Stocks & Commodities V. 23:2 (44-51): Directional Breakout Indicator by Barbara Star, PhD

Stocks & Commodities V. 23:2 (44-51): Directional Breakout Indicator by Barbara Star, PhD
Item# \V23\C02\033STAR.pdf
$3.95
Availability: In Stock

Product Description

Stocks & Commodities V. 23:2 (44-51): Directional Breakout Indicator by Barbara Star, PhD

Price breakouts of moving averages present many profitable trading opportunities. Heres an indicator you can use to detect breakouts and identify price direction.

Despite the availability of more complex tools, moving averages remain one of the most popular methods that traders use to help identify price direction. Because they smooth data and reduce day-to-day price fluctuations, moving averages offer a rapid way to recognize bullish or bearish trends. Moving averages may also serve as points of support or resistance. As a result, price breakouts of a moving average alert traders to potential shifts in trend. The most familiar breakout occurs when the closing stock price crosses its moving average either to the upside or the downside, warning that a trend may be changing. That type of breakout often is accomplished with a single price bar.

Sometimes, however, a tug-of-war between bulls and bears causes the moving average to cut through two or more consecutive price bars. This results in brief sideways price action, a neutral zone, which sets up another type of breakout as price eventually emerges from the neutral zone either to the upside or downside. Regardless of the type, price breakouts of moving averages present many profitable trading opportunities. Here is an indicator that detects both types of potential breakouts and identifies the direction that price might take following the breakout.

THE DIRECTIONAL BREAKOUT INDICATOR

According to conventional wisdom, the direction of the closing price in relation to its moving average at the time of the breakout forecasts subsequent price direction. When the closing price rises above the moving average, it portends a move to the upside. When the closing price falls from above to below the moving average, it warns that the price may continue to move to the downside. Even though reality often runs counter to conventional wisdom, there does seem to be enough truth in the predictive value of moving average breakouts to merit marking their occurrence.




FOR THOSE ORDERING ARTICLES SEPARATELY:
*Note: $2.95-$5.95 Articles are in PDF format only. No hard copy of the article(s) will be delivered. During checkout, click the "Download Now" button to immediately receive your article(s) purchase. STOCKS & COMMODITIES magazine is delivered via mail. After paying for your subscription at store.traders.com users can view the S&C Digital Edition in the subscriber's section on Traders.com.




Take Control of Your Trading.
Professional Traders' Starter Kit
All these items shown below only $299.99!
  • 5-year subscription to Technical Analysis of STOCKS & COMMODITIES, The Traders' magazine. (Shipping outside the US is extra. Washington state addresses require sales tax based on your locale.)
  • 5 year access to S&C Archive
  • 5 year access to S&C Digital Edition
  • 5-year subscription to Traders.com Advantage.
  • 5-year subscription to Working Money.
  • Free book selection.
  • Click Here to Order