What does macd difergence mean donchian channel indicator

Convergence is when the two averages move towards one another while divergence is when the averages move away from one. Donchian Channel and Volume Oscillator. The interpretation rules above look straightforward and mechanical. Since the MACD histogram is a derivative of price and is not price itself, this option trading strategies for earnings tradingview es is, in effect, the trading version of mixing apples and oranges. The name tells it. Price action is a great way to check objectively where you are standing. Zero crossovers provide evidence of a change in the direction of a trend but less confirmation of its momentum than a signal line crossover. Chart Reading. This occurs when there is no difference between the fast and slow Exponential Moving Averages of the price series. So, this may feel a little dramatic. Richard Donchian created Donchian Channels, which is a type of moving average indicator and a look-alike of other support and resistance trading indicators like Bollinger Bands. In the past few months, we have been on a journey to educate our members on technical analysis. One of the reasons traders often lose with this setup is that they enter a trade on a signal from the MACD indicator but exit it based on the move in price. Best Moving Average for Day Trading. Read more about discount brokerage account online 5g network best stocks Donchian Channels. To change or withdraw your consent, click the "EU Privacy" link at the bottom of every page or click. Technical Analysis of the Financial Markets. Zero crossovers provide confirmation of a change in the direction of a trend but less proof of its momentum than a signal line crossover. The MACD histogram is the main reason why so many traders rely on this indicator to measure momentum, because it responds to the speed of price movement.

Day Trade with Moving Average Convergence Divergence

The common definitions of particularly overloaded terms are:. But they are merely guidelines. Each one of the technical indicators is fundamentally lagging interpretation of market direction. Read more about the Donchian Channels. So, if you are in your 40s or 50s reading this article, you still have time to master trading. Day Trading Simulator. Should the 90 day high be breached, I expect the next major resistance would be around the 9 month high ETH 0. The 9-day, day and day EMA are usually the default in most platforms. Now, despite powerful charting platforms, it continues to attract traders with its sheer simplicity. If prices are rising, the histogram grows larger coinbase access token is invalid gemini bitcoin buy limits the speed of the price movement accelerates, and contracts as price movement decelerates. Own Mountain Trading Company.

There are the simple, exponential, weighted, and smoothed moving averages. Fraud Alert. All moving averages are exponential. After this consolidation period, the contract then broke out higher which was the start of a strong run-up. Top of Page. Like life, trading is rarely black and white. Leave a Reply Cancel reply Your email address will not be published. Subsequently, a PPO is preferred when: comparing oscillator values between different securities, especially those with substantially different prices; or comparing oscillator values for the same security at significantly different times, especially a security whose value has changed greatly. Namespaces Article Talk. By averaging up his or her short, the trader eventually earns a handsome profit, as we see the price making a sustained reversal after the final point of divergence. These instances would indicate possible trading signals. Price is ranging - indicated by the flat MA. As the working week used to be 6-days, the period settings of 12, 26, 9 represent 2 weeks, 1 month and one and a half week. He is J. As you can see, a sell signal is usually indicated when the two lines are moving downwards while a buy signal usually emerges when the two lines are moving upwards. As in the illustration on the left-hand side, you can try to imagine how the price is making a new high, while the MACD indicator is failing to make a new high. One of the reasons traders often lose with this setup is that they enter a trade on a signal from the MACD indicator but exit it based on the move in price. No trading indicator is perfect. Figure 4 illustrates this strategy in action:. Mostly, they find over-extended market movements that might be reversing.

10 Technical Trading Indicators You Must Know

The ten technical indicators we covered are derived from price. As the EMA is more responsive to recent market prices, it produces more signals from bullish to bearish and vice versa. Ultimately toward the end of his how to add trades to thinkorswim magic chart indicator amibroker, Richard began what does macd difergence mean donchian channel indicator actively trade the markets versus buying and holding positions. As such, it tends to be more accurate than the simple moving average. Visit TradingSim. Please enable Javascript to use our menu! Build your trading muscle with no added pressure of the market. Share 0. The charts coinbase download apk bitstamp litecoin like this on an intraday basis. June Price has broken clear of the trading range and the MA is rising - exit [X] when price closes below the MA. The MACD is only as useful as the context in which it is applied. The name tells it. Our Partners. Page Contents. Top of Page. Therefore when a low float stock picks up and goes on a run, the lower bounds not capture the price movements quickly enough, thus risking giving back more paper profits than necessary. The 9-day, day and day EMA are usually the default in most platforms. If the market is at the extreme high or low of the recent trading price range, there is clearly strong momentum in one direction.

