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This is a Japanese trading model. There are 5 lines: - Tenkan, Kijun, Chiku, Kumo 1 and Kumo 2. Please see individual line names for explanations.
The list of Instruments covered in TraderMade Workstation is divided into different categories to aid ease of reference.
The term Intra-day is used to describe charts that are constructed of bars, candles etc that represent a time period of less than one day. These would include 1-minute, 5-minute, 60-minute, etc. Each Intra-day Bar displays the Open, High, Low, and Close that occurred during a specified time period.
There are various keys on the keyboard, which perform tasks. These keys are also known as "hot keys".
Kijun means ‘trend’ in Japanese. If the kijun line is going down, then sell. If the kijun line is going up, then buy.
The kumo lines create a ‘cloud’, which is an area of support or resistance. The market must break through the cloud to signal a buy or sell. They are used in a similar way to support and resistance levels.
This oscillator measures overbought/oversold situations. It is said to be an 'upside down' stochastic. This oscillator is based on the same concept of measuring the last close in relation to the price range over a certain period (below it is 10 days/hours).
%K = 100 x (H10-C) / (H10-L10)
Where C = Last close; and L10 = lowest low during the chosen period and H10 is the highest high during chosen period.
The %R line is - %R = 100 -%K.
The scale in Williams’s oscillator means that a reading above 20 corresponds to an overbought situation and a reading below 80 corresponds to an oversold situation.
Line Charts are created by connecting a specified price, either the high, low open or close, for each time interval displayed. Line charts usually plotted using the close.
Changes graph scale from arithmetic to a logarithmic scale.
The Low is the lowest price recorded during the selected time interval.
Back to top The MACD measures acceleration/deceleration, overbought/oversold situations, and gives trading signals. It can be used as a trading system or as an oscillator.
The MACD consists of: the Fast line which is the difference between two exponential moving averages in which the first one has a shorter time span than the second one; (Moving Average Oscillator) and the Signal line which is an exponential moving average of the fast line. For identification purposes the Fast line will be more erratic than the Signal line.
Gerard Appel, who originally developed this formula, suggests 12 and 26 days to calculate the fast line and a 9-day period to get the signal line.
T.E Aspray has tested different combinations of inputs for the three exponential moving average values and this optimisation has led him to the conclusion that a 10-20-9 days was the most profitable combination.
Market ProfileŠ Charts use alphabetical characters to plot the price activity that occurs during each time interval (default is 30 minutes).
The Market ProfileŠ assigns a successive letter to each 30-minute time interval. The assigned letter is plotted on the Market ProfileŠ chart at each price traded during the 30-minute period. The resulting price distribution, and distributions for other trading days, can be analysed to determine market strength and weakness. Market ProfileŠ is an additional application offered by TraderMade.
The momentum measures acceleration/deceleration and overbought/oversold situations. The momentum formula is M = P - Px where P = Latest price and Px = closing price "x" events ago. The crossing of the 'zero' line can be used for generating trading signals, but momentum signals have to be coordinated with the existing trend, for example the crossing of the "zero (1) line" should be taken as a sell signal only in a downtrend.
Normally the following codes are used to identify the individual futures contract months, cash, and spot contracts that are available on charting systems:
| F January |
N July |
CC Continuation |
| G February |
Q August |
AA Adjusted |
| H March |
U September |
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| J April |
V October |
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| K May |
X November |
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| M June |
Z December |
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Ex: USZ02 indicates -
US = U.S. Treasury Bond (Chicago Board of Trade), Z = December, and 02 = 2002
The Tradermade application does away with the need to remember these codes and displays a simple to use “Futures” menu, which lists the Exchanges in alphabetical order along with the contracts and the contract months available.
The term monthly is used to describe charts that are constructed from monthly intervals.
Moving averages are trend following techniques. When using a single moving average the signal is taken from the crossing of the Moving average with the price action. When the moving average crosses below the price action a buy signal is generated and when it moves above a sell signal is generated. When using two moving averages the signal is taken from the crossing of the two moving averages. When the shorter moving average (the one calculated from the lowest number of intervals) moves above the longer moving average a buy signal is generated and when the short moving average moves below the longer moving average a sell signal is generated.
There are 4 types of moving average in the Tradermade application. They are Standard, Weighted, Exponential and Standard Working Days. Please see individual entries for calculations.
The oscillator is a measure of the trend acceleration or deceleration. As the speed of the price move increases the moving average line, though lagging behind, will also accelerate/decelerate.
The calculation for this oscillator is to plot the difference between 2 moving averages.
Presenting the data in this form has the advantage of highlighting the classic trading signals of a 2 moving average system (crossing of the "zero line").
Overbought/oversold situations are spotted when the short-term moving average moves too far above/below the long term moving average (=zero line). This short-term variation from the long-term trend usually announces a pause in the market until the short term moving average moves back to the long term moving average.
If the short-term moving average bounces off the long term one, this usually represents a good buy/sell area in an uptrend/downtrend.
If the short term moving average crosses the long term one, this usually warns of a trend reversal.
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