How to Create a Function that Fetches Market Sentiment Data.
Market sentiment is an extremely important part of trading. It allows us to understand the positioning of the players who potentially could move the markets. Knowing that the majority of hedge funds are bullish on an asset gives us more confidence to invest in it. Similarly, knowing that almost all of the hedge funds are bullish on an asset could give us a signal that the market may be overly bullish and that it is wiser to wait before investing or even be brave enough to initiate a contrarian position in case the fundamentals start to justify it.
In this article, we will discuss the famous Commitment of Traders Report — COT and present a way to easily get the values using Python. Next we will see how to combine them with their respective assets or currency pairs. But first, we will introduce the concept of the Commitment of Traders Report before we move on to the more technical elements. …
An overwhelming number of traders use the famous Relative Strength Index to help with their decisions, and although it can only serve as a confirming indicator, it nevertheless, has its weight in many trading decisions or at the very least timing the decisions. The RSI has been created by J. Welles Wilder in 1978 as a momentum indicator with an optimal look-back period of 14 bars. It is bounded between 0 and 100 with 30 and 70 as the agreed-upon oversold and overbought zones respectively. The RSI can be used through 3 known techniques:
- Oversold and overbought zones as indicators of possible short-term corrections or reversals. …
Presenting and Coding the Hull Moving Average in Time Series Analysis.
The Hull Moving Average is a powerful trend-following overlay indicator that can be used to determine trends and capture them with less lag than the simple moving average. Its calculation is more complex but it is worth adding to the trading framework as it a confirmation factor. In this article, we will discuss the building blocks of the Hull Moving Average before coding and visualizing it.
If you are as fascinated as I am with moving averages, then feel free to check out the below article that proposes a type of moving averages relying on the Fibonaci Sequence.
The Concept of Moving Averages
Moving averages help us confirm and ride the trend. They are the most known technical indicator and this is because of their simplicity and their proven track record of adding value to the analyses. We can use them to find support and resistance levels, stops and targets, and to understand the underlying trend. This versatility makes them an indispensable tool in our trading arsenal. …
Presenting a New Oscillator Emerging from the Stochastic Oscillator.
The famous Stochastic Oscillator is one of the first technical indicators we are taught when we start trading and yet we can easily modify its formula so that it fits us more. It is a highly versatile tool that can be tailored to the trader’s needs. I am not saying it is a gold mine, but using it the right way in the right time definitely adds value. In this article, we will present the Stochastic Oscillator and then another variation based on this Indicator before back-testing them both and compare profitability.
If you are interested in contrarian indicators, feel free to have a look at the following article I have written on…
Presenting and Coding the Triangular Moving Average with its Strategies.
Moving averages are a great way to provide support and resistance levels among other uses. There are many types of moving averages and in this article, we will discuss the Triangular Moving Average and some strategies revolving around it.
For more on other types of moving averages, feel free to check the below article:
The Concept of Moving Averages
Moving averages help us confirm and ride the trend. They are the most known technical indicator, and this is because of their simplicity and their proven track record of adding value to the analyses. We can use them to find support and resistance levels, stops, and targets, and to understand the underlying trend. …
When Simplicity Performs Better Than Complexity. A Python Study.
Combinations of indicators is the first step towards a better trading system. The nonlinearity of the financial markets makes it unlikely that only one indicator can predict the markets most of the time. It is always fun and useful to know which combinations work and which do not. In this article, we will see a combination of two famous technical indicators an back-test their strategy.
If you want to see more combinations, feel free to read the below article as well:
The Stochastic Oscillator
The Stochastic Oscillator seeks to find oversold and overbought zones by incorporating the highs and lows in its calculation. …
Detecting Market Regime Changes in Python.
A huge chunk of the time spent trading is spent searching for the the answer to this famous question: “What will the market do next? Range? Trend?”. The answer to this question is a form of holy grail because if we know what will happen then we will be able to choose the right strategy.
Many good strategies fail at some point because the market regime has switched and is no longer representative. Imagine a hypothetical scenario where we know the market will continue to move sideways. …
Creating a Pattern Recognition Scanner in Python to Find Market Breakouts.
Pattern recognition is the search and identification of recurring patterns with approximately similar outcomes. This means that when we manage to find a pattern, we have an expected outcome that we want to see and act on through our trading. For example, a double top/bottom pattern is a classic technical pattern that signals an imminent trend reversal. The literature differs on the predictive ability of this famous configuration. In this article, we will discuss an objective pattern that can help find breakouts as opposed to reversals. …
Presenting the Lucas Series as a Complement to Trading.
The most famous sequence in Mathematics is without a doubt the Fibonacci sequence. It is used in Technical Analysis as a way to find support and resistance levels. It can have other uses as well such as pattern recognition and moving averages. In this article, we will discuss a similar sequence to Fibonacci and then use it in trading in order to find support and resistance levels.
If you are interested in knowing how to use the Fibonacci sequence in pattern recognition trading, feel free to have a look at this article:
The Lucas Series
Named after mathematician François Lucas, the sequence or series follows the same path as the Fibonacci sequence but their starting point is different. Let us quickly refresh our memories as to what Fibonacci numbers are and then discuss the Lucas numbers. …
What is the Oscillator of Moving Average? And How to Use it?
An Oscillator of Moving Average is an interesting transformation that can be used as confirmation in trading. It is very versatile and can be used with the majority of technical indicators. In this article, we will apply the Oscillator of Moving Average transformation on two known indicators and then see how it should be used properly.
If you are interested by contrarian strategies, be sure to check out the below article I have recently published:
The Relative Strength Index
The RSI is without a doubt the most famous momentum indicator out there, and this is to be expected as it has many strengths especially in ranging markets. It is also bounded between 0 and 100 which makes it easier to interpret. …
