This indicator is named after its inventor, Mr. Larry William, based on the same concept as Stochastic, only in creating a graph, it is inverted, that is, the Scale will climb from 0 down to 100 or there is a small value above it. So the overbought area means the area above the 20 line and the oversold area below the 80 line. Instead, it measures the distance between the closing price and the high in N days, but generally 10 days (N = 10, unlike the 5-day Stochastic indicator ). Williams-R-formula.png William\u0027s %R indicator is almost the same as Stochastic indicator, so some people refer to William\u0027s %R as 10-day Stochastic. In the case of William\u0027s %R, we use the 80, 20 line instead of the 70, 30 line of the previous oscillator because William\u0027s %R is very sensitive. This makes it easy to fake signals, thus expanding the range. In fact, William\u0027s himself offered it below 95% as a buy signal. (Don\u0027t forget that the values run upside down from 0 to the highest and chase down to the lowest 100) and above 10% is a sell signal. In fact, William\u0027s does not offer a moving average as a signal in the same way as Stochastic, but some analysts use a moving average, but because William\u0027s %R is a Stochastic, so it runs. Very fast Until sometimes giving an error signal some technical analysts therefore use it only factor with other technical tools only. You can learn more about William\u0027s %R indicator from 10. For example, using William\u0027s %R to stock prices is shown in the example in the image below where an arrow below or equal to 95 represents a buy or hold moment according to the above principle. Or equal to 10 as in the example, it will be a moment to sell or drain the stock. However, if you observe carefully It can be seen that the adjustment of William\u0027s %R sometimes the share price does not respond much. For example, around number 1, 2, and 3, which is until the stock price drops to the end. Then bounced up, William\u0027s %R hit the -100 line 3 times (it is said that if William\u0027s %R comes in near zero or 100 and there is a drop or rise, the price has a chance to go down or In addition) William %R can do Divergence with the price as well. This will make the signal more significant. william%R 02.png

stochastics-oscillator-percent-k-formula-alpharithms.jpg stochastics-oscillator-percent-d-formula-alpharithms.jpg Stochastic It is a very popular tool. For sideways swinging markets and for those of you who like to play fast, Stochastic is so well-known by George Lane that many people think that Lane invented it. In fact, this indicator has been around for decades. 1960s, on behalf of the Investor Educators Company, under the title of the article Stochastic Process. Part of it explains the Stochastic Process of the price, but there is also an indicator in the end. It appears that it has been done. The title of the article became part of the indicator name, despite the fact that the Stochastic Indicator is not directly related to the theoretical Stochastic Process. Stochastic is based on the observation that while the price is rising The closing price tends to move higher towards the High or the upper frame of the price more. But during the price drop The closing price will come down close to the Low or the lower frame of the price. More as well Thus, the tool measures the ratio of the closing price rising above the Low to the total spread from High to Low over the last N days, usually 5 days (N = 5). Let\u0027s say that if we calculate that the %K value is 0.38, it means that today\u0027s closing price was 38% relative to the 5-day trading session. The threshold lines that define the Stochastic OB/OS zone are at the 80 and 20 lines respectively. As for the readings of the Stochastic, it is said that the best buy signal will occur when the %D line is between the 10-15 range. And the best sell signal is formed while the %D line is between the 85-90 range. There are 7 popular methods for considering when to buy or sell: 1. Buy when the Oscillator drops below level 20 and resumes above it, and sells when it retraces above level 80 and reverses above level 80 in a downward direction. 2. Buy when %K cuts %D up and sell when %K cuts %D down. This case can also be separated into 2 sub-cases, %K cuts %D where %K (which is faster) crosses first. (So crossing the left side of the %D line is called Left Crossing) and if %K crosses %D, it\u0027s true, but %D (which is slower) crosses the head first (so %K cuts %D on the right side of the line). Line %D is called Right Crossing) in both cases reads same value But the latter is more certain than the former, since the %D is overturned first, indicating that it\u0027s a quick change of direction. Sweeter and more stable 3. A divergence can occur when %D is above the 80 line but cannot create a new higher Top while the price continues to follow the Uptrend. It happens while the %D line is below the 20 line and creates a new higher bottom. This is an early warning. Price may run in the direction So hurry up and look for an opportunity to sell (when there is a divergence at the top) or buy (when there is a divergence at the bottom) because soon there may be a reversal. This style is also known as set up. 4. A sharp drop in %K or %D (which George Lane called Hinge) shows that the market is weak. It\u0027s a signal to be careful that tomorrow\u0027s market may change direction. 5. A rapid (faster) and severe (2-12%) deflection of %K is a warning sign of The market is almost exhausted. The original direction of the price can stand well for no more than 2 days. 6. The %K value ranges from 0 to 100 when % reaches both extremes. It is often a signal to collect (%K=0) or drain (%K=100). The price must close at the highest or the lowest for at least 5 consecutive days (see the formula of %K to understand), and the number of days may need to be more if we use the slower Stochastic. 7. If %K crosses %D and tries to turn around to find %D again, but does not reach it. (or maybe just touching, but not breaking) %D This confirms a clear signal. That it had just intersected a while ago It\u0027s a sure sign. Stochastic Oscillator 02.png The example that will be presented above is the use of Stochastic to find the timing of entering and exiting with the SET index, which the arrowhead points down. Means buy signal or store more arrow header pointing up Means a sell signal or gradually making short-term profits (depending on the case). Beside the arrow there will be the word Buy or Sell, which will be seen that some When there is a moment to buy or sell more than 1 point, the question (that shouldn\u0027t be a question) is why there are many points. The answer is at The principle that will only be used to find a cutting rhythm (several items that have just been mentioned) because some people only see cutting up (but there is no confirmation from another stroke), then go ahead and be careful that you will find the stump. Because of the above this pointer quite fast moving Therefore, there may be a false signal, so some people use the line crossing rhythm. Gradually buy or sell stocks. It is similar to signaling in terms of moving averages.

