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Pipsology > Indicators > Flashcards

Indicators Flashcards

1
Q

How do Bollinger Bands work?

A

When the market is quiet, the bands contract and when the market is LOUD, the bands expand.

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2
Q

One thing you should know about Bollinger Bands is?

A

price tends to return to the middle of the bands. That is the whole idea behind the “Bollinger Bounce.”

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3
Q

Bollinger bands act like?

A

dynamic support and resistance levels.

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4
Q

With Bollinger bands the longer the time frame your are in?

A

the stronger these bands tend to be.

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5
Q

In a Bollinger Squeeze, when the bands squeeze together it usually means?

A

a breakout is getting ready to happen.

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6
Q

If the candles start to break out above the TOP band, then.

A

the move will usually continue to go UP.

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7
Q

If the candles start to break out below the BOTTOM band, then?

A

price will usually continue to go DOWN.

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8
Q

What is a keltner Channel?

A

a volatility indicator introduced by a grain trader named Chester Keltner in his 1960 book, How To Make Money in Commodities.

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9
Q

the middle line in a Keltner Channel is?

A

Exponential Moving Average (EMA)

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10
Q

The two outer lines in a Keltner are?

A

based on the Average True Range (ATR) rather than on standard deviations (SD).

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11
Q

Keltner Channel also?

A

contracts and expands with volatility but is not as volatile as the Bollinger Bands.

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12
Q

Keltner Channels serve as a guide for?

A

setting trade entries and exits.

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13
Q

The Keltner Channel help identify?

A

overbought and oversold levels relative to a moving average, especially when the trend is flat. It can also provide clues for new trends.

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14
Q

Think of the channel like an?

A

ascending or descending channel, except it automatically adjust to recent volatility and aren’t made up of straight lines.

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15
Q

The channel top typically holds as?

A

dynamic resistance while the channel bottom serves as a dynamic support.

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16
Q

The most commonly used settings in the Keltner Channel are?

A

2 x ATR (10) for the upper and lower lines and EMA (20), which is the middle line.

17
Q

MACD is an acronym for?

A

Moving Average Convergence Divergence.

18
Q

MACD is used to?

A

identify moving averages that are indicating a new trend, whether it’s bullish or bearish.

19
Q

What are the three MACD number settings>

A

The first is the number of periods that is used to calculate the faster-moving average. The second is the number of periods that is used in the slower moving average. And the third is the number of bars that is used to calculate the moving average of the difference between the faster and slower moving averages.

20
Q

In using MACD to trade Because there are two moving averages with different “speeds”, the faster one will?

A

obviously be quicker to react to price movement than the slower one.

21
Q

Parabolic SAR (Stop And Reversal) can?

A

help us determine where a trend might be ending is.

22
Q

The Stochastic oscillator is another technical indicator that helps traders?

A

determine where a trend might be ending.

23
Q

The Stochastic oscillator uses a scale to?

A

measure the degree of change between prices from one closing period to predict the continuation of the current direction trend.

24
Q

The Stochastic tells us when the market is?

A

overbought or oversold. The Stochastic is scaled from 0 to 100.

25
Q

Relative Strength Index, or RSI, is a popular indicator that?

A

help traders evaluate the strength of the current market.

26
Q

RSI is similar to Stochastic in that it identifies?

A

overbought and oversold conditions in the market.

27
Q

The Williams Percent Range, also called Williams %R, is a momentum indicator that shows you where?

A

the last closing price is relative to the highest and lowest prices of a given time period.

28
Q

As an oscillator, Williams %R tells you when a currency pair might be?

A

“overbought” or “oversold.”

29
Q

Williams %R’s sensitivity to volatile prices comes in handy when you want to know if?

A

prices are maintaining their bullish or bearish momentum.

30
Q

The Average Directional Index, or ADX for short, is another example of an.

A

oscillator.

31
Q

ADX is typically used to identify whether the market is?

A

ranging or starting a new trend.

32
Q

One way to trade using ADX is to?

A

wait for breakouts first before deciding to go long or short.

33
Q

ADX can be used as confirmation whether the pair could possibly

A

continue in its current trend or not.

34
Q

ADX can also be used to determine when?

A

one should close a trade early.

35
Q

Ichimoku Kinko Hyo (IKH) is an indicator that?

A

gauges future price momentum and determines future areas of support and resistance.

36
Q

Ichimoku Kinko Hyo is mainly used on?

A

JPY pairs.

Pipsology (12 decks)

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