indicator of overbought oversold

indicator of overbought oversold

The many indicators Advance Decline base are characterized by the fact that the rise in the center of attention and share prices have fallen or general are available in a given market. In this context, rising, falling and prices remain unchanged, both the number and volume due to them are recorded.

Sometimes a little difficult to acquire the necessary data, such as German suppliers can not provide the necessary variables in most cases. Moreover, in principle, be advised to refrain from the inclusion of values for the index unchanged with some members, such as the DAX.

If we impose the underlying indicators Advance Decline difference between the higher values of a business unit and fell with a moving average to come to Haurlan index as an indicator of overbought or oversold. The difference between the two is simply to set the calculation period.


The index is Haurlan because in three different versions, short (smooth 3 days), intermediate (smoothing 20 days) and long-term (200 days smoothing). To limit the indicator values of the index is always a gift of bandwidth, whose actual values are a matter of taste, and in particular depend on the database. The short version is suitable for a good time to enter the market to support or out, it can be detected over-or under-selling the market situation. To see a similar version is through the medium can also be identified potential trend changes. The long-term Haurlan can index with smoothing over 200 days will be used as a filter pattern in certain circumstances.

A different name, but not the others being supported by the indicator of overbought oversold. It is different here is the period for calculating the exponential moving average, it will be ten days. Also requires a bandwidth of overbought oversold, to determine their correct size, the trader must own. The interpretation of the indicator is clear, as the name suggests can actually overbought and oversold market phases are identified. In an oversold market situation there are often appropriate corrections while oversold index moves in a generally upward trend thereafter.


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