Thursday, November 27, 2008

New Indexes and New Indicators are coming soon.

Over the past month our developers were working on the new system of receiving data which would allow us to implement additional indexes as well as work on new technical indicators which we plan to implement within the next couple of weeks...

New Indexes.


At the current moment we working on adding following NASDAQ indexes to the list of indexes we track:
NASDAQ 100 Financial Index
NASDAQ Bank Index
NASDAQ Internet Index,
NASDAQ Computer Index,
NASDAQ Q-50 Index
NASDAQ Industrial Index,
NASDAQ Telecommunication Index,
NASDAQ Technology Index,
NASDAQ Capital Market Composite Index.

The new indexes would allow tracking other market sectors, apply volume and advance decline based technical indicators to them and could be used by traders who trade stocks from this market sectors.

New Indicators.


At the same time new system allows us to calculate advance decline ticks volume (ADT). Under advance tick index volume we assume summary volume of the positive ticks and the summary volume of the negative ticks of stocks from the index basket over the analyzed period. The same as Advance/Decline, the ADT reveals the traders sentiment and could be analyzed and used in the same way as other advance/decline based technical indicators. In opposite to the Advance/Decline indicators ADT is more sensitive on intraday reversals. The Advance/Decline data are calculated in relation to the previous day close. The ADT calculations are based on advanced and decline ticks of each stock and that explains better sensitivity of the ADT to the intraday trends.

To explain the nature of the ADT calculation we may compare it to the Advance/Decline and Advance Decline Momentum calculation:

Advanced Stock: A Stock is considered advanced if it traded above the previous day close. Even if the stock is moving during the trading session down, no matter how strong and how long this move down is, if this stock is still above previous day close it is still considered as advanced stock.

Advance Momentum Stock:
A Stock is considered advanced if it stock price moved up over a minute. No matter where the stock is in relation to the previous day close, if this stock moves up it is considered as advanced stock. As a result AD Momentum technical indicators are considered better for use on intraday charts while AD technical indicators could be used on higher time-frames.

Advance Ticks: A stock could be traded 100 times within a minute. Each trade is one tick and each trade could move price down and move price up. Even if the price of the stock moved up over a minute, this stock could have for instance 90 advanced ticks (90 trades with price up) and 10 declined ticks (10 trades when price was moving down) within this minute. In the next minute the same stock could still move up, yet have only 60 advanced and 40 declined ticks. As you may see advance/decline ticks are even more sensitive on smaller timeframes than AD momentum indicators. Since the number of ticks could vary from a minute to minute we calculate summary volume of the advance and decline ticks which provide better sentiment evaluation.

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