When applied on a chart, the main line of the MACD oscillates above and below the centreline. If prices are rising, the histogram grows larger as the speed of the price movement accelerates, and contracts as price movement decelerates. Although the MACD is effective, it is not complete in itself. It is a journey that has seen us cover some of the most popular indicators like the Relative Strength Index and other unpopular indicators like the Donchian Channel. Prentice Hall Press. No more panic, no more doubts. I make this point to establish upfront before we go deeper, that Richard thought it was best to trade low volatility stocks. Day Trading Device. An analyst might apply the MACD to a weekly scale before looking at a daily scale, in order to avoid making short term trades against the direction of the intermediate trend. The contract also had multiple touches of the lower band. By doing this, the MACD forms a momentum oscillator from two trend indicators. It is also one of the easiest to calculate and use. But there is one key point I want to call out regarding how Richard perceived the trading world. That title is a bit telling. You can help by adding to it. Hikkake pattern Morning star Three black crows Three white soldiers. Beginners have to use MACD for identifying the short-term as well as intermediate trend, say of three to five weeks, only. As such, its goal is to find where the long-term and short-term moving averages converge and diverge.

Donchian Channels (DC)

This indicator got its name from Richard Donchiana pioneer of managed futures and the well-known Turtle trend-following method. The MACD is only as useful as the context in which it is applied. Alternatively navigate using sitemap. The MACD stands for moving average convergence and divergence. If the market is at the extreme high or low of the recent trading price range, there is clearly what does macd difergence mean donchian channel indicator momentum in one direction. In effect, this strategy requires the trader to average up as prices temporarily move against him or. Posted By: Steve Burns on: March 06, The Donchian Channel plots the highest high in the last N periods as its top channel line. Donchian channels are mainly used to identify the breakout of a stock or any traded entity enabling traders to take either long or short positions. The difference between the MACD series and its average is claimed to reveal subtle shifts in the strength and direction of a stock's trend. Taking profits close to the 9 month high resistance ETH 0. A false positive, for example, would be a new forex trading rules how do i report forex trading gains crossover followed by a sudden decline in a bitcoin margin trading australia poloniex buy sell fees. Your ability to open a DTTW trading office or join one of our trading offices is subject to the laws and regulations in force in your jurisdiction. The behaviour of each technical indicator varies with its look-back period. This difference causes the Keltner Channel to look smoother than the Bollinger Band. High values represent a trending market, and low values represent a dull one. By continuing to browse, you agree to our use of cookies. Only trade with Histogram signals when the market is trending. Donchian Channel and Stochastic and Moving Average. At the extreme left of the chart, on the lower side, we have identified a price breakout of purchased litecoin on coinbase but didnt show up ethereum trade value downward trend, signaling traders to open a short position or liquidate long positions.

Table of Contents Expand. Stop Looking for a Quick Fix. Price is ranging - indicated by the flat MA. See Indicator Panel for directions on how to set up an indicator. Go short [S] as the histogram turns down far from the zero line. Low float stocks are not bound by any indicator, especially Donchian channels. Day Trading Device. The challenge with the Donciahn channels is that it does not factor in the most recent market volatility. In this report, we have looked at who developed the indicator, how it is calculated, and how it is used in the financial market. Although there are many versions out there, there are only two common variants. Some rules that traders agree on blindly, such as never adding to a loser, can be successfully broken to achieve extraordinary profits. Use a trend indicator, such as a moving average , to exit from trends. A false positive, for example, would be a bullish crossover followed by a sudden decline in a stock. Develop Your Trading 6th Sense. In effect, the trader is trying to call the bluff between the seeming strength of immediate price action and the MACD readings that hint at weakness ahead. When we discover this correlation between Donchian Channel and MACD, we would be able to filter the false entry signals and attain a better success rate for our trade opportunities. Read more about the Donchian Channels.

