Indicators & Oscillators
5 terms
Backtesting
Indicators & Oscillators
qualitative
Applying a set of trading rules to historical data to see how they would have performed.
Test: rules are fully specified in advance, applied without hindsight, and results are net of realistic transaction costs and slippage
Bearish Divergence
Indicators & Oscillators
qualitative
A condition in which price makes a higher high while an oscillator makes a lower high.
Test: current price high > previous price high, while current indicator high < previous indicator high
Bollinger Band Width
Indicators & Oscillators
%
The distance between the upper and lower Bollinger Bands, expressed relative to the middle band.
Band Width = (Upper Band - Lower Band) / Middle Band x 100
Bollinger Bands
Indicators & Oscillators
₹
A moving average with bands plotted a set number of standard deviations above and below it.
Middle Band = 20-period SMA; Upper Band = Middle + 2 x Standard Deviation; Lower Band = Middle - 2 x Standard Deviation
Bullish Divergence
Indicators & Oscillators
qualitative
A condition in which price makes a lower low while an oscillator makes a higher low.
Test: current price low < previous price low, while current indicator low > previous indicator low