Try This Very Powerful Market Reversal Indicator
Using K’s Reversal Indicator I to Detect Powerful Reversals
This article discusses a promising indicator based on two famous classic indicators.
Components of the Indicator
K’s Reversal Indicator I is composed of two famous technical indicators, Bollinger bands and the MACD. Let’s refresh our knowledge of both.
Bollinger bands are a technical analysis tool developed by John Bollinger in the 1980s. They are used to analyze the volatility and potential price reversals in financial markets, most commonly in stocks, but they can be applied to other assets as well. Bollinger Bands consist of three lines plotted on a price chart. The middle band is a simple moving average (SMA) of the asset’s price over a specified period, typically 20 days. The upper and lower bands are calculated by adding and subtracting a multiple of the standard deviation of the price from the middle band.
The standard settings for Bollinger Bands use a multiplier of 2, meaning the upper and lower bands are positioned two standard deviations away from the moving average. However, traders can adjust the settings based on their preferences and the characteristics of the asset they are analyzing.