3 Simple Donchian Channel Trading Strategies

Notice how the stock just continues to grind higher over a two-month period. A Donchian Channel divided in five zones, blue up trend zone, gray ranging zone, orange down trend zone. Because of this, the histogram signals trend changes well in advance of the normal MACD signal, but is less reliable and should be confirmed by other indicators. Develop Your Trading 6th Sense. The MACD is one of the most popular technical indicators in the financial market today. When we discover this correlation between Donchian Channel and MACD, we would be able how to identify a stock for day trading forex in marathahalli filter the false entry signals and attain a better success rate for our trade opportunities. There is absolutely no need to master them all. Since the MACD is based on moving averages, it is inherently a lagging indicator. Strong divergence is illustrated by the right circle at the bottom of the simulated futures trading contest binary options companies in uk by the vertical line, but traders who set their stops at swing highs would have been taken out of the trade before it turned in their direction. This estimate has the additional lag of the signal filter and an additional gain factor equal to the signal filter constant. Enter your email address and we'll send you a free PDF of this post. Figure 3: A typical divergence fakeout. To resolve the inconsistency between entry and exita trader can use the MACD histogram for both trade entry and trade exit signals. At this rate, the price momentum has great chances of pushing ETC past the 90 day high. Go short [S] as the histogram turns down far from the zero line. By doing this, the MACD forms a momentum oscillator from two trend indicators.

For their exact calculation, refer to ChartSchool. When Al is not working on Tradingsim, he can be found spending time with family and friends. Ranging Markets Signals are stronger if There is a bullish divergence on the Histogram; or The signal occurs far from the zero line. So, they started to tinker with it. Convergence is when the two averages move towards one another while divergence is when the averages move away from one another. Your Practice. Meanwhile, we have also identified the price breakout on the lower side of the channel, indicating the start of the new downtrend in the stock. It also can be seen to approximate the derivative as if it were calculated and then filtered by a single low pass exponential filter EMA with time constant equal to the sum of time constants of the two filters, multiplied by the same gain. See Indicator Panel for directions on how to set up an indicator. There are tonnes of trading indicators with creative traders churning out new variants every day. Author Details. Ultimately toward the end of his career, Richard began to actively trade the markets versus buying and holding positions. The contract also had multiple touches of the lower band. However, it is not a simple average. Therefore, the MACD is calculated using the following method.

A Complete Guide to the MACD Indicator

Leave a Reply Cancel reply Your email address will not be published. A "positive divergence" or "bullish divergence" occurs when the price makes a new low but the MACD does not confirm with a new low of hemp futures trading what are the two types of stocks. Gold is not an extremely volatile contract, so on first glance I fully expected the commodity to respect the channels. A "negative divergence" or "bearish divergence" occurs when the price makes a new high but the MACD does not confirm with a new high of its. The difference between the MACD series and the average series the divergence series represents a measure of the second derivative of price with respect to time "acceleration" in technical stock analysis. If the stock rises above the middle band of the Donchian channels, then you can open a long position. Deny cookies Go Back. MACD Histogram. Although there are many versions out there, there are only two common variants. As an example, consider the price range of the past two weeks. Moving average convergence divergence MACDinvented in by Gerald Appel, is one of the most popular technical indicators in trading. The trader provides the input N. As you can see, a credential qtrade securities vancouver best and cheapest stock trading signal is usually indicated when the two lines are moving how to get real time data thinkorswim reverse gravestone doji while a buy signal usually emerges when the two lines are moving upwards.

This is because the EMA is usually weighted more towards the last closing price. Go long [L] as the histogram turns up when well below zero. The clear transaction signals help reduce the subjectivity involved in trading, and the crosses over the signal line make it simple for traders to ensure that they are trading in the direction of momentum. Then, we apply a smoothing process similar to that of the EMA. The simple moving average was popular in the past as it was easy to calculate manually without the need for computers. Donchian Channels — Multiple Touches. We have selected these securities due to the recent oil price fluctuations in the market. Like life, trading is rarely black and white. Price has broken clear of the trading range and the MA is rising - exit [X] when price closes below the MA. No more panic, no more doubts. The EMA contains information from more than N bars ago. Develop Your Trading 6th Sense. The chink in this armor, is pretty straightforward Alone, it does not.

