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Showing posts with the label Indicators

What is the Consumer Price Index (CPI)?

What is the Consumer Price Index(CPI)? The Consumer Price Index (CPI) is a measure of the change in prices paid by consumers for a basket of goods and services. It is one of the most widely followed economic indicators, and it is used by investors to gauge inflation and make investment decisions. How is the CPI calculated? The CPI is calculated by the Bureau of Labor Statistics (BLS). The BLS surveys households across the United States to collect data on the prices they pay for goods and services. This data is then used to create a "basket" of goods and services that represents the spending habits of the average American household. The BLS calculates the CPI by comparing the prices in the basket of goods and services in a given month to the prices in the same basket of goods and services in a base year. The base year is usually 2000. How does the CPI affect investing? The CPI is an important indicator of inflation. When the CPI rises, it means that the cost of living is incre...
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How to use Bollinger Bands

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Introduction to Bollinger Bands Bollinger Bands, developed by John Bollinger in the early 1980s, are a technical analysis tool that consists of a simple moving average (SMA) surrounded by two standard deviation channels. These bands dynamically adjust themselves according to market volatility. As volatility increases, the bands expand, and as it decreases, the bands contract. The Components of Bollinger Bands Simple Moving Average (SMA): The central component of Bollinger Bands is the SMA, typically calculated over a 20-day period. This moving average provides insights into the average price movement within a defined timeframe. Upper Bollinger Band: This band is constructed by adding two times the standard deviation of price to the SMA. It serves as a dynamic resistance level during price uptrends. Lower Bollinger Band: Similarly, the lower band is created by subtracting two times the standard deviation from the SMA. It acts as a dynamic support level during price downtrends. Calcul...
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What is a Heikin Ashi chart?

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 What is a Heikin Ashi chart? A Heikin Ashi chart is a type of candlestick chart that smooths the price action by averaging the open, close, high and low prices of a series of candles. This makes it easier to identify trends and reversals, and can help traders make more informed trading decisions. How does a Heikin Ashi chart work? The Heikin Ashi chart is calculated by averaging the open, close, high and low prices of the previous two candles. The first candle in a Heikin Ashi series is simply the open and close price of the first candle in the underlying series. The second candle is calculated by averaging the open and close prices of the first candle, as well as the high and low prices of the second candle. How to use a Heikin Ashi chart Heikin Ashi charts can be used to identify trends and reversals in the market. A bullish trend is indicated by a series of Heikin Ashi candles with rising closes. A bearish trend is indicated by a series of Heikin Ashi candles with falling close...
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