kwIt9OgQ_mid.png Relative Momentum Index (RMI) One of the disadvantages of the RSI is that the RSI itself is not always evenly distributed between the overbought and oversold areas due to the effect of calculating the parameter and denominator in the formula, which can sometimes skew the distribution of the RSI toward the overbought or overbought areas. Too much oversold in either way, making the signal unsuitable for short-term use. Some people solve this problem by using a moving average as a supplement to send trading signals, some people use a trend line charting technique to supplement. To address this disadvantage, Roger Altman proposed an idea to improve the RSI with one more parameter: instead of measuring today\u0027s price change compared to yesterday\u0027s gain or loss, it measures the change in price. Today versus 3 days ago, which is a measure of y-day Momentum. Therefore, Altman calls this updated RSI the y Relative Momentum Index (RMI) indicator. rmi-1491674567cp48l.png We can also say that the RSI is a special case of the RMI, that is, the RSI is the RMI in case y=1. Since the RSI compares today\u0027s price with yesterday\u0027s price, the value of the RMI ranges between 0 to 100 and its interpretation or analysis is exactly the same as RSI, but has the advantage that If we choose a good y value for Momentum calculations, it will help the RMI to spread well overbought and oversold ranges and deliver a more accurate signal.

Momentum 02.png M=P-Pn Momentum and Rate of Change. It is an indicator that measures the current price change. With prices in the last N days. provided that P = current closing price Pn = Closing price of n days before And sometimes momentum may be measured by Rate of Change 02.png R = P/Pn which in the latter case We call it a measure of Rate of Change, which is another measure of change. Because in fact We can prove that R is equal to 1 + M/Pn, that is, if we subtract R by 1, we get the percentage change in price, while M is a measure of price change. In other words, R is a measure of percentage change. Conversion of price plus 1 itself (confused? ), so some traders subtract 1 from the formula to calculate Rate of Change to become R* = P/Pn - 1 as well. In this case, it will measure the Rate of Change around 0 instead of measuring around 1. Some traders sometimes multiply R by 100 to get the actual percentage. Instead of the decimal point But everything is the same. In practice, Rate of Change (R) and Momentum (M) have very similar properties. And the readings are the same, only Momentum is measured from the zero line, but the Rate of Change is measured from the 1 line (or 100 if we are with 100). Momentum lines built on small days Will be sensitive or susceptible to price changes. Than the line used longer time than which is smoother and less volatile If the price continues to move along the Uptrend and higher in the rate higher than the past, Momentum will continue to increase accordingly. But if the price increases at the same rate, the Momentum will move. In the side direction But if the price rises at a decreasing rate, momentum will weaken, so we can use momentum to “indicate price”. It is a measure of price acceleration and can guide prices. Momentum Reading • If the price is rising and Momentum crosses above the zero line and is moving up as well, it confirms Uptrend (use lines 1 or 100 instead in case of Rate of Change). • If the price is going down, Momentum is falling and crosses the zero line as well. Will confirm Downtrend. So a buy signal is generated when Momentum crosses the zero line and the price is in an uptrend. A sell signal is generated when Momentum crosses the zero line. And the price is in a Downtrend (likewise, use lines 1 or 100 instead of zero lines in case of Rate of Change) Momentum \u0026 Rate Of Change 02.png An example of using momentum as an analytical tool. Can be considered from the example above The upper frame is the momentum, the bottom frame is the movement of the stock price and the moving average. The buy signals points appears is the point where the momentum is greater than 100 and is higher than the previous day. At the same time, the stock price is above the moving average as well (which should be significant. Or a better filter just comparing today\u0027s price with the previous day\u0027s price). On the other hand, it is where the momentum is less than 100 and lower than the day before. At the same time, the stock price is below the moving average, but the additional observation is that The profit received in each period will be more or less different. Because during period 1, there is quite an uptrend, there are a lot of selling signals points, observed from the 25-day ema line that has a positive slope. During the 2nd period, the slope of the 25-day ema line is less, but it is still uptrend. As for the 3rd period, the 25-day ema line is almost zero or fiat, so the profit during this period may not be worth it if considering the fees as well.