Trading the MACD divergence

In this caseglobe and mail best dividend stocks how to get rich by playing the stock market type of moving average that is used is the exponential average. Donchian Channels — Breakout Trades. It is a weighted average. Generally, investors use periods with the Donchian Channels as the default trading setting, but this value can be tweaked based on your trading style. Its name is telling. This is because the variation between the lines at the time of the cross is 0. Co-Founder Tradingsim. Compare Accounts. A few tweaks in its formula ensure that the Stochastic values always fluctuate between 0 and As with the Stochastic indicator, I want to specify that I am not covering the functionality of this indicator for you to immediately start using MACD. First I started looking at intraday charts for the gold contract. Breakout Dead cat bounce Dow theory Elliott wave principle Market trend. Significance is also attributed to disagreements between automate trade triggers dukascopy client sentiment MACD line or the difference line and the stock price specifically, higher highs or lower lows on the price series that are not matched in the indicator series. Chris capres advanced price action course forex cara trading binary random Started. Ignore the signal as it is too close to the zero line. I make this point to establish upfront before we go deeper, that Richard thought it was best to trade low volatility stocks. Financial Times Prentice Hall. For the below chart, we have identified buy and sell positions for Apple, based on the Donchian channels middle band.

Swing High Definition and Tactics Swing high is a technical analysis term that refers to price or indicator peak. This estimate has the additional lag of the signal filter and an additional gain factor equal to the signal filter constant. The short-term moving average accounts for most of MACD movement as it rapidly reacts to price changes. The MACD is appreciated by traders the world over for its simplicity and flexibility, as it can be used either as a trend or momentum indicator. Therefore when a low float stock picks up and goes on a run, the lower bounds not capture the price movements quickly enough, thus risking giving back more paper profits than necessary. Price action is a great way to check objectively where you are standing. This is because the variation between the lines at the time of the cross is 0. It is used to spot a change in the short-term trend of the market. The reason was the lack of the modern trading platforms which show the changing prices every moment. It swings up and down.

Indicators A ~ C

Technical analysis. As most of you already know- I am sticking mostly to price action for a reason! Significance is also attributed to disagreements between the MACD line or the difference line and the stock price specifically, higher highs or lower lows on the price series that are not matched in the indicator series. The interpretation rules above look straightforward and mechanical. The difference between the MACD and its Signal line is often plotted as a bar chart and called a "histogram". The histogram turns back towards the zero line when MACD and the signal line converge, well in advance of them actually crossing. Table of Contents. Not many indicators in technical analysis have confirmed to be more trustworthy than the MACD, and this relatively simple indicator can quickly be incorporated into any short-term trading strategy. However, the more signals a moving average provides, the less reliable each signal becomes. Was waiting for the uptrend to regain steam again. Go long [L] as the histogram turns up when well below zero. A chart that is consolidating or moving in a sideways direction is not recommended. This idea is as simple as it can be and is the very same definition of an Close the position when there is a signal to go short. For their exact calculation, refer to ChartSchool. Trendlines show divergences.

Accepted Payment Methods:. Deny cookies Go Back. This website or its third-party tools use cookies which are necessary to its functioning and required to improve your experience. Ignore the signal as it is too close to the zero line. But there is much more to learn before you can extract value from. Al Hill is one best option for online stock trading make money short term stock trading the co-founders of Tradingsim. Now, despite powerful charting platforms, it continues to attract traders with its sheer simplicity. Among all the secondary oscillators, the MACD is one of the finest and most trustworthy indicators to southern cross trading swing banknifty intraday chart a trend early and is also easy to read. The MACD stands for moving average convergence and divergence. Another thing. This is simply because when this happens, the short and long-term moving averages are usually the. Like life, trading is rarely black and white. If the market is at the extreme high or low of the recent trading price range, there is clearly strong momentum in one direction.

Indicators D ~ L

The charts looked like this on an intraday basis. The clear transaction signals help reduce the subjectivity involved in trading, and the crosses over the signal line make it simple for traders to ensure that they are trading in the direction of momentum. Download Now. Captions and trendlines: Do not use MACD if you want to draw trendlines or place captions on the histogram. Trading Strategies. The power in these low volatility stocks is how consistent the moves are in one direction once the train leaves the station. The RSI is one tool in his diverse and valuable toolbox. Now, in the below image you can see that we have highlighted major breakouts. Visit TradingSim. This is because the variation between the lines at the time of the cross is 0. Go long [L] - the histogram turns up and is reinforced by a bullish divergence. This is because the EMA is usually weighted more towards the last closing price. Author Details. It is a weighted average. Investopedia is part of the Dotdash publishing family. Also, note that you need to confirm the uptrend or downtrend, with two consecutive touchpoints of the Donchian channel before pulling the trigger on a trade.

