The AAII Sentiment Survey, conducted weekly by the American Association of Individual Investors (AAII), is a widely followed contrarian trading indicator in the stock market. It measures individual investor sentiment by tracking the percentage of respondents who are bullish, bearish, or neutral on stock prices over the next six months. Understanding market sentiment is crucial for traders, when...
“Your worst drawdown is always ahead of you…Will you survive trading the way you trade today?”Let’s be honest…Short trades feel like a pain.They’re harder to find.They often lose money.And they feel “wrong” because everyone tells you markets go up over time. So why do I still trade short?Diversification.When your long systems are bleeding, short systems can make money.And that saves your...
The True Strength Index (TSI) is a momentum oscillator trading indicator designed to identify overbought and oversold conditions in an asset, helping traders predict trend reversals. Developed by William Blau, the True Strength Index indicator uses a double smoothed technique to provide clearer trading signals than many other technical indicators. To make it more relatable, think of TSI as a...
Insider activity refers to buying and selling a company’s stock by individuals with privileged access to non-public information—typically executives, directors, or large shareholders, while not a trading indicator as such, insider activity can provide valuable information for our trading. Tracking insider transactions provides valuable insights into how those closest to the company view its...
Short update this week because I am travelling... I recently had a breakthrough—not in the markets, but in the garden. For a while now, I’ve been running an aquaponics setup at home. When it works, it’s brilliant: Fish produce waste, bacteria convert that waste into nutrients, and plants grow in grow beds filled with clay media while the water circulates through the system. In theory, it’s an...
The Price Volume Trend trading indicator (PVT) is a technical analysis tool that combines price movement and trading volume to assess market sentiment. It functions similarly to the On Balance Volume (OBV) indicator but differs in adding or subtracting only a portion of the daily volume, adjusted for price changes. This momentum indicator is primarily used to confirm trends and identify...
The Market Facilitation Index (MFI) trading indicator, developed by Bill Williams, captures the idea of how efficiently the market moves based on the index and volume relationship. Price movement tells us what is happening in trading, and trading volume hints at why, but when you put them together, you understand how serious market participants commit to their moves. The Market Facilitation...
I just wrapped up a 23-day push-up challenge with my daughter. The goal? 3,124 push-ups to raise awareness for mental health in Australia. At first glance, it felt overwhelming. Over 3,000 push-ups? That’s a mountain of pain and effort. But the app broke it down into daily bite-sized goals. 135 push-ups a day. A few here, a few there. Some friendly accountability. It became surprisingly…...
Most technical indicators and chart patterns focus on price or volume, but the Demand Index trading indicator does something different—it combines both to uncover what’s really driving market movement. Imagine you're at an auction. It’s not just the price, but how many people are bidding and how aggressive are they? That’s what the Demand Index tries to capture, it provides traders with a way to...
Floor trader pivots are one of the most widely used trading indicators for day trading. Developed by floor traders in the pits of the Chicago futures exchange, these pivot indicators help traders identify potential support and resistance levels, providing key turning points where price action is likely to shift. Think of these pivot points as the “checkpoints” of a race. Just like runners often...
The Short Interest Ratio (SIR), also known as the Days-to-Cover Ratio, is a crucial sentiment trading indicator for those looking to understand market sentiment. It measures the total short interest by dividing the number of shares sold short by the stock’s average daily trading volume. In simpler terms, it tells you how many days it would take for short sellers to buy back all their short...
Cycle Lines as a trading indicator are used to identify repeating time-based cyclical patterns in financial markets. These lines appear as vertical markers on a price chart, spaced at regular intervals, highlighting potential market trends and cyclical turning points. Traders use them to anticipate price movements based on past cycles, especially in assets with predictable price rhythms, such as...