Screenshot_19-3.jpg Later technical analysis is the introduction of techniques Statistics and Mathematics Let\u0027s apply more. These have become indicators of stock prices in many different forms, here we will talk about some of them. For those interested in Other indices besides those mentioned here can read more because most of them use similar concepts In using technical tools to analyze stocks The part that we often hear or use often is Oscillator, which measures this oscillation. There are many of them that we are familiar with, such as RSI and Stochastic, for example, which can be used as indicators of the market direction in the short to medium term as well. Especially during the time when the market moves without direction. Ways, also known as sideways, or fluctuations within a narrow band, because during these times, oscillators are able to stick to prices more closely than other instruments. Allowing traders to use it as a buying tool Short-term sale, fast-in, fast-out Even in market conditions that are not clearly uptrending or downtrending, and even when the market is trending, oscillators can help determine if the trend will continue to strengthen. Is about to weaken already as well. Introduction to Overbought, Oversold, Convergence, and Divergence Most indicators are derivatives. Derivatives, which are used to measure price changes. A simple metaphor is like if We compare the price to the speed of the car. Indicators are the same as the acceleration of the car if we press the accelerator (or deceleration if we press the brakes), which gives another perspective. If we accelerate the accelerator The higher the acceleration, the faster the car will go. In this case, we will see that acceleration and top speed go up simultaneously. Now, if we withdraw the accelerator We will find that the car is still moving forward by inertia, but the acceleration is zero. When we start to tap the brake lightly The car was still moving forward. But the braking force gradually pulls the car to slow down. In this case, the acceleration is negative. (Because we\u0027ve applied the brakes), but the car can still run a little further forward. Before coming to a complete stop. In this case, acceleration versus velocity will go in different directions Because the car can still run forward. But negative acceleration (Become a delay) already. Same stock price Sometimes we may see that the price is still up. But the truth is that the market lacks momentum. (Which is the acceleration) and this is what we call the market is overbought because you turn to ask other traders. Found that they were bought together And almost everyone, everyone has stocks in their hands. People who buy more have a few more. And those who still have it still keep it and don\u0027t rush to sell. But there are fewer people wanting to buy. On the other hand, during the market crash, everyone flocked to sell. (Afraid of losing each other) The price will fall very quickly because there is a strong selling force. But when sold to a certain point Sales force began to shrink. They\u0027re all sold here. (It\u0027s almost out of stock.) Even though the price is still going down, you\u0027ll notice that the selling pressure has shrunk a lot. This is called oversold. Indicators are also attempts to measure buying or selling pressure. Which determines the direction of the price again Therefore, during The market is accelerating, the indicators will move in the same direction as the price. (It\u0027s like we press the accelerator harder and the car runs faster), which is called Convergence, but when the market starts to run out of acceleration. (Like we withdrew the accelerator), although the price is still Running in the same direction, but some Indicators will start running in a different direction from the price. This is what we call Divergence as a warning signal that The market is starting to run out. Be careful. Because there is no other support to support the market, the direction may reverse (Reversal) soon. Some traders play very fast. Therefore, other technical principles have been applied to the Indicator because it gives quick and good signals, such as using Trend line charting techniques or finding the Moving Average of the Indicator as a trading signal. Which is not wrong. Give good signal But the best way is to gradually start buying or selling little by little. When there is a signal In addition to using other technical tools with the Indicator and gradually buying or selling until the real signal is found (the real thing is real, but it may be a little slow), but some traders are a little overrated, just the Indicator turning its head a bit. Buy and sell This is still a little too much. General Rules for Reading Indicators If the indicator climbs to the upper or lower band of the indicator, known as Overbought and Oversold, it shows that the stock is overbought. Overbought or oversold If the indicator and the price move in a divergent direction, this is usually an important warning that the price may A reversal will follow, an important signal will be generated when the oscillator is in the OB/OS zone. For some indicators, the indicator\u0027s crossing up or down through the zero line is a signal to buy or sell according to the trend.