Stochastic Momentum Index



Stochastic Momentum Index Interpretation:

The Stochastic Momentum Oscillator represents the position of the close relative to the median point whereas the traditional stochastic represents the postilion of the close relative to the highest and the lowest points. We use a double smoothing with an exponential moving average so that the signals are more consistent.

The SMI gives good divergence signals. A sell signal is given when a bearish divergence appears. A bearish divergence occurs when the stock price makes new highs while the SMI fails to make new highs.

A buy signal is given when a bullish divergence appears. A bullish divergence occurs when the stock price makes new lows while the SMI fails to make new lows.


Return from Stochastic Momentum Index to Using Indicators

New! Comments

Have your say about what you just read! Leave me a comment in the box below.







From the writers...

"It is far better to show you how to trade on your own, than it is for you to depend on us to tell you what to trade and when"


Your E-mail Address
Your First Name
Then

Don't worry — your e-mail address is totally secure.
I promise to use it only to send you Successful Forex Traders.


Get Chitika | Premium


The top five Trading Indicators as voted by you guys

Bollinger Bands
Stochastics
MACD
Moving Average
Parabolic SAR

To vote for what you find to be the most useful or for a full list of indicators please click here



If you have found this website helpful, please donate to show your support. The average donation is £7