Ignore the signal as it is too close to the zero line. Hikkake pattern Morning star Three black crows Three white soldiers. For example, the Bollinger Bandsan indicator we have covered before, has been developed thinkorswim paid indicators best free website for technical analysis moving averages and standard deviation. As the working week used to be 6-days, the period settings of 12, 26, 9 represent 2 weeks, 1 month and best forex trading technical analysis software price action trading vs indicators and a half week. Visit TradingSim. Its name is telling. So, what I noticed is that in order for things to become clearer, we just need to increase the time frame. Gold is not an extremely volatile contract, so on first glance I fully expected the commodity to respect the channels. Indeed, most traders use the MACD indicator more frequently to gauge the strength of the price move than to determine the direction of a trend. Taking profits close to the 9 month high resistance ETH 0. Since the MACD is based on moving cryptocurrency day trading courses where to buy and hold cryptocurrency, it is inherently a lagging indicator. The signals from the MACD indicator tend to lag price movements. A false negative would be a situation where there is bearish crossover, yet the stock accelerated suddenly upwards. Still, a well-prepared trader using the advantages of fixed costs in FX, by properly averaging up the trade, can withstand the temporary drawdowns until price turns in his or her favor. The offers that appear in this table are from partnerships from which Investopedia receives compensation. One popular short-term set-up, for example, is the 5,35,5. It is also one of the easiest to calculate and use. S6 tradingview 2 year treasury index thinkorswim we discover this correlation between Donchian Channel and MACD, we would be able to filter the false entry signals and learing how to pick penny stocks to invest in replay stock day trade practice a better success rate what does macd difergence mean donchian channel indicator our trade opportunities. Use a trend indicator, such as a moving averageto exit from trends. His methods were soundly based on finding the most conservative method for profiting from the futures markets and ultimately equities.

Make Money by Opening a Trading Office

Although originally meant for trading commodities, it is also used for other financial instruments. Donchian Channel and Stochastic and Moving Average. High values represent a trending market, and low values represent a dull one. A false negative would be a situation where there is bearish crossover, yet the stock accelerated suddenly upwards. June Welles Wilder again. The interpretation rules above look straightforward and mechanical. These parameters are usually measured in days. Zero crossovers provide evidence of a change in the direction of a trend but less confirmation of its momentum than a signal line crossover. The MACD indicator is designed as the difference between the fast moving averages and slow moving averages:. Exponential moving averages highlight recent changes in a stock's price. Trading Divergence.

The Donchian Channel is designed to follow a trend. Since the MACD histogram is a derivative of price and is not price itself, this approach is, in effect, the trading version how day trade cryptocurrency ignite stock on robinhood mixing apples and oranges. A prudent strategy may be to apply a filter to signal line crossovers to ensure what does macd difergence mean donchian channel indicator they have held up. Also, we recommend that you take your time to use the indicator in the demo account. Go short [S] as the histogram turns down far from the zero line. If the market is at the extreme high or low of the recent trading price range, there is clearly strong momentum in one direction. If the average gain outpaces the average loss consistently, the market might be poised to fall. Why geometry works with numbers Ignore the signal as it is too close to the zero line. Trading Strategies. After this consolidation period, the contract then broke out higher which was the start of a strong run-up. He is J. At the extreme left of the chart, on the lower side, we have identified a price breakout of a downward trend, signaling traders to open a short position or liquidate long positions. The ten technical indicators we covered are derived from price. Essentially, it calculates the difference between an instrument's day and day exponential moving averages EMA. However, the more signals a moving average provides, the less reliable each signal. If, on the other hand, the MACD histogram does not generate a new swing high, the trader then adds to his or her initial position, continually achieving a higher average price for the short. But you should know the ten technical indicators that follow. The behaviour of each technical indicator varies with its look-back period. Your Privacy Rights. Many trading books have derisively dubbed such a technique as " adding to your losers. Indeed, this trade was taken because there was a positive divergence between the price and the MACD indicator. In signal processing terms, the MACD series is a filtered measure of the derivative of the input price series with respect to time. Although originally meant for trading commodities, it is also used for other financial instruments. The lowest low in the last N periods is plotted as its bottom channel line.

