Technical indicators are a mathematical examination of price and volume information over a given period. The indicators are used to predict where and in which direction the price may move in near future. The indicators attempt to establish a mathematical relationship of current price with past prices.
Moving average refers to average level of closing prices calculated on regular basis. A sequence of averages is calculated by taking into account the averages on daily basis.
RSI is Relative Strength Index. This is a momentum oscillator that measures the speed and change of price movements.
RSI = 100-100/(1+RS)
RS = Average of x days’ up closes / Average of x days’ down closes.
When used in Technical Analysis, the golden ratio is translated into three percentages: 38.2%, 50% and 61.8%. However, more multiples can be used when needed such as 23.6%, 161.8%, 423% and so on. The Fibonacci number series is as follows: 0,1,1,2,3,8,13,21,34,55, etc. Each number is the sum of the two previous numbers and the sequence continues infinitely. The key fibonacci ratio 61.8% is referred as golden mean.
Fibonacci retracements are considered to be hidden levels of support and resistance in the market. They are derived from the Fibonacci sequence of numbers.
Fibonacci retracement uses horizontal lines to indicate support and resistance. These are derived by drawing the trend line and dividing them by Fibonacci series.