of Trade Account Management
The oscillators are extremely useful in times of market when there are sideways trends. At these stages moving averages or other trend tools do not provide clear signals. In these conditions, technical analysis oscillators give the signals that allow them to benefit from periods without trend.
At a time where prices follow a definite bullish or bearish trend, oscillators provide key information as the price nears end zones known as overbought or oversold. The oscillators also warn about the weakness of a trend when they show differences either on the graph of contributions or other oscillators. The makes it easier to improve trade account management.
Usually plotted below the graph of contributions, either as lines or histograms and measure the strength of the trends and movements in the price. When detected weakness in the trend is suspected to be reversed.
They are calculated almost exclusively by computers and information systems in real time. Although there are an infinite number of oscillators, the main ones are momentum, stochastic oscillator, relative strength index (RSI Index) and moving average convergence.
Due to the use of computers, constantly generate new technical indicators. Some of the classic tools commonly used are Elliot Wave Theory, Parabolic SAR Parabolic and Candlestick Charts.