Technical Indicators – Overview

Second, ensure that you check the inputs in the MACD. This is because the variation between the lines at the time of the cross is 0. Essentially, it calculates the difference between an instrument's day and day exponential moving averages EMA. Use a trend indicator, such as a moving average , to exit from trends. A "negative divergence" or "bearish divergence" occurs when the price makes a new high but the MACD does not confirm with a new high of its own. Captions and trendlines: Do not use MACD if you want to draw trendlines or place captions on the histogram. Appears to be that time of year - and a good sign for those who have been bag holding since FDA approval earlier this month. A chart that is consolidating or moving in a sideways direction is not recommended. Strong divergence is illustrated by the right circle at the bottom of the chart by the vertical line, but traders who set their stops at swing highs would have been taken out of the trade before it turned in their direction. We have highlighted the buying opportunity in violet for both indicators. Investopedia LLC. Such a divergence is a characteristic of an oversold market environment.

Page Contents. No more panic, no more doubts. Namespaces Article Talk. The Gimmee Bar is an example of using the Bollinger Band in a sideways market. Ultimately toward the end of his career, Richard began to actively trade the markets versus buying and holding positions. But it is, in fact, a straightforward and logical technical indicator. To alter the default settings - see Edit Indicator Settings. Indeed, most traders use the MACD indicator more frequently to gauge the strength of the price move than to determine the direction of a trend. No trading indicator is perfect. As you can see, a sell signal is usually indicated when the two lines are moving downwards while hilcorp energy penny stock loss to profit stocks buy signal usually emerges when the two lines are moving upwards. To resolve the inconsistency between entry and exita trader can use the MACD histogram for both trade entry and trade exit signals. The ADX is a trend strength indicator. Negative directional movement -DM is the difference between the low of a price bar and that of the bar before it. Predictions and analysis. Although the MACD is effective, who trades eurodollar futures risks of commodity trading is not complete in. Now every intraday chart of the gold contract does not look like. Go short [S] as the histogram turns down far from the zero line.

Price Moving Averages

Figure 2 illustrates a typical divergence trade:. EGLT , D. The divergence is a signal that the price is about to reverse at the new high and, as such, it is a signal for the trader to enter into a short position. As a future metric of price trends, the MACD is less useful for stocks that are not trending trading in a range or are trading with erratic price action. As the name suggests, the MACD is derived from moving averages. In obtaining the EMA value, we give a higher weight to the more recent values. This is because the variation between the lines at the time of the cross is 0. A small caveat here. The MACD and average series are customarily displayed as continuous lines in a plot whose horizontal axis is time, whereas the divergence is shown as a bar graph often called a histogram. From the chart on the right, you can see that the fast line crossed beneath the slow line and correctly called a new uptrend. If you want to use a more aggressive stop, you can place an order right at the middle line. In this article, we will look at another popular indicator known as the MACD and how to use it in trading. The MACD is appreciated by traders the world over for its simplicity and flexibility, as it can be used either as a trend or momentum indicator. Hence, there are overbought and oversold zones. Please enable Javascript to use our menu! Sticking to what already works should be the aim of the winning trader. First I started looking at intraday charts for the gold contract. NASX , D.

Such a divergence is a characteristic of an oversold market environment. Daily Price Charts. This difference causes the Keltner Channel to look smoother than the Bollinger Band. Appears to be that time of year - and a good sign for those who have been bag holding since FDA approval earlier this month. If you want to use a more aggressive stop, you can place an order right at the middle line. Therefore when a low float ishares canada index etf cheapest best stock trading account picks up and goes on a run, the lower bounds not capture the price movements quickly enough, thus risking giving back more paper profits than necessary. The interpretation rules above look straightforward and mechanical. Donchian channels again indicated a buyback position during the mid-week of May Please enable Javascript to use our menu! If the average gain outpaces the what does the i symbol on td indicator mean stock backtest decades data loss consistently, the market might be poised to fall. Chart Reading. The offers that appear in this table are from partnerships from which Investopedia receives compensation.

Stop Looking for a Quick Fix. Accordingly, the stock had a sharp correction after a few days. Figure 4: The chart indicates where price makes successive highs but the MACD histogram does not - foreshadowing the decline that eventually comes. Another thing. The Bollinger Band is now a standard overlay for many technical traders. Indeed, most traders use the MACD indicator more frequently to gauge the strength of the price move than to determine the direction of a trend. This occurs when there is no difference between the fast and slow Exponential Moving Averages of the price series. Donchian Channels. No confirmations yet, but might be somthin to keep an eye on. Your Practice. Hence, using too many indicators is blurring the vision of the trader. But it is, in fact, a straightforward and logical technical indicator. As an example, consider the price range of the past two weeks.