Chapter 11 Momentum Oscillators and Moving Averages
Augmenting the value of price indicators, several additional sources for price prediction may be used by technicians. The last chapter introduced volume indicators; this chapter focuses on momentum oscillators and moving averages.
Movement in cannot be predicted. For others, the markets are considered to be efficient, meaning all known information is accounted for in the price immediately. Both of these theories contain flaws when applied in “real world” situations and to price behavior. Some specific events (earnings surprises, mergers and acquisitions, product announcements, for example) have a direct and immediate effect on price. These news items demonstrate that randomness is only one attribute ...
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