Saturday, December 14, 2013

Combining Two Powerful Technical Tools

There are a wide range of technical indicators that traders and investors can use to determine the market’s trend and to pick stocks. I have found that the most effective combination of indicators use either different data or non-correlated data.

For example, if you were to use the MACD-His, RSI, and stochastics you are likely to get similar results from all three as all are based solely on price. In many of my columns I generally feature two key technical tools even though I do use others.

The first is the on-balance volume (which I discovered from Joe Granville’s book before I even had my first computer), which is my favorite volume tool and one that I have used confidently since the 1980’s. Looking at the monthly, weekly, and daily OBV analysis can give you a good idea whether a market is being accumulated or distributed.  